Tuesday, February 18th, 2025

PM Surya Ghar free electricity scheme will open opportunities worth Rs 1.2 trillion in power sector


According to a report by SBI Capital Markets, PM Surya Ghar Muft Bijli Yojana (PM-SGMBY) is expected to create a huge opportunity worth Rs 1.2 trillion in India’s solar power sector.

The scheme, which focuses on promoting residential rooftop solar installations, aims to achieve an ambitious target of 30 GW capacity, the report said. It provides substantial capital cost subsidy, reducing the payback period to 4-5 years and encouraging greater adoption of solar energy.

It said, “The scheme has the potential to catalyze Rs. ₹1.2 trillion ecosystem with manufacturers of essential components including modules, inverters, mounting equipment and electrical components, along with project developers and EPC players, expected to be the primary beneficiaries.

It also said that the ecosystem powered by the scheme is set to benefit key players, including manufacturers of essential components such as solar modules, inverters, mounting structures and electrical components.

Of the Rs 1.2 trillion opportunity, solar modules have the largest share at Rs 480 billion, followed by inverters at Rs 275 billion, electrical components at Rs 200 billion and mounting structures at Rs 90 billion.

The scheme is also beneficial for project developers and EPC players who are leveraging the capex model to avail subsidies, where customers finance and own the installations.

The report also said that residential rooftop installation is expected to overtake other sectors due to strong policy support, especially in states with high residential electricity rates and favorable net metering policies. Non-utility solar segments including residential and commercial and industrial (C&I) are also gaining momentum due to declining costs of modules and EPC services.

With off-grid opportunities expanding with cheaper solar cells, the annual growth of non-utility solar installations is projected to reach about 20 GW by FY27.

Currently, five states account for 70 percent of India’s solar rooftop capacity. Gujarat leads with 4,822 MW, followed by Maharashtra (2,847 MW), Rajasthan (1,415 MW), Kerala (966 MW), and Tamil Nadu (876 MW).

The growth of solar energy adoption is linked to factors such as industrialization, tariff differentials, state-level incentives and metering policies.

As residential installations are on the rise, the report highlights that PM-SGMBY is poised to play a key role in democratizing green energy and promoting India’s renewable energy goals.



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