Big Boost for household savings as Govt flags off solar scheme

Srinagar, Mar 1: The Pradhan Mantri Surya Ghar Muft Bijlee Yojana, approved by the Modi government on February 29, is being hailed as a potential game-changer in India's clean energy transition and cost-saving drive. The ambitious scheme promises free electricity to one crore households by promoting solar rooftop panel adoption across the country.

Under this first-of-its-kind initiative, the government aims to encourage residential consumers to switch to renewable solar energy for their everyday power needs. This would be enabled by offering substantial subsidies of 40-60% on installation costs of rooftop solar units up to 3kW capacity.

Besides ease of access to finance through collateral-free loans at 7% interest, the math in favour of solar power is simple - households can save around Rs. 15,000 yearly on their electricity expenses by switching to solar units of 3kW, as per official data. For a country like India, these individual savings could cumulatively result in massive gains.

What is PM Surya Ghar Muft Bijlee Yojana about?

PM Surya Ghar Muft Bijlee Yojana is a Central Scheme that aims to provide free electricity to one crore households in India, who opt to install roof top solar electricity unit.  The households will be able to get 300 units of electricity free every month.  It is an ambitious scheme approved by the Union Cabinet on February 29th, with an outlay of Rs.75,021 crore.

How does PM Surya Ghar Muft Bijlee Yojana work?

The scheme provides for a subsidy of 60% of the solar unit cost for systems up to 2 kW capacity and 40 percent of additional system cost for systems between 2 to 3 kW capacity.  The subsidy has been capped at 3 kW capacity.

At current benchmark prices, this will mean Rs 30,000 subsidy for 1 kW system, Rs 60,000 for 2 kW systems and Rs 78,000 for 3 kW systems or higher.

Who are eligible to apply for the Scheme?

The applicant must be an Indian citizen.

Must own a house with a roof that is suitable for installing solar panels.

The household must have a valid electricity connection.

The household must not have availed of any other subsidy for solar panels

How to apply for PM Surya Ghar Muft Bijli Yojana?

First, the interested consumer has to register on the national portal www.pmsuryaghar.gov.in. This has to be done by selecting the state and the electricity distribution company.  The National Portal will assist the households by providing relevant information such as appropriate system sizes, benefits calculator, vendor rating etc. The consumers can choose the vendor and the make of the Roof Top Solar unit they wish to get installed.

Can a consumer avail of loan facility to finance the solar unit?

Yes. Households will be able to access collateral-free low-interest loan products of around 7% at present for installation of residential RTS systems up to 3 kW. The interest rate has been pegged at 0.5% above the prevailing Repo Rate decided by the Reserve Bank of India from time to time.  In the event of Repo Rate, which is 6.5% at present, getting reduced to say 5.5%, the effective interest rate for consumer will become 6% instead of the current 7%.

Why should a household opt for the Roof Top Solar Scheme?

Simple economics.  The households will be able to save electricity bills as well as earn additional income through sale of surplus power to DISCOMs.

PM Surya Ghar Muft Bijlee Yojana promises an assured saving of approximately Rs 15,000 in a year for a household consuming up to 300 units a month, by installing Roof Top Solar unit of 3 kW capacity.  Such a household, by generating its own electricity will save on electricity bill approximately Rs 1,800 – Rs 1875.

Even after deducting the EMI of Rs 610 on the loan availed for financing the solar unit, the savings would be around Rs 1,265 per month or approximately Rs 15,000 in a year.  The savings for the households not availing of loan will be even higher.  Furthermore, by opting for renewable energy, it is an opportunity to contribute towards a greener planet.

What is the step by step procedure for availing of subsidy?

Step 1

Register on the portal with the following

Select your State & Electricity Distribution Company

Enter your Electricity Consumer Number, Mobile Number & Email.

Step 2

Login with Consumer Number & Mobile Number

Apply for the Rooftop Solar as per the form

Step 3

Once you get the feasibility approval, get the plant installed by any of the registered vendors

Step 4

Once installation is completed, submit the plant details and apply for net meter.

Step 5

Commissioning certificate will be generated from the portal, after the installation of the net meter and inspection by DISCOM.

Step 6

Once you get the commissioning report. Submit the bank account details and a cancelled cheque through the portal. You will receive your subsidy in your bank account within 30 days.