Free electricity will be provided for households with a consumption of less than 300 units a month by installing rooftop solar systems on their homes, according to an announcement made in the Union Budget 2024 recently.

Disclosing the details of the program, Union Minister for Power and New & Renewable Energy R K Singh told a news channel that households will not be required to pay anything for the rooftop solar system.

The designated central public sector undertakings (CPSU) will set up the 3 kW solar systems, for which the household will not be required to make any investment. The CPSUs will be availing loans for setting up the systems, which will now carry a subsidy of 60% in place of the earlier 40%.

For ten years, the household will get to enjoy free electricity of up to 300 units a month. The income from any surplus electricity generated will go towards servicing the loan availed by the CPSU. The loan is expected to be repaid within this period.

After ten years, the household with the rooftop solar system will not only get free electricity up to 300 units a month but will also derive income from any surplus electricity that is generated for the next 15 years or the life of the system.

The CPSU will exit the program after ten years, when the household will acquire full ownership of the rooftop solar system.

The maintenance of the rooftop solar system will be the responsibility of the designated CPSU, the minister said.

Singh said the new program is different from the earlier one, under which the household was required to avail the loan for installing the rooftop solar system.

The free electricity program for 10 million households using rooftop solar under the Pradhan Mantri Suryoday Yojana 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.

The new rooftop solar program is expected to spur the government’s residential solarization initiative, which so far has not gained as much traction unlike the utility-scale solar programs. India installed just over 1.3 GW of rooftop solar capacity in the first nine months of the calendar year 2023, according to the Q3 2023 Mercom India Rooftop Solar Market Report.

India’s cumulative rooftop solar capacity stood at 10.1 GW at the end of Q3 2023.