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Solar Rooftop Subsidy 2024 - A 360° View

Pradhan Mantri Suryoday Yojana was announced by PM Modi to extend solar energy access to households nationwide. On February 13th, Prime Minister Narendra Modi announced the renaming of the government's updated rooftop solar scheme to 'PM Surya Ghar: Muft Bijli Yojana'.Aimed at providing up to 300 units of free electricity every month to 1 crore households, this initiative with an investment of over ₹75,000 crores, aims to promote the widespread adoption of solar power. Through subsidies provided for eligible solar projects, more individuals will have the opportunity to install solar rooftop systems on their own homes, subsequently decreasing their electricity expenses. Solar Rooftop Subsidy 2024 Benefits to HomeownersA solar subsidy is a financial incentive the government provides to individuals or organisations to encourage the adoption of solar energy by making it more affordable and accessible to a wider range of people, businesses, and communities. By offsetting some of the initial investment required for installing solar panels, subsidies help more people to switch from traditional coal-based to renewable energy. Central Financial Assistance (CFA) Under PM Surya Ghar Muft Bijli YojnaUnder the 'PM Surya Ghar: Muft Bijli Yojana', the government is offering substantial subsidies to incentivize the adoption of solar energy. For systems up to 2 kW, a generous subsidy of Rs. 30,000 per kilowatt (kW) is provided, while additional capacity up to 3 kW is eligible for a subsidy of Rs. 18,000 per kW. Even for larger systems exceeding 3 kW, the total subsidy is capped at a considerable Rs. 78,000. These increased subsidy rates make it more accessible for homeowners to invest in renewable energy solutions, paving the way for a cleaner and more sustainable future.The following table illustrates the subsidy amounts for various KW solar installations:Average Monthly Electricity Consumption (units)Suitable Rooftop Solar Plant Capacity Subsidy Support 0-1501 – 2 kW Rs 30,000 to Rs 60,000/150-3002 – 3 kWRs 60,000 to Rs 78,000/>300Above 3 kW Rs 78,000/-  Solar System CapacityPrevious Subsidy 2024Revised Subsidy 20241kW -  2kW₹18,000/kW Per kW₹20,000/kW upto 2kW2kW - 3kW₹18,000/kW Per kW₹20,000/kW For 2kW and Rs.18000/kW for 1kW additionalAbove 3kW to 10kWRs. 18,000/- per kW for first 3 kWRs. 9,000/- per kW for remaining capacityRs.78000 FixedAbove 10kWRs. 117000 - FixedRs.78000 Fixed Illustrated Central Govt. Solar Subsidy CalculationMoney saved is money earned. Below, we've demonstrated how to calculate the subsidy available to residential consumers across India, excluding the Northeast and Hilly States/Union Territories. For those regions, please consult the subsidy amounts provided earlier.Rooftop Solar System CapacityPrevious Available Subsidy - All StatesRevised Available Subsidy 2024 - All States  1 kW Solar SystemRs.18000/- X 1 = Rs.18000/-Rs.30000/- X 1 = Rs.30000/-2 kW Solar SystemRs.18000/- X 2 = Rs.36000/-Rs.30000/- X 2 = Rs.60000/-3 kW Solar systemRs.18000/- X 3 = Rs. 54000/-Rs.30000/- X 2 + Rs.18000/- x 1 = Rs.78000/-4 kW Solar SystemRs.18000/- X 3 + Rs.9000/- X 1 = Rs. 63000/-Rs.78000 Fixed5 kW Solar SystemRs.18000/- X 3 + Rs.9000/- X 2 = Rs. 72000/-Rs.78000 Fixed Where To Apply for Solar Rooftop Subsidy?Anyone living in any part of India can use the National Portal ( https://pmsuryaghar.gov.in ) to apply for a Rooftop Solar System installation under PM Surya Ghar Muft Bijli Yojna and receive financial support directly in their bank account. The portal also gives information about subsidy programs, rewards, and other advantages available under this scheme. This makes it more convenient for households to apply for and get the subsidy they are eligible for.Eligibility Criteria For Availing Solar Subsidy To qualify for participation in the PM – Surya Ghar: Muft Bijli Yojana in 2024, individuals must satisfy the following conditions:Hold permanent citizenship of India.Attain the age of 18 or above.Own a residential property.A valid electricity connection is mandatory for the household.Householders must possess the required documentation.Maintain an annual income not exceeding Rs 1 or 1.5 lakh.Aadhaar linked to bank accounts is highly mandatory.The household must not have previously received any other subsidies for solar panels.Documents Required to Apply For Solar Subsidy On National PortalThe essential documentation needed for eligible residents of the country to complete the online registration for the Solar Rooftop Scheme includes:Aadhar cardProof of addressIdentification cardHousehold ration card (if applicable)Income certificateBank passbookMobile numberPassport-sized photographUtility bill for energy consumptionSimplified Steps to Apply For Subsidy On National PortalNow, individuals residing anywhere in India have the opportunity to