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

The Union Cabinet approved a ₹75,021crore package for the ‘PMSurya Ghar: Muft Bijli Yojana’ (PM Free Electricity scheme) to promote rooftop solar (RTS) installations in India.

The scheme envisages providing 300 units of “free electricity” every month to one crore households. However, it was not immediately clear how the scheme officially unveiled on Thursday would result in free electricity to one crore households.

The Centre will fund, an accompanying press statement from the Union Power Ministry says, 60% of the cost for installing 2 kW (kilowatt) systems and 40% of the cost for systems of 23 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 systems, ₹60,000 for 2 kW systems and ₹78,000 for 3 kW systems or higher,” a press statement from the Ministry noted.

As a next step, households will apply for subsidy through a Central portal and be able to select a suitable vendor for installing a rooftop solar system. The national portal will assist the households in their decisionmaking 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 collateralfree lowinterest loan products of around 7% at present for installation of residential RTS systems up to 3 kW,” the release noted. This implies that minus the Central subsidy, the rest of the installation expenses have to be borne by the aspirant consumer.

Power

Minister

R.K.

Singh, had explained the financing of the scheme differently in an interaction with reporters, as reported by The Hindu, on February 3. He had said that public sector units, affiliated to the Ministry, would be reaching out to “eligible” households and install the rooftop solar systems for free.

The PSU, or its affiliated agency, would be responsible for taking out a loan to finance the component not funded by the Central subsidy. This loan would be repaid to the bank by consumers selling surplus power produced back to the grid.

In his interaction, he said that “60% of the cost of installation will be subsidised by the Centre. For the rest, [a Central] public sector unit will take a loan [from a bank] and will repay from the cost of electricity [used by the household] over and above the 300 units.”

The Union Cabinet on Thursday approved the nutrientbased subsidy (NBS) rates for the upcoming kharif season for Phosphatic and Potassic (P&K) fertilizers and the inclusion of three more fertilizer grades under the NBS scheme.

The Centre said tentative budgetary requirements for the scheme would be about ₹24,420 crore. The subsidy on nitrogen has been fixed at ₹47.02 per kilogram, phosphatic (P) at ₹28.72 per kg (₹20.82 per kg in 2023 rabi season), potassic (K) at ₹2.38 per kg, and sulphur (S) at ₹1.89 per kg. The subsidy on nitrogen, potassic, and sulphur was the same in the 2023 rabi season too.

The government said the decision would ensure the availability of fertilizers to farmers at subsidised, affordable and reasonable prices and rationalisation of subsidy on P&K fertilizers in view of recent trends in the international prices of fertilizers and inputs.