Rules Issued for Payment Security and CFA Under PM Surya Ghar Yojana

03 Jan 2025 CW Team

Key components

1. Central Financial Assistance (CFA):
CFA will be extended to eligible residential rooftop solar systems under the Renewable Energy Service Company (RESCO) and Utility-Led Aggregation (ULA) models. These systems must meet domestic content requirements (DCR) and approved metering mechanisms to qualify. Non-residential installations or households with pre-existing systems are ineligible.

2. Payment security mechanism:
This mechanism ensures timely payments to RESCO developers by mitigating defaults and delays. Rs 1 billion corpus will support this system, managed by the National Program Implementation Agency (NPIA).

Implementation details
RESCO model:

Third-party developers finance, install, and maintain rooftop solar systems for a minimum of five years. Consumers pay for electricity consumed and may assume system ownership after the project period.

DISCOMs may facilitate tariff collection and support power purchase agreements (PPAs) for surplus power.

ULA model:

Utility-owned assets: Utilities own the systems for at least five years, with potential ownership transfer to households. Utilities may sell generated power under PPAs or provide roof rent.

Consumer-owned assets: Households own the systems from commissioning, contributing up to 10% of the benchmark cost, while utilities manage installations via competitive bidding.

CFA eligibility and rules:

Systems up to 3 kW capacity are eligible for CFA under ULA proposals. Additional technologies like battery storage are excluded.

Installation data must be reported hourly, integrating with the national portal. Proposals from states or union territories must include detailed budgets, clearances, and business models.

Payment security mechanism:

RESCO vendors must contribute Rs 2,000 per installation to the payment security corpus. States must guarantee timely payment settlements to RESCO developers.

Delayed payments incur interest at SBI's marginal cost of funds lending rate (MCLR) plus 5%, increasing incrementally with a cap of 3% above the base rate.

Approved on February 29, 2024, the PM Surya Ghar program aims to install rooftop solar systems in 10 million households by March 2027. As of November 21, 2024, 616,019 installations have been completed.

The guidelines include provisions for automated billing, consumer consent requirements, and penalties for non-compliance. Amendments and clarifications may be issued to address implementation challenges, ensuring the program’s smooth operation.

(Mercom)

The Ministry of New and Renewable Energy (MNRE) has released guidelines for implementing key components of the PM Surya Ghar: Muft Bijli Yojana, aimed at accelerating residential rooftop solar adoption. Key components 1. Central Financial Assistance (CFA): CFA will be extended to eligible residential rooftop solar systems under the Renewable Energy Service Company (RESCO) and Utility-Led Aggregation (ULA) models. These systems must meet domestic content requirements (DCR) and approved metering mechanisms to qualify. Non-residential installations or households with pre-existing systems are ineligible. 2. Payment security mechanism: This mechanism ensures timely payments to RESCO developers by mitigating defaults and delays. Rs 1 billion corpus will support this system, managed by the National Program Implementation Agency (NPIA). Implementation details RESCO model: Third-party developers finance, install, and maintain rooftop solar systems for a minimum of five years. Consumers pay for electricity consumed and may assume system ownership after the project period. DISCOMs may facilitate tariff collection and support power purchase agreements (PPAs) for surplus power. ULA model: Utility-owned assets: Utilities own the systems for at least five years, with potential ownership transfer to households. Utilities may sell generated power under PPAs or provide roof rent. Consumer-owned assets: Households own the systems from commissioning, contributing up to 10% of the benchmark cost, while utilities manage installations via competitive bidding. CFA eligibility and rules: Systems up to 3 kW capacity are eligible for CFA under ULA proposals. Additional technologies like battery storage are excluded. Installation data must be reported hourly, integrating with the national portal. Proposals from states or union territories must include detailed budgets, clearances, and business models. Payment security mechanism: RESCO vendors must contribute Rs 2,000 per installation to the payment security corpus. States must guarantee timely payment settlements to RESCO developers. Delayed payments incur interest at SBI's marginal cost of funds lending rate (MCLR) plus 5%, increasing incrementally with a cap of 3% above the base rate. Approved on February 29, 2024, the PM Surya Ghar program aims to install rooftop solar systems in 10 million households by March 2027. As of November 21, 2024, 616,019 installations have been completed. The guidelines include provisions for automated billing, consumer consent requirements, and penalties for non-compliance. Amendments and clarifications may be issued to address implementation challenges, ensuring the program’s smooth operation. (Mercom)

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