Government releases standards for financial assistance and payment security in rooftop solar project – Industry News

The Ministry of New and Renewable Energy has issued operational guidelines for the implementation of payment security mechanism and central financial assistance to residential consumers through the Renewable Energy Service Company (RESCO) model and the utility-led aggregation (ULA) model in the new rooftop solar project. program – PM Surya Ghar Muft Bijli Yojana.

The implementation period of the program will extend until March 31, 2027, the ministry said.

As per the guidelines, to qualify for CFA, the residential rooftop solar plant would be the grid-connected solar power system associated with a particular residential power connection of the local DISCOM and would include only installations on a roof, terrace , a balcony or above an elevated building. structures.

Specialty rooftop solar installations, such as building-integrated photovoltaic (BiPV) systems, will also be considered eligible for CFA support. Additionally, facilities subject to metering mechanisms such as group net metering and virtual net metering will be eligible for CFA if the metering arrangement is approved by the DISCOM.

Central financial assistance for utility-led aggregation (ULA) proposals will be provided to households for which the installed capacity does not exceed 3 KW, the guidelines said.

“The objective of the program component is to establish the implementation mechanism to support installations through RESCO and ULA models for rooftop solar for eligible categories of consumers and to enable DISCOMs and “State governments to support the development of rooftop solar under the RESCO and ULA deployment models,” he said.

In RESCO mode, the system is purchased, installed and maintained by a renewable energy service company for a period of at least 5 years which is also the duration of the project. The consumer does not finance the initial investment in the rooftop solar system and does not own the asset.

The consumer only pays for the electricity consumed from the rooftop solar system on a tariff basis to the operator RESCO. Ownership of the installation may be transferred to the consumer after the project period according to the terms and conditions agreed between the consumer and the RESCO entity. Alternatively, the RESCO can enter into an agreement with the DISCOM for the sale of balance energy, remaining after consumption by the consumer to the grid under a power purchase agreement.

The utility-led asset model includes business models where the DISCOM, the state government or another state-designated entity installs rooftop solar projects on behalf of individual households in the residential sector.

Further, no financial assistance will be provided to non-residential consumer segments including government segment and commercial and industrial segment among others.

“Rooftop solar installation can include additional technology components such as small wind hybrids, battery storage, solar tracking systems, etc. However, the calculation of the CFA should be based on the structure of the CFA under the program based on the capacity of the solar modules installed in the system. » specifies the ministry in its directives.

The guidelines also stated that solar modules used in the installation must meet the domestic content condition (DCR), i.e. modules manufactured domestically from cells manufactured domestically.

“This is an essential condition for the installation to be eligible for the CFA. The use of non-DCR modules in any form in the installation will render the installation ineligible for CFA,” it said.

To qualify for central financial assistance, RESCO will have to submit an original equipment manufacturer (OEM) declaration certifying that the modules used in the installation meet DCR standards.

However, households with a pre-existing rooftop solar system will not be considered eligible under the RESCO and ULA models for the CFA.

In addition to the above, the Ministry of New and Renewable Energy announced a corpus of Rs 100 crore for a payment security mechanism which would be managed and administered by the National Scheme Implementation Agency into a bank account bearing interest.

Proposals for the utility-led aggregation model can access the Payment Security Mechanism (PSM) to provide payment security for projects in which RESCO partners have been contracted, through an open and transparent tender process for price discovery.

“Under this agreement, the RESCO selected by the ULA will contribute to the PSM corpus through a one-time PSM fee of Rs 2,000 per installation to be undertaken by it under the ULA,” the ministry said .

The government launched the PM Surya Ghar: Muft Bijli Yojana in February to increase the share of rooftop solar capacity and enable residential households to generate their own electricity. The scheme represents an outlay of Rs 75,021 crore and is to be implemented up to the financial year 2026-27.

The financial outlay of the project includes central financial assistance to 1 crore residential consumers for rooftop solar installations. In June 2024, the ministry had issued guidelines for release of Central Financial Assistance (CFA) to residential consumers for installations undertaken by them through registered sellers. However, previous guidance did not cover RESCO models or utility/state-led aggregation models.