The Indian government has launched a Rs 75,000 crore scheme, PM Surya Ghar: Muft Bijli Yojana (PMSY), aimed at installing one crore rooftop solar (RTS) systems across the country. This initiative aims to encourage the use of clean energy and reduce dependency on debt-ridden electricity distribution companies. By providing subsidies for solar installations, the scheme is expected to transform household energy consumption.
Under PMSY, the government offers a 60 per cent subsidy on solar units up to 2 kW and 40 per cent for systems between 2-3 kW, with the subsidy capped at 3 kW capacity. This translates to a Rs 30,000 subsidy for a 1 kW system and up to Rs 78,000 for systems of 3 kW or higher. The scheme is designed to encourage homeowners to adopt solar energy and reduce their electricity bills significantly.
As of August 2024, Gujarat leads the rooftop solar race with 4,195 MW installed capacity, followed by Maharashtra (2,487 MW) and Rajasthan (1,269 MW), contributing to India’s total RTS capacity of 13,889 MW. Gujarat's Surya Gujarat scheme from 2019, which offered similar subsidies, laid the foundation for this success.
Despite Gujarat’s dominance, Assam surprised analysts by leading PMSY applications with 2.23 lakh, followed by Gujarat (2.1 lakh) and Maharashtra (1.9 lakh), according to Prabhakar Sharma, a renewable energy expert at JMK Research.
However, the promise of “zero electricity bills” isn’t guaranteed for everyone. About 90 per cent of applicants are availing loans for installations, with many opting for systems larger than the subsidised 3 kW, which incurs charges for usage above 300 units.
Though the PMSY envisions households as independent power producers connected to the grid, they will still experience power cuts during scheduled outages without battery backup. Consumers below the 300-unit threshold may earn rebates, but fixed grid charges and variable solar insolation will impact the overall savings. Still, over time, consumers can expect net gains on their electricity bills, making solar energy a sustainable option for the future.
