The Ministry of New and Renewable Energy (MNRE) has issued operational guidelines to set up one model solar village in every district of the country under the PM-Surya Ghar: Muft Bijli Yojana.

An amount of ₹8 billion (~$95.2 million) has been allocated for this component, with a provision of ₹10 million (~$119,110) in central financial assistance for each model village.

The primary objectives of the model solar villages are to facilitate access to clean and green energy in rural areas through rooftop solar systems and to reduce dependency on utilities. The program will also promote solar-based home lighting, water systems, agricultural pumps, and streetlights.

To be eligible, a village must be a revenue village with a population of over 5,000. Special category states have a threshold of 2,000.

The state renewable energy development agency or another nominated entity will implement the program. The model solar villages will be selected in a challenge mode, where villages compete based on the total distributed renewable energy capacity installed under PM Surya Ghar, and other programs like PM Kusum.

The implementing agency will develop a detailed project report (DPR) to transition the village to a solar-powered model, leveraging various renewable energy technologies.

In this DPR, the agency can choose any mix of renewable energy technologies based on local context and potential to utilize the Central Financial Assistance available under the program. It can maximize the deployment of renewable energy in the government buildings in the village.

Public projects can be supported up to 100% of the project cost. However, if the projects support collectives like self-help groups, primary-level cooperative societies, dairies, and fisheries, a contribution from the beneficiary collective of at least 10% will be taken for the CFA benefits to be extended to them.

Projects that may be included in the DPR may consist of:

• Community solar plants (with or without battery storage)
• Solar-powered equipment for livelihood generation by SHG groups under NRLM
• Government building rooftop solar systems
• Solar-based public lighting
• Solar agri-PV pumps

A district-level committee will oversee the implementation and ensure the completion of projects within one year of approval. The funds will be released in installments based on project milestones.

The committee may opt to identify potential candidate villages from among the eligible villages based on the feasibility of implementation of rooftop solar, community mobilization, and interest. These potential candidate villages will then compete for selection as the model solar village of the district.

The MNRE has allocated ₹10 billion (~$119.5 million) to incentivize Urban Local Bodies and Panchayati Raj Institutions to actively promote and facilitate the adoption of residential rooftop solar systems under the PM Surya Ghar program. The program aims to install rooftop solar systems in 10 million households by 2026-27.