PM-Surya Ghar Muft Bijli Yojana: Over 1 crore households registered for Centre’s solar rooftop scheme
What is the PM Surya Ghar Muft Bijli Yojana?
The scheme was launched by the current government with an aim of providing free electricity to households who opt to install rooftop solar electricity units. Under the said scheme, the households will be able to get 300 units of electricity for free every month.
The scheme focuses on the household segment with up to 3 kW system, which covers most of the residential consumers in India.
What is the amount of subsidy for households?
The subsidy program offers a 60% subsidy on systems up to 2 kW capacity and a 40% subsidy on systems between 2-3 kW. The subsidy is limited to systems up to 3 kW capacity, meaning no financial assistance will be given for capacities exceeding 3 kW.
Based on current benchmark prices, eligible beneficiaries will receive a subsidy of Rs 30,000 for 1 kW systems, Rs 60,000 for 2 kW systems, and Rs 78,000 for 3 kW systems or higher.
How can you get the system installed?
- Register on the national rooftop solar portal
- Choose a vendor from the list provided on the portal
- A valid electricity connection is required for it and the household must not have availed any other subsidy for solar panels.
What happens if the cost of system installation goes beyond subsidy?
Households have the option to access collateral-free, low-interest loans until the subsidy is credited. If a consumer cannot cover the entire upfront cost required for installation, they can pay 10% upfront and secure a loan for the remaining 90% at a 7% interest rate. Once the central subsidy is disbursed upon system commissioning, it offsets the loan amount, with the remaining 30% repaid over a 10-year period through monthly installments.
Various banks offer loans at approximately 7%, calculated at 0.5% above the prevailing repo rate. For systems up to 3 kW, the interest rate remains stable. For example, if the repo rate decreases from the current 6.5% to 5.5%, the effective interest rate for consumers decreases to 6%.
