PM Surya Ghar—Muft Bijli Yojana

For Prelims: PM Surya Ghar—Muft Bijli Yojana, Renewable Energy Services Company (RESCO) Model,
Utility Led Asset (ULA) Model, Net Metering, Solar Rooftop System, Model Solar Village, Urban
Local Bodies, Panchayati Raj Institutions, Duck Curve.

For Mains: Significance of solar power for energy security, Challenges associated with solar power

Source: LM

Why in News?

Recently, the Ministry of New and Renewable Energy has come up with draft guidelines for
the central financial assistance and payment security mechanism for the PM Surya Ghar—Muft
Bijli Yojana.

The union cabinet approved the Rs 75,000 crore PM Surya Ghar—Muft Bijli Yojana to
benefit 1 crore families in February 2024.

What are the Key Highlights of the Draft Guidelines?

Models: The draft guidelines have been issued under the renewable energy services company
(RESCO) model and utility led asset (ULA) model of the rooftop solar scheme—‘PM Surya
Ghar—Muft Bijli Yojana’.
Renewable Energy Services Company (RESCO) Model: RESCO develops and
owns the rooftop solar system installed on the consumer’s rooftop for at least five
years.
The RESCO also makes all the operational expenditures required for the
maintenance of the plant, as needed.
Customers pay the RESCO for the electricity generated and receive net
metering benefits on their electricity bill.
The RESCO may enter into an arrangement with a distribution company
(discom) for the sale of generated power to the grid under a power purchase
agreement.
Utility led Asset (ULA) Model: Under it, a state discom owns the rooftop solar systems
for the project period of at least of five years, after which the ownership is transferred to
the household.
Eligibility for Central Financial Assistance (CFA):
Grid-connected rooftop solar systems on residential properties, including roofs,
terraces, balconies, and elevated structures.
Installations under metering mechanisms such as group net metering and virtual net
metering.
Exclusions: Households with pre-existing rooftop solar systems are not eligible under
the RESCO and ULA models for the PM Surya Ghar scheme.
Payment Security Mechanism: A Rs 100 crore corpus will be established to ensure payment
 security, managed by a national program implementation agency.
The creation of a payment security corpus ensures financial stability and security for
the solar projects.

What is PM Surya Ghar-Muft Bijli Yojana?

About: It is a central scheme to promote the adoption of solar rooftop systems by providing
substantial financial subsidies and ensuring ease of installation.
Objective: It aims to provide free electricity to one crore households in India, who opt to
install roof top solar electricity units.
The households will be able to get 300 units of electricity free every month.
Implementation Agencies: The scheme will be executed at two levels.
National Level: Managed by the National Programme Implementation Agency
(NPIA).
State Level: Managed by State Implementation Agencies (SIAs), which are the
Distribution Utilities (DISCOMs) or Power/Energy Departments of the respective states or
UTs.
Role of DISCOMs: As SIAs, DISCOMs are responsible for facilitating various measures to
promote rooftop solar adoption, including ensuring the availability of net metres, and conducting
timely inspections and commissioning of installations.
Subsidy Structure: The scheme provides subsidies to reduce the cost of installing solar rooftop
systems. The subsidy is capped at a maximum of 3kW capacity.
60% subsidy for solar systems up to 2kW capacity.
40% subsidy for systems between 2kW to 3kW capacity.
Additional Features of the Scheme:
Model Solar Villages: A "Model Solar Village" will be developed in each district to
serve as a demonstration project and promote rooftop solar adoption in rural areas.
Incentives for Local Bodies: Urban Local Bodies and Panchayati Raj Institutions
will receive incentives to promote rooftop solar installations in their respective areas.

What are Expected Benefits of PM Surya Ghar-Muft Bijli Yojana?

Economic Benefits: Households will benefit from reduced electricity bills and can earn
additional income by selling surplus power to Distribution Companies (DISCOMs).
A 3 kW system can generate over 300 units of electricity per month, providing free
electricity as per the scheme's objectives.
Solar Power Generation: The scheme is expected to add 30 GW of solar capacity through
residential rooftop installations, generating 1000 billion units (BUs) of electricity over the
system's 25-year lifetime.
Low Carbon Emission: It will reduce CO2 equivalent emissions by 720 million
tonnes, contributing significantly to environmental sustainability.
Job Creation: The scheme is anticipated to create around 17 lakh direct jobs across various
sectors such as manufacturing, logistics, supply chain management, sales, installation, operations,
and maintenance (O&M).

What are the Challenges in Implementation of the Scheme?

Household Reluctance: A significant challenge is the reluctance of households to adopt rooftop

solar systems due to the availability of free electricity provided by several states and union
territories.
Restricted Space Use: Serving the 1-2 kW segment is complicated due to limited terrace
space, uneven terrain, shading, low property ownership, and risks like vandalism or theft of solar
panels.
Operational Strain on DISCOMs: The current net metering system is financially burdensome
for DISCOMs, which already face substantial losses.
DISCOMs become unpaid storage facilities for homeowners who generate energy during
the day but draw from the grid at other times especially night.
Storage Integration: The lack of a mandate for storage systems with rooftop solar
 installations could lead to grid management issues similar to the “duck curve”.
The Duck Curve refers to a graphical representation of electricity demand from the grid
on days when solar energy production is high and demand in the grid is low.
Quality Assurance Challenges: Customers often find it difficult to assess the quality of the
installed systems, making them vulnerable to substandard service and performance.

What are the Other Government Initiatives to Harness Solar Energy?

One Sun, One World, One Grid

Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA)
National Smart Grid Mission (NSGM) and Smart Meter National Programme
International Solar Alliance (ISA)
National Solar Mission
Solar Park Scheme
Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)

Way Forward

Ensure Targeted Beneficiary Outreach: Partner with local bodies to develop strategies to
reach the economically disadvantaged households that consume less than 200-300 units
monthly.
Community Solar Projects: Encourage the development of Community Solar Projects that
allows shared solar generation from a central plant, benefiting low-income and rural households
who cannot install rooftop solar systems.
Revise Net Metering: Explore options like Time-of-Use (TOU) pricing, where consumers
are charged based on the time they consume energy, to reduce the grid strain from surplus
daytime solar generation.
Mandate Storage Integration: Make storage integration mandatory for all rooftop solar
installations to enhance grid stability and optimise the use of surplus solar energy.

Drishti Mains Question:

Q. Critically examine the challenges and opportunities associated with adopting solar energy production
among small households in India.

UPSC Civil Services Examination, Previous Year Question (PYQ)

Prelims

Q. With reference to the Indian Renewable Energy Development Agency Limited (IREDA),
which of the following statements is/are correct? (2015)

1. It is a Public Limited Government Company.

2. It is a Non-Banking Financial Company.

Select the correct answer using the code given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

 Ans: (c)

Mains

Q. “Access to affordable, reliable, sustainable and modern energy is the sine qua non to achieve
Sustainable Development Goals (SDGs)”.Comment on the progress made in India in this regard. (2018)

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