Pradhanmantri Suryodaya Yojana: Govt to provide 60% subsidy for rooftop solar

The govt will provide subsidy of 60 percent for the installation of rooftop solar to consumers under the Pradhanmantri Suryodaya Yojana (PSY), said RK Singh
Pradhanmantri Suryodaya Yojana: Govt to provide 60% subsidy for rooftop solar
Pradhanmantri Suryodaya Yojana: Govt to provide 60% subsidy for rooftop solarX

New Delhi: The government will provide subsidy of 60 percent for the installation of rooftop solar power systems to consumers whose electricity consumption is within 300 units under the Pradhanmantri Suryodaya Yojana (PSY), said RK Singh, Minister for Power and Renewable Energy on Friday. On being asked if any part of the cost of these rooftop solar installations will be paid by beneficiaries, the minister said that it will be free. “For people who consume under 300 units of electricity, going and taking a loan is a problem. Which is why the loan will be taken by our PSUs, the installation and the maintenance will also be done by our PSUs, while consumers will get 300 units of free electricity,” said Singh.

A day ago, in her Budget 2024 speech, Finance Minister Nirmala Sitharaman announced 300 units of free electricity to 1 crore households under Pradhanmantri Suryodaya Yojana.

How will Pradhanmantri Suryodaya Yojana work?

The government has allotted various states to a total of eight PSUs — NTPC, NHPC, Power Grid, SECI, SJVN, THDC, NEEPCO and EESL. These PSUs will form Special Purpose Vehicles (SPVs) for implementing the scheme in each state allotted to them.

State-run REC Limited has been appointed as the nodal agency for the implementation of the Pradhanmantri Suryodaya Yojana. While 60 percent of the capital cost of installation will come from the Centre in the form of subsidy, the remaining 40 percent will be loan. REC’s role in the scheme will be that of a facilitator who will make funds available to these eight PSUs and lending institutions extending funds for the implementation of this scheme.

Singh said that the rooftop solar systems installed by these PSUs will have the capacity to generate more than 300 units of electricity. “So, as soon as the power system is installed, the consumer will get 300 units of free electricity, while the surplus will be sold by the PSUs to settle the loan component of the cost. It has been estimated that it will take PSUs 10 years to settle their loans. During this period, they will also be responsible for maintaining these systems. After 10 years, PSUs will hand over the rooftop solar system to the consumers who can then sell the surplus electricity generated from these systems to discoms,” said Singh.

In her interim Budget speech, the Finance Minister said that the rooftop solar installations will allow consumers to reap annual savings of Rs 15,000-18,000 per year.

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How is this scheme different from National Rooftop Solar Scheme?

The Pradhanmantri Suryodaya Yojana is primarily meant for consumers whose electricity consumption is within 300 units, while the National Rooftop Solar Scheme is meant for all kinds of residential consumers. There’s a difference in the subsidy component of the two schemes — while under PSY, the Centre is providing a subsidy to cover 60 percent of the capital cost, under the National Rooftop Solar Scheme, the Centre provides subsidy for 40 percent of the cost. In the case of PSY, the balance capital cost will be borne by PSUs. In the National Rooftop Solar Scheme, the balance cost is borne by consumers.

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