PM Modi’s plan to slash electricity bills to benefit consumers, save environment
PM Modi’s plan to slash electricity bills to benefit consumers, save environment
Prime Minister Narendra Modi’s ambitious aim to reduce electricity bills to zero using solar power appears achievable despite challenges such as limited awareness about rooftop solar systems.
In an exclusive interview with New18 Group Editor-In-Chief Rahul Joshi, News 18 Kannada Editor Hariprasad, and News 18 Lokmat Anchor Vilas Bade, Prime Minister Modi said he aims to slash electricity bills to zero by ensuring every household draws renewable power from rooftop solar panels.
Experts believe the renewed solar rooftop scheme the PM Surya Ghar: Muft Bijli Yojana would help consumers reduce their electricity bills to nearly zero if they install the maximum permissible size of 3kW.
“Under the new scheme, the capital subsidy is capped at a 3 kW system size, which is expected to produce an average of 250 kWh per month. We expect more than 90% of consumers to fall under this limit. In other words, most consumers installing the maximum permissible size would be able to reduce their bills to near zero. However, if the average system size is smaller, say between 1-2 kW, the number of consumers that can reduce their bills to zero would be much smaller,” said Vinay Rustagi, Senior Director, CRISIL Market Intelligence and Analytics.
By accessing renewable energy sources at home, households could charge their electric scooters and cars instead of spending money on petrol and diesel, Modi said. “This means the transportation cost of Rs 1,000-Rs 2,000 per month for the person should also become zero,” Modi added.
The Prime Minister also highlighted that switching to renewable energy and electric vehicles would lead to a cleaner environment and savings of “billions of dollars” on petroleum imports.
However, lack of awareness regarding the scheme, however, remains a challenge for implementation of the initiative by the government, industry experts indicated.
“The new PM Surya Ghar: Muft Bijli Yojana is the government’s latest attempt to revive investment in the rooftop residential solar segment. There are various reasons why this segment is lagging behind on the government’s ambitious renewable energy targets, including lack of awareness, lack of awareness about the overall support system that is available, the lack of awareness about qualified vendors, and also the processes involved in terms of getting the approval from the discounts,” said Vikram V, Vice President and Co-Group Head (Corporate Ratings), ICRA on April 1 in a podcast.
Crisil’s Rustagi added that the government also needs to lay strong focus on ensuring a high-quality installation ecosystem so that consumers are happy with the performance.
Industry leaders on the latest ‘Bijli yojana’
Launched in February, PM Surya Ghar: Muft Bijli Yojana was welcomed by the power and renewables sector. With an aim to install rooftop solar panels in 1 crore houses in India, the government announced an investment of over Rs 75,000 crore, which would provide up to 300 units of free electricity every month.
Tata Power Chief Executive Officer Praveer Sinha told Moneycontrol on February 14 that the company would be going big with the new scheme as a trusted vendor/distributor. “The timing of the revamped scheme could not have been better for us. The target of installing solar panels in one crore households under the scheme will need DCR (domestic content requirement) solar PV modules. Tata Power, with its new module manufacturing unit, will be in a good position to supply DCR modules for this scheme,” Sinha said.
REC Ltd, which has been designated as the overall programme implementation agency for the rooftop solar scheme, considers the target to be challenging but certainly achievable.
“The target, within the given time frame, will be a challenging task because we will have to coordinate with multiple stakeholders – owners of rooftops, distribution companies, vendors, financing companies and so on. However, we are certain of achieving the given target,” REC’s Chairman and Managing Director Vivek Kumar Dewangan said on January 23.
PM Surya Ghar: Muft Bijli Yojana
The scheme provides central financial assistance of 60 percent of the system cost for 2 kW systems and 40 percent of additional system cost for systems between 2 kW to 3 kW capacity. The central assistance will be capped at 3 kW. At current benchmark prices, this will mean Rs 30,000 subsidy for 1 kW system, Rs 60,000 for 2 kW systems and Rs 78,000 for 3 kW systems or higher.
Households can apply for subsidy through the National Portal and can also select a suitable vendor for installing rooftop solar. The website also assists households by providing information such as appropriate system sizes, a benefits calculator and vendor ratings.
Households will be able to get collateral-free, low-interest loan products of around 7 percent for installing residential rooftop solar systems up to 3 kW.