The Ministry of New and Renewable Energy had issued draft norms for central financial assistance and a payment security mechanism under the Renewable Energy Services Company (RESCO) model and utility-led demand aggregation model of the new rooftop solar scheme.

Under the RESCO model, it was outlined that a renewable energy company would procure, install, and maintain a rooftop solar system for a consumer for at least five years, without requiring an upfront payment from the consumer. The renewable energy company would provide the upfront financing.

The PM Surya Ghar Muft Bijli Yojana, with an outlay of Rs 750 billion, was to be implemented until FY27. The scheme had previously issued guidelines for the release of funds to residential consumers for installations through registered vendors but did not include the RESCO or utility-led aggregation models for rooftop solar installations.

According to the proposed draft norms, consumers would only pay for the electricity generated through a tariff to the RESCO operator. Once the operator’s investment had been repaid, the system would be transferred to the consumer, and the tariff would be saved, effectively making the electricity generated nearly free.