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01/03/24 08:46 AM IST

Cabinet approves ₹75,000-crore ‘free electricity’ solar scheme

In News
  • The Union Cabinet  approved a ₹75,021-crore package for the “PM-Surya Ghar: Muft Bijli Yojana” (PM Free Electricity scheme) to promote rooftop solar (RTS) installations in India.
PM- Surya Ghar
  • The scheme claims to be able to provide 300 units of “free electricity” every month to one crore households.
  • The Centre will fund 60% of the cost for installing for 2 kW (kilowatt) systems and 40% of the cost for systems from 2-3 kW capacity.
  • Systems of higher wattage will not be eligible for Central subsidy.
  • At current benchmark prices, this will mean ₹30,000 subsidy for 1 kW system, ₹60,000 for 2 kW systems and ₹78,000 for 3 kW systems or higher.
  • Households will apply for subsidy through a Central portal and be able to select a suitable vendor for installing rooftop solar system.
  • The national portal will assist the households in their decision-making process by providing relevant information such as appropriate system sizes, benefits calculator, vendor rating, etc.
  • For the remaining costs, 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.
  • This implies that minus the Central subsidy, the rest of the installation expenses have to be borne by the aspirant consumer.
Features
  • A“Model Solar Village” will be developed in each district of the country to act as a role model for adoption of RTS in rural areas.
  • Urban Local Bodies and Panchayati Raj Institutions would also benefit from incentives for promoting RTS installations in their areas.
  • The scheme also provided a component for payment security for renewable energy service companies (RESCOs) as well as a fund for innovative projects in RTS.
Outcome & Impact
  • Through this scheme, the households will be able to save electricity bills as well as earn additional income through sale of surplus power to DISCOMs. A 3 kW system will be able to generate more than 300 units a month on an average for a household.
  • The proposed scheme will result in addition of 30 GW of solar capacity through rooftop solar in the residential sector, generating 1000 BUs of electricity and resulting in reduction of 720 million tonnes of CO2 equivalent emissions over the 25-year lifetime of rooftop systems.
  • It is estimated that the scheme will create around 17 lakh direct jobs in manufacturing, logistics, supply chain, sales, installation, O&M and other services.
Source- The Hindu

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