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Muft Bijli Yojana: Free Electricity for 1 Cr Houses; Cabinet Approves PM Surya Ghar Scheme

Cabinet approved Muft Bijli Yojana scheme that aims to provide free electricity to 1 crore houses. Find out how this solar scheme will benefit households, including subsidies, low-interest loans, and income opportunities.

The Union Cabinet on Thursday, chaired by Prime Minister Narendra Modi approved the PM Surya Ghar: Muft Bijli Yojana that aims at installing rooftop solar and providing free electricity up to 300 units every month to One Crore households. The solar scheme was launched by PM Modi on February 13, 2024 and has a total outlay of Rs 75,021 crore.

In connection to this latest development, Union Minister Anurag Thakur said, “Today cabinet meeting was held under the leadership of PM Modi. ‘PM Surya Ghar Muft Bijli Yojana’ has been approved today, one crore families will get 300 units of free electricity under this scheme.”

As per a government press release, “The scheme provides a CFA of 60% of system cost for 2 kW systems and 40% of additional system cost for systems between 2 to 3 kW capacity. The CFA will be capped at 3 kW. At current benchmark prices, this will mean Rs 30,000 subsidy for 1 kW system, Rs 60,000 for 2 kW systems and Rs 78,000 for 3 kW systems or higher.”

How Will This Scheme Benefit People?

  • The release further states that the households will apply for subsidy through the National Portal and will be able to select a suitable vendor for installing rooftop solar. The Portal will also assist the households in their decision-making process by providing relevant information such as appropriate system sizes, benefits calculator, vendor rating etc.

  • The scheme will also enable households to access collateral-free low-interest loan products of around 7% at present for installation of residential RTS systems up to 3 kW.

  • A Model Solar Village will be developed in each district of the country to act as a role model for adoption of rooftop solar in rural areas,

  • Urban Local Bodies and Panchayati Raj Institutions shall benefit from incentives for promoting RTS installations in their areas.

  • The scheme will also provide a component for payment security for renewable energy service company (RESCO) based models as well as a fund for innovative projects in RTS.

Earlier the prime minister said on X, “In order to further sustainable development and people’s wellbeing, we are launching the PM Surya Ghar: Muft Bijli Yojana. This project, with an investment of over Rs 75,000 crore, aims to light up 1 crore households by providing up to 300 units of free electricity every month.”

The government release said that through this new scheme the households will be able to save electricity bills as well as earn additional  income through sale of surplus power to DISCOMs. A 3 kW system will be able to generate more than 300 units a month on an average for a household.

“The proposed scheme will result in addition of 30 GW of solar capacity through rooftop solar in the residential sector, generating 1000 BUs of electricity and resulting in reduction of 720 million tonnes of CO2 equivalent emissions over the 25-year lifetime of rooftop systems. It is estimated that the scheme will create around 17 lakh direct jobs in manufacturing, logistics, supply chain, sales, installation, O&M and other services,” the release added.

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