Housing Societies to Receive ₹18,000/kW CFA Under New Rooftop Solar Program

The program, announced in January, did not include GHS/RWA subsidy structures


The Ministry of New and Renewable Energy (MNRE) has announced that the President of India has approved the PM-Surya Ghar: Muft Bijli Yojana, with a budget of ₹750.21 billion (~$9 billion). The ministry also issued a breakdown of central financial assistance for residential houses, group housing societies, and residential welfare associations.

The PM Surya Ghar initiative aims to install rooftop solar projects in ten million poor and middle-class households.

The Indian government launched the program on February 13, 2024. It encompasses all aspects of the previous Phase II, including its financial allocation and obligations.

The budget breakdown for the program is as follows, with nine sub-components allocated funds accordingly. Central financial assistance (CFA) for residential consumers stands at ₹657 billion ($7.9 million), while incentives for DISCOMs amount to ₹49.5 billion ($597 million), encompassing previous program expenditures.

Additionally, incentives for local bodies receive ₹10 billion ($120.6 million), model solar villages in each district receive ₹8 billion ($96.4 million), innovative projects get ₹5 billion ($60.3 million), and the payment security mechanism is allotted ₹1 billion ($12.06 million).

Capacity building, awareness and outreach, and service charges, each set at 1% of CFA, are allocated ₹6.57 billion (~$79.2 million).

The program will be executed through the national portal, and subsidies/CFA under the PM-Surya Ghar: Muft Bijli Yojana will apply to all applications submitted on or after February 13, 2024.

Regarding the CFA distribution, the Ministry provided the following breakdown:

  • Residential sectors with a tender capacity of up to 2 kW or part thereof will receive 60% of the benchmark cost of 2 kW.
  • Additional tender capacity in the residential sector (up to 1 kW) will qualify for 40% of the benchmark cost of the additional kW.
  • No additional CFA will be provided for residential sectors beyond 3 kW.
  • Group housing societies and residential welfare associations (GHS/RWA) for common facilities, including EV charging, up to 500 kW (@3 kW per house), are eligible for 40% of the benchmark cost of additional kW.

Based on the benchmark cost for FY 2023-24, rooftop solar projects up to 2 kW in residential households receive ₹30,000 ($361.85)/kW or part thereof, while additional capacity between 2 kW and 3 kW is eligible for ₹18,000 ($217.12)/kW. GHS/RWA will receive ₹18,000 ($217.12)/kW as central financial assistance.

Detailed operational guidelines for program implementation will be issued separately by the Ministry.

The program recently received cabinet approval in February 2024.

According to Mercom India Research’s newly unveiled 2023 Q4 & Annual Mercom India Rooftop Solar Market Report, India installed 1.7 GW of rooftop solar capacity in 2023, the second-highest annual installation numbers on record.