utilize the  PM  Surya Ghar Muft Bijli Yojana, National Portal to request the installation of a Rooftop Solar System and directly receive financial assistance deposited into their bank accounts. The portal also provides information on subsidy programs, incentives, and other benefits offered under this initiative, simplifying the process for households to apply for and obtain the subsidy they qualify for.Here's a step-by-step procedure guide:Register on the portal by providing the required information.Choose your State and Electricity Distribution Company.Input your Electricity Consumer Number, Mobile Number, and Email.Log in using your Consumer Number and Mobile Number, and complete the Rooftop Solar application form.The Distribution Company (DISCOM) will carry out a technical feasibility assessment within the upcoming 15-day period.Upon receiving feasibility approval, engage any of the registered vendors within your DISCOM to install the system.After installation, submit the plant details and apply for a net meter. The request will be forwarded to the DISCOM.Following an inspection of the plant to ensure compliance with all guidelines, a commissioning certificate will be issued.Once the net meter is installed and inspected by the DISCOM, a commissioning certificate will be generated through the portal.Upon receiving the commissioning report, submit your bank account details along with a cancelled cheque via the portal.Your subsidy will be deposited into your bank account within 30 days. Net Metering Benefits And Working In the solar net-metering system, consumers are billed based on the disparity between the energy they import and the energy they export. For instance, if a consumer imports 1000 kWh during the billing period of June but exports 700 kWh within the same timeframe, they will only be charged for 300 kWh. Similarly, if the energy imported in the following month, July, amounts to 700 kWh, with an export of 500 kWh once again, the surplus 200 kWh will be rolled over to the subsequent month's billing cycle and adjusted accordingly.Also Read : How to Install a Solar Panel at Home step by step?How is Bluebird Solar Contributing To This GoalMr. Akshay Mittal believes that the PM Surya Ghar Muft Bijli Yojana is a commendable initiative by the government of India towards achieving energy independence. This scheme holds immense potential in revolutionizing the energy landscape of our country by promoting the adoption of solar power in households. As a trusted brand and a solar PV module manufacturer committed to innovation and sustainability, Bluebird Solar can contribute to this initiative by providing high quality and durable solar PV modules. Bluebird Solar is poised to revolutionize the solar energy landscape by offering an extensive array of half-cut Solar PV Modules spanning from 400W to 550W in both mono and Bi-Facial categories. Additionally, with the imminent release of their N-Type Topcon solar PV modules, boasting an impressive range of 580 to 650Wp, Bluebird Solar aims to provide customers with cutting-edge technology and enhanced efficiency, empowering individuals and businesses to harness the full potential of solar energy for their needs.

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Solar energy has been a beacon of hope in India’s pursuit of sustainable development. With vast solar potential due to its geographic location, India has been making significant strides in harnessing solar power to meet its energy demands. Over the years, the cost of solar modules, the essential components of solar panels, has largely decreased, making solar energy more accessible to a broader segment of the population. However, recent trends have shown a reversal in this trend, with solar module prices rising in India. This article delves deeply into the reasons behind this price hike, examining the various factors contributing to this development.

1. Global Supply Chain Disruptions

One of the primary reasons for the increase in solar module prices is the disruption in the global supply chain. The COVID-19 pandemic significantly impacted global trade and logistics, leading to delays and shortages in the supply of essential raw materials used in solar module manufacturing. Even as the world began to recover from the pandemic, supply chain issues persisted, exacerbated by geopolitical tensions, trade restrictions, and logistical challenges.

• Raw Material Shortages: Solar modules rely heavily on specific raw materials, such as polysilicon, silver, aluminum, and copper. Polysilicon, a key ingredient in solar cells, has seen significant price increases due to production bottlenecks and rising demand. The production of polysilicon is concentrated in a few countries, and any disruption in their output, whether due to natural disasters, industrial accidents, or political issues, can lead to shortages and drive up prices.
• Shipping