Revolutionizing Solar Power: The government is planning to raise the subsidy for rooftop solar installations to approximately 60% under the newly introduced Pradhan Mantri Suryoday Yojana, as stated by the Union Minister for New and Renewable Energy, R.K. Singh, on Friday. Currently, the government offers a 40% subsidy for such installations.
Singh emphasized the challenges faced by individuals in obtaining loans and expressed the intention to enhance the subsidy from the existing 40% to around 60%. He mentioned that the remaining 40% would still be obtainable through a loan. The implementation of the scheme will involve the establishment of Special Purpose Vehicles (SPVs) by central public sector enterprises (CPSEs) designated for each state.
Singh explained, “They (CPSEs) will set up SPVs for implementing this. They will take the loans. And the excess unit that will be generated will go to pay off the loan,” noting that the loan tenure is expected to be up to 10 years. After the loan is repaid in the 10-year period, the rooftop solar infrastructure will be transferred to the households. Subsequently, these households can sell excess power to the discoms, as mentioned by Singh, who also oversees the power portfolio.
In the interim budget presentation for FY25, Union Finance Minister Nirmala Sitharaman highlighted that the 10 million beneficiaries of the new scheme could receive 300 units of free power through rooftop solar installations, resulting in an annual saving of ₹15,000-18,000. The government has allocated ₹10,000 crore for rooftop solar in the budget, as stated by Union Finance Secretary TV Somanathan.
The new scheme, announced by Prime Minister Narendra Modi on January 22, designates state-run REC as the implementing agency, providing up to ₹1.2 lakh crore for rooftop solar panel installations. This initiative is crucial as the government’s target for rooftop solar installations has not gained momentum. The parliament standing committee on energy reported last May that only 5.87 GW of rooftop solar projects had been installed against the target of 40 GW by the end of 2022. Currently, the grid-connected solar rooftop capacity is 11.08 GW out of the total solar capacity of 72.31 GW, according to the Ministry of New and Renewable Energy.