PM Surya Ghar scheme: Balance consumer equity with discom stability

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₹78,000. The intent and messaging of the scheme’s ‘300 free units’ is clear. The government aims to address energy equity, with the dual benefits of boosting household incomes and promoting energy security.

The targeting of these specific consumers is also a strategic move from the perspective of discoms. These households typically fall in the lower tariff slab and are often cross-subsidized by higher-paying commercial and industrial (C&I) consumers. The theory and intent are clear.

However, it remains to be seen whether the enhanced capital subsidy will sufficiently attract the intended beneficiaries. Major hurdles include limited rooftop space among these consumers and the fact that they already receive subsidized or even free power in some states, thereby limiting their motivation to make the capital expenditure, even with subsidies and government-supported loans. Having built detailed models on stakeholders, incentives and costs as well as benefits, our initial findings indicate that there is a notable disparity in the payback period for different consumers, depending on their rooftop solar size and annual electricity consumption.

For instance, a consumer with a 1kW peak capacity system consuming approximately 1,000kilowatt-hours (kWh) electricity annually would need nearly 10 years to recoup the investment. In contrast, an 8kW rooftop solar consumer—ostensibly a richer person—consuming around 6,000kWh annually would see a payback in just six years. The payback period could be even longer for systems smaller than 1kW, which are common in low-income households.