The Ministry of New and Renewable Energy has unveiled draft guidelines for central financial support and payment security under the RESCO and utility-led models for rooftop solar systems. In the RESCO model, a renewable energy company installs and maintains the system for five years without upfront costs to the consumer. The consumer pays only for the electricity generated, and after the company's investment is recovered, the system becomes the consumer's property, making electricity nearly free. Alternatively, RESCO operators may sell power to the grid. In the utility-led model, state distribution companies own the systems for five years before transferring ownership to households.
The Ministry of New and Renewable Energy recently released draft guidelines for central financial support and payment security mechanisms under the Renewable Energy Services Company (RESCO) model and the utility-led demand aggregation model for the new rooftop solar program.
Under the RESCO model, a renewable energy company will purchase, install, and maintain a rooftop solar system for a consumer for a minimum of five years. The consumer does not need to make an upfront payment; instead, the renewable energy company handles the initial financing. The PM Surya Ghar Muft Bijli Yojana has a budget of INR 75,021 crore and is set to be implemented through FY27.
Previously, the scheme issued guidelines for disbursing funds to residential consumers for installations carried out by registered vendors, but these did not cover the RESCO model or utility-led or state-led aggregation models for rooftop solar setups. According to the new draft guidelines, consumers will only need to pay for the electricity generated through a tariff to the RESCO operator. After the operator has recovered their investment, the system becomes the consumer's property, and the ongoing tariff payments are eliminated, making the electricity effectively free.
Ownership of the plant may be transferred to the consumer after a project period of at least five years. Alternatively, the RESCO operator could establish an agreement with the distribution company to sell the generated power to the grid under a power purchase agreement to recover its investment. In the utility-led asset model, a state distribution company (discom) will own the rooftop solar systems for a minimum of five years, after which ownership will be transferred to the household.
The new draft norms from the Ministry of New and Renewable Energy introduce flexible and consumer-friendly approaches to rooftop solar adoption. By leveraging the RESCO and utility-led models, the scheme facilitates easier access to solar technology with minimal upfront costs, promoting long-term energy savings and ownership. With a significant investment from the PM Surya Ghar Muft Bijli Yojana, these measures are set to drive widespread adoption and accelerate the transition to renewable energy, benefiting households and supporting national sustainability goals.
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