A new program to install rooftop solar systems on 10 million households across India will be called ‘PM Surya Ghar: Muft Bijli Yojana’ and will have an outlay of ₹750 billion (~$9.04 billion), Prime Minister Narendra Modi announced in a post on the microblogging site X.

The Prime Minister added in the post that the Union government will ensure there is no cost burden on the people and substantive subsidies with heavily concessional bank loans will be offered. “All stakeholders will be integrated into a National Online Portal, which will further convenience,” he said.

A subsidy of ₹30,000 (~$361)/kW will be provided for residential rooftop solar systems up to 2 kW. Additional ₹18,000 (~$217)/kW will be available for systems of over 2 kW and up to 3 kW capacity, while for projects exceeding 3 kW, depending on the average monthly power consumption of the household, the total subsidy will be capped at ₹78,000 (~$939).

According to a source Mercom spoke to, the new program will replace the existing rooftop solar program deployed by the Ministry of New and Renewable Energy and the current subsidy structure.

The MNRE is expected to provide detailed guidelines for the new program soon.

“To popularise this program at the grassroots, Urban Local Bodies and Panchayats shall be incentivized to promote rooftop solar systems in their jurisdictions,” he added in another post.

The program was announced in January when the Prime Minister said the aim is to reduce the electricity expenditure of poor and middle-class households while enabling India’s self-reliance in the field of energy.

It was one of the major programs unveiled in the interim Budget 2024 presented to Parliament by Finance Minister Nirmala Sitharaman. Every beneficiary household would save up to ₹18,000 (~$216) a year on electricity expenses, she had said.

The Ministry of New and Renewable Energy recently allotted CPSUs state-wise responsibility for accelerating the implementation of rooftop solar programs across the country.

Designated central public sector undertakings (CPSUs) will install 3 kW solar systems at households without any upfront investment from the residents, Union Minister for Power and New & Renewable Energy R K Singh said earlier this month. These CPSUs will secure loans to establish the systems, now benefiting from a 60% subsidy compared to the previous 40%.

For ten years, participating households will receive up to 300 units of free electricity monthly. Any surplus electricity income will contribute to repaying the CPSU’s loan, which is expected to be completed within this timeframe. Following the ten years, households will also earn income from surplus electricity generation for the subsequent 15 years or the system’s lifespan.

The latest rooftop solar initiative aims to energize the government’s efforts towards residential solarization, which have lagged behind utility-scale solar projects.

According to the Q3 2023 Mercom India Rooftop Solar Market Report, India added slightly more than 1.3 GW of rooftop solar capacity in the initial nine months of 2023.