MNRE Issues Guidelines for Payment Security and Financial Assistance Under PM Surya Ghar

MNRE has released operational guidelines for the implementation of the Payment Security Mechanism (PSM) and Central Financial Assistance (CFA) components under the PM Surya Ghar: Muft Bijli Yojana to support the growth of rooftop solar installations in residential sectors across India.

These guidelines primarily focus on RESCO Models and Utility-Led Aggregation (ULA) Models, aiming to make solar energy more accessible and affordable for consumers.

The scheme will run until March 31, 2027, and is open to residential consumers eligible for rooftop solar systems under both RESCO and ULA models, ensuring wide access to solar energy solutions.

The primary goal of the scheme is to streamline the process of rooftop solar installations by providing financial assistance, ensuring timely payments to RESCO developers, and enabling critical support through DISCOMs, State Governments, and State Designated Entities.

Under the new guidelines, CFA applies to grid-connected rooftop solar systems, including specialised options like Building Integrated PV (BiPV), as well as Group Net Metering and Virtual Net Metering setups. The guidelines also specify that for ULA proposals, CFA is applicable to installations up to 3 kW per household, further promoting solar adoption among residential consumers.

In terms of financial mechanisms, the RESCO Mode provides a significant benefit by allowing consumers to install rooftop solar systems without any upfront costs. Instead, a Renewable Energy Service Company (RESCO) takes charge of the installation, operation, and maintenance of the system for a period of five years. Consumers only pay based on their electricity consumption, and the ownership of the system may transfer to the consumer after the completion of the contract. Furthermore, RESCOs may also enter into agreements with DISCOMs for selling any excess power generated to the grid, with DISCOMs assisting in tariff collection on behalf of the RESCOs.

The Utility Led Aggregation (ULA) Models, designed to be led by DISCOMs, State Governments, or State-owned entities, also aim to boost rooftop solar installations across residential areas. The models are divided into two categories viz. Model I, which includes Utility Owned Assets, where the utility owns the system for five years, with an option to transfer ownership to the consumer thereafter, and Model II, which Consumer Owned Assets, where the utility contributes additional grants for system installation, but the consumer owns the rooftop solar system right from the start. Both models are intended to provide flexible, scalable solutions for rooftop solar installations.

One of the most critical components of the scheme is the Payment Security Mechanism, which establishes a structured financial framework to ensure smooth transactions in rooftop solar projects under the PM Surya Ghar: Muft Bijli Yojana. To support this mechanism, a INR 100 crore corpus fund will be administered by the National Programme Implementation Agency (NPIA) in an interest-bearing bank account, accessible to State/UT governments that propose ULA projects involving RESCO partners. As part of the framework, the selected RESCO will contribute to the PSM corpus by paying a one-time fee of INR 2000 per installation under the ULA model, ensuring the financial security of these projects.

Moreover, the NPIA will establish bilateral agreements with State-designated entities to ensure the timely settlement of dues to RESCO partners. These agreements will stipulate certain conditions, including the State Guarantee for payment of dues, with interest charges applicable on delayed payments. The interest rate will be based on the State Bank of India’s marginal cost of funds, with a 0.5 percent increase in interest for each month of delay, capped at 3 percent above the base rate. This mechanism ensures that any delays in payments are duly addressed, allowing RESCO vendors to maintain financial stability.

The State government will also take responsibility for centralised and automated billing based on connected generation meters for all installations under the scheme. This will enable proper tracking of payments and solar energy generation, ensuring full transparency and accountability. If a Utility fails to make payments within 15 days of raising a claim, the NPIA will intervene and ensure the RESCO vendor is paid as per the terms of the RESCO-Utility agreement. The NPIA will then seek payment from the ULA, along with the applicable interest charges, ensuring that Utilities remain accountable for timely settlement of dues.

These new guidelines are designed to create a streamlined and secure framework for rooftop solar installations, empowering residential consumers to adopt clean energy solutions while ensuring that financial transactions are handled efficiently.