The Union Cabinet on Thursday approved the PM-Surya Ghar: Muft Bijli Yojana with a total outlay of ₹75,021 crore for installing rooftop solar (RTS) systems and providing free electricity up to 300 units every month for one crore low income households.

Prime Minister Narendra Modi had launched the scheme on February 13, 2024.

Following which, the government has launched a massive campaign for raising awareness and generating applications from interested households. Households can register themselves on, to avail benefits under the scheme.

Simplifying installation

The scheme provides a central financial assistance (CFA) of 60 per cent of the system cost for 2 kilowatt (kW) systems and 40 per cent of additional system cost for systems between 2-3 kW capacity. The CFA will be capped at 3 kW, the Ministry of New and Renewable Energy (MNRE) said.

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, it added.

The households can apply for subsidy through the Portal and will be able to select a suitable vendor for installing the rooftop solar (RTS).

The National Portal will also assist the households in their decision-making process by providing relevant information such as appropriate system sizes, benefits calculator, vendor rating, etc.

Households will be able to access collateral-free, low-interest loan products of around 7 per cent at present for installation of residential RTS systems up to 3 kW.

Model solar village

The government will set up a model solar village in each district of the country to act as a role model for the adoption of RTS in rural areas.

This provision is available for Urban Local Bodies and Panchayati Raj Institutions as well. They can also benefit from incentives for promoting RTS installations in their areas. The scheme provides a component for payment security for renewable energy service company (RESCO) based models as well as a fund for innovative projects in RTS.

Outcome and Impact

Through this scheme, the households will be able to save electricity bills as well as earn additional income through the 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 billion units (BUs) of electricity and resulting in reduction of 720 million tonnes of CO2 equivalent emissions over the 25-year lifetime of RTS systems.

It is estimated that the scheme will create around 17 lakh jobs in manufacturing, logistics, supply chain, sales, installation, O&M and other services.