'PM - Surya Ghar: Muft Bijli Yojana' promises to save Rs 15K per household

The Centre's 'PM - Surya Ghar: Muft Bijli Yojana' that aims to provide free electricity to one crore households, who opt to install rooftop solar electricity unit of 3 kilowatt capacity, promises an "assured saving of approximately Rs 15,000 in a year for a household consuming up to 300 units a month".

According to the government, such a household, by generating its own electricity, will save Rs 1,800-1,875 on electricity bill.

The ambitious scheme was approved by the Union Cabinet on February 29, with an outlay of Rs 75,021 crore.

The scheme provides for a subsidy of 60 per cent of the solar unit cost for systems up to 2 kilowatt capacity and 40 per cent of additional system cost for systems between 2 to 3 kilowatt capacity.

The subsidy has been capped at 3 kilowatt capacity.

At current benchmark prices, this will mean Rs 30,000 subsidy for 1 kilowatt system, Rs 60,000 for 2 kilowatt systems and Rs 78,000 for 3 kilowatt systems or higher, the government noted.

The applicant must be an Indian citizen to be eligible for the scheme. The applicant must own a house with a roof that is suitable for installing solar panels, the household must have a valid electricity connection, and must not have availed of any other subsidy for solar panels.

The interested consumer has to register on the national portal www.pmsuryaghar.gov.in to apply for the scheme. This has to be done by selecting the state and the electricity distribution company.

The National Portal will assist the households by providing relevant information such as appropriate system sizes, benefits calculator, vendor rating etc. The consumers can choose the vendor and the make of the rooftop solar unit they wish to get installed. The consumer can also avail of a loan facility to finance the solar unit, the government said.

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 kilowatt, it added.

The interest rate has been pegged at 0.5 per cent above the prevailing Repo Rate decided by the Reserve Bank of India (RBI) from time to time. In the event of the Repo Rate, which is 6.5 per cent at present, getting reduced to say 5.5 per cent, the effective interest rate for consumers will become 6 per cent instead of the current 7 per cent.

As per the government, even after deducting the EMI of Rs 610 on the loan availed for financing the solar unit, the savings would be around Rs 1,265 per month or about Rs 15,000 in a year. The savings for the households not availing of loan will be even higher.