The Ministry of New and Renewable Energy (MNRE) has recently been looking for suggestions on draft guidelines under the PM-Surya Ghar Muft Bijli Yojana, focusing on a Payment Security Mechanism (PSM) to promote solar rooftop installations.

This mechanism is designed for timely payments to developers and reduces financial risks. The last date for suggestions and comments will be September 17th, 2024.

The draft guidelines for implementing the proposed mechanism include two models:  RESCO (Renewable Energy Service Company) and ULA (Utility-Led Aggregation) model. A ₹75,021 crore solar scheme was approved by the government in February 2024, targeted to reach 10 million families in India by FY 2026-27. 

In the RESCO model, the consumer does not have to pay for the rooftop solar system initially or own it for at least five years. Instead of this a RESCO operator buys, installs, and maintains the system. The consumer has to pay only for the electricity generated, like a normal electricity bill.

Sometimes, the consumer might also get paid for allowing the company to use their rooftop. After five years, the ownership of the solar system can either be transferred to the consumer or the RESCO can continue selling the electricity to the grid through a deal with the power company (DISCOM).

ULA models are plans where the electricity distribution company (DISCOM) or the state government helps set up rooftop solar systems for homes. In this model, the solar system is not owned by the homeowner for at least five years. After that period, ownership might be transferred to the homeowner. 

Non-residential sectors like government buildings and commercial properties cannot receive financial help (CFA) under this scheme. However, creative solutions like Net Metering are allowed, which lets households get credit for the extra electricity they generate. Also, only solar panels made in India can be used.

The guidelines also require that RESCO operators using the ULA model pay a one-time fee of ₹2,000 for each installation to the PSM fund.

These rules are part of the larger PM-Surya Ghar Muft Bijli Yojana, which aims to help homes produce their electricity using solar power and achieve the target of 500 GW of non-fossil power by 2030.

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