Cabinet Approves Muft Bijli Yojana Plan to Give 1 Cr Houses Free Electricity

Under the direction of Prime Minister Narendra Modi, the Union Cabinet on Wednesday authorized the PM Surya Ghar: Muft Bijli Yojana, which intends to construct rooftop solar and provide one crore homes free power for up to 300 units per month. On February 13, 2024, Prime Minister Modi unveiled the solar project, which would cost a total of Rs 75,021 crore.

Union Minister Anurag Thakur said, “Today’s cabinet meeting was held under the leadership of PM Modi,” in reference to this most recent incident. The “PM Surya Ghar Muft Bijli Yojana,” which would provide 300 units of free energy to one crore homes, was authorized today.

“The scheme provides a CFA of 60% of system cost for 2 kW systems and 40% of additional system cost for systems between 2 and 3 kW capacity,” reads a news statement from the ministry. There will be a 3 kW limit on the CFA. This translates to a subsidy of Rs 30,000 for a 1 kW system, Rs 60,000 for a 2 kW system, and Rs 78,000 for a 3 kW system or more at the current benchmark pricing.

According to the statement, families will be able to choose an appropriate rooftop solar installer and apply for subsidies via the National Portal. The Portal would also help the families make decisions by offering pertinent data, like vendor ratings, benefits calculators, and suitable system sizes.

In addition, the program will make low-interest loans available to families without collateral at current rates of around 7% for the installation of residential RTS systems up to 3 kW.

Incentives for encouraging RTS installations in their regions would be provided to Urban Local Bodies and Panchayati Raj Institutions, and a Model Solar Village will be established in every district of the nation to serve as a role model for the adoption of rooftop solar in rural areas.

The plan would also include a fund for creative RTS initiatives and a payment security component for models based on renewable energy service companies (RESCOs).

“We are launching the PM Surya Ghar: Muft Bijli Yojana to further sustainable development and people’s wellbeing,” the prime minister had earlier said on X. This initiative, which will cost more than Rs 75,000 crore, would provide up to 300 units of free power per month, with the goal of lighting up 1 crore houses.

According to a government announcement, families will be able to reduce their energy costs and generate extra revenue by selling their excess power to DISCOMs under this new program. For a family, a 3 kW system may produce more than 300 units per month on average.

“Over the course of the 25-year rooftop system’s lifespan, the planned project would add 30 GW of solar capacity to the residential sector’s supply of solar energy, producing 1000 BUs of electricity and 720 million tonnes of CO2 equivalent emissions reduction. According to the statement, the program is expected to directly generate around 17 lakh new employment in manufacturing, supply chain, logistics, sales, installation, O&M, and other services.

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