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PM-Surya Ghar: Muft Bijli Yojana

Why is it in the news?

  • The Union Cabinet approved the “PM-Surya Ghar: Muft Bijli Yojana” (PM Free Electricity scheme) with a budget of ₹75,021 crores to promote rooftop solar installations in India.
  • The scheme aims to provide 300 units of “free electricity” every month to approximately one crore households.

More about the news

  • The Centre will subsidize 60% of the installation cost for 1-2 kW systems and 40% for systems of 2-3 kW capacity.
  • Eligible households can apply for the subsidy through a Central portal and select a vendor for installation.
  • For the remaining costs, households can access collateral-free, low-interest loans of around 7% for systems up to 3 kW.
  • Finance Minister Nirmala Sitharaman announced the scheme in the recent Budget Speech, estimating benefits of ₹15,000-18,000 annually per household.
  • Currently, household rooftop solar installations constitute only about 25% of the total 12 GW generated from rooftop solar installations.

·       A “Model Solar Village” will be established in each district to promote rooftop solar adoption in rural areas.

·       Urban Local Bodies and Panchayati Raj Institutions will receive incentives for promoting rooftop solar installations.

·       Provision is made for payment security for Renewable Energy Service Companies (RESCOs) and a fund for innovative rooftop solar projects.


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