Cabinet approves Rs 75,000 crore Rooftop Solar installation scheme for 1 crore households

New Delhi: The government on Thursday approved the scheme for installing solar panels on rooftop and providing free electricity up to 300 units every month for one crore households, with a total outlay of Rs 75,021 crore.

The scheme will allow households to save the electricity bills and also earn income by selling surplus power to the Distribution companies, the Government said.

The Union Cabinet, Chaired by the Prime Minister Narendra Modi, approved “PM-Surya Ghar: Muft Bijli Yojna, scheme which was launched on 13th February this year.

The scheme provides a Central Financial Assistance (CFA) for Residential Rooftop Solar of 60 per cent of the system cost for 2 kW systems and 40 per cent of additional system cost for systems between 2 to 3 kW capacity, an official statement said.

The scheme is estimated to create around 17 lakh direct jobs in manufacturing, logistics, supply chain, sales, installation, O&M and other services.

The CFA, however, will be capped at 3 kW. At current benchmark prices, this will mean Rs 30,000 crore subsidy for 1 kW systems and Rs 60,000 crore for 2 kW systems and Rs 78,000 crore 3 kW systems or higher.

According to the scheme, the households will apply for subsidy through the National Portal and will able to select a suitable vendor for installation of the panels. The National Portal will assist the households in their decision making process by providing relevant information such as appropriate system sizes, vendor ratings etc.

The Government has also allowed households to access collateral-free low-interest loan of around 7 per cent at present for installation of residential Rooftop Solars.

To facilitate, the government has announced that a Model Solar Village will be developed in each district of the country to act as a role model for adoption of the scheme.

With this, the households will be able to save electricity bills as well as earn additional income through sale of surplus power to Distribution Companies. A 3 kW system will generate more than 300 units a month on an average for a household.