PM Surya Ghar Yojana, 2024

by Sneha Singla Sneha is a second year undergraduate student at Lady Shri Ram college, pursuing an honours in Political Science with a minor in Economics.

Source: pib.gov.in

INTRODUCTION AND CONTEXT

Launched on February 15, 2024, the PM Surya Ghar scheme aims to provide free and sustainable electricity to households in India, by enabling a transition to solar energy. Under the scheme,

households will be provided with a subsidy on the costs to install solar panels on their roofs. The scheme provides for a subsidy of 60% of the solar unit cost for systems up to 2kW capacity and 40 percent of additional system cost for systems between 2 to 3kW capacity. The subsidy has been capped at 3kW capacity. The scheme is expected to benefit 1 crore households across India, with a targeted implementation of FY 2026-27. It is estimated that the scheme will save the government Rs. 75,000 crore per year in electricity costs.

Based on average usage and subsequent solar plant capacity requirements, the government stipulates various degrees of subsidy.

Average Monthly Electricity Consumption (units)	Suitable Rooftop Solar Plant Capacity	Subsidy Support
0-150	1-2 kW	₹ 30,000/- to ₹ 60,000/-
150-300	2-3 kW	₹ 60,000/- to ₹ 78,000/-
> 300	Above 3 kW	₹ 78,000/-

(source: myscheme.gov)

The problem addressed by this policy is wide in its scope. With growing infrastructure demands in India, an increase in energy demand is inevitable. India’s share of global energy demand is predicted to double to 11% in 2040.¹ In this context, the diversification of fuel sources from fossil fuels to renewable energy is important on two fronts: firstly, to address climate change in line with global commitments and secondly, to ensure self-sufficiency. While hydro-power is capital intensive and wind-power is limited only to exteriors, solar power is a capital-efficient way for ensuring energy security.

CURRENT POLICY APPROACH

KEY STAKEHOLDERS

Residential Households (Consumers)	Households which have a suitable roof, valid electricity connection and are not availing any other subsidy for solar panels are eligible for this. This scheme benefits the consumers by helping them save on electricity bills.
	GHS/RWA (Group Housing Society/ Residents Welfare Association): For common facilities, they receive Rs. 18,000 per kW upto 500 kW (with 3kW per house). This limit is inclusive of individual installations by residents as well.

¹ https://earth.org/india-solar-power/

Solar power plants (Vendors)	Existing SME Business enterprises engaged as Solar vendors/ Channel Partners/ Sub- Contractors registered with the Ministry of New & Renewable Energy (MNRE)/ DISCOM, are to receive banking financing on easier terms. This can range from Rs. 10 lakhs to Rs. 5 crores.
Solar Technicians	The scheme envisions rigorous training for upskilling approx 1 lakh technicians, such as electricians, wiremen and solar technicians. This training will take place through Industrial Training Institute (ITI).
Government	The scheme is expected to reduce the government’s electricity cost by saving an estimated ₹75,000 crore annually. It will also help India reach its international environment obligations.

IMPLEMENTING MECHANISM

The scheme will be implemented by a National programme Implementation Agency (NPIA) at the National level and by the State Implementation Agencies (SIAs) at the state level. Under the scheme, the DISCOMs shall be required to put in place several facilitative measures for promotion of rooftop solar in their respective areas.

Further, in every district, one “Model Solar Village” will be established. The village with highest renewable energy capacity will be provided Rs. 1 crore to build energy self-reliance. A total of Rs. 800 crore have been allocated for this.

Both consumers and vendors may partake in this scheme through the government designated online portal. Consumers must apply with the help of a unique consumer account number. Similarly, vendors may register through the portal. This information is available to consumers, hence enabling two way communication and transactions.

PERFORMANCE AND IMPACT

The benefits of the scheme include low gestation period, no additional requirement of land as a result of leveraging vacant roof space, reduction in transmission and distribution (T&D) losses, and above all, long term energy and ecological security by reduction in carbon emission. Every solar installation offsets carbon emissions equal to planting 100 trees.

As of March 2025, 10 lakh homes were declared solar-powered. Of over 47.3 lakh applications received, subsidies have been given to 6.13 lakh beneficiaries amounting to Rs. 4,770 crores. As for loans, 3.10 lakh loan applications were received, with 1.58 lakh sanctioned and 1.28 lakh disbursed.

CHALLENGES

One of the primary challenges of this scheme is accessibility. Even though subsidies aim to make solar power more accessible, it may lack on a few accounts.
- This scheme may only be availed by those owning houses with roofs, this excludes a significant portion of the population who is most vulnerable to energy insecurity.
- Certain studies suggest that while cost is reduced for beneficiaries of Surya Ghar and other subsidy programmes, the cost rises for those that lack investment capability and cannot benefit from these subsidies.

There exist contradictions within the government framework. Many state govts offer upto 300KWh of grid electricity free to households. Therefore, this seems more attractive as compared to an investment with unforeseeable future returns. Free electricity therefore hampers long-term energy security efforts,
Bureaucratic process vs material gain is a cost-benefit analysis that will be pertinent in determining the extent to which this scheme is successful. This also exists in the context of awareness amongst people about the scheme and its benefits.

RECOMMENDATIONS

Extend the implementation of this scheme to government buildings as well.
Strategically implement data collection mediums at the ground level, in order to gain constant feedback and data-driven insights.
1. This will help understand bureaucratic delays, and why consumers and vendors may not follow up on applications.
2. Further, conduct study into the achievements and challenges of the Model Villages. This will also help understand implementation gaps for bureaucratic perspectives, stakeholder perspective and policy perspective.
Provide more organised pathways for DISCOMs to adopt and promote solar energy.
Increase coordination between various government schemes with regards to renewable energy, free electricity and housing.
Create mechanisms for renting roofs by pooling in money, in order to overcome the hurdle of rooftop requirement.
1. This will create pathways for businesses to systematise the policy, as well as make the investment more accessible.
2. Further, these (along with solar PVs on government rooftops) can be channelised to provide solar electricity to poor households.
Lastly, increase awareness amongst the public by instilling faith in greater long-term returns. This must be seen as a material benefit which outweighs the bureaucratic cost.

CONCLUSION

The PM Surya Ghar Yojana is an important and dynamic scheme, which targets two of the most pressing challenges faced by the nation today: energy security and sustainability. It is the largest scheme of its kind and has an extremely wide scope. While the challenges faced are numerous, effective policy interventions can ensure that the vision of this scheme is achieved.