Union Cabinet Approves Rs 75,021-Crore PM Free Electricity Scheme

• 01 Mar 2024

On 29th February, the Union Cabinet approved the PM Free Electricity scheme, allocating Rs 75,021 crores to promote rooftop solar installations in India.

Key Points

• Funding and Subsidy Structure: The scheme entails 60% funding for 2 kW systems and 40% for 2-3 kW systems, with households applying for Central subsidies through a dedicated portal. Loans at around 7% interest cover the remaining installation costs.
• Financing Details: Contradictory statements emerge regarding financing: one suggests households will bear no costs, while another indicates public sector units will cover expenses through loans, repaid via surplus power sales.
• Implementation Strategy: Public sector units, collaborating with private companies, will spearhead installation efforts, focusing on systems under 3 kW capacity.
• Solar village models will be established nationwide, with incentives for urban and rural bodies to promote rooftop solar.
• Budgetary Allocation and Benefits: Finance Minister’s budget speech introduced the scheme, projecting annual benefits of Rs 15,000-18,000 per household. Prime Minister Narendra Modi announced the initiative in January.
• Current Scenario and Future Goals: Currently, household rooftop solar installations represent only a fraction of total generated capacity, emphasizing the scheme's significance in scaling up solar adoption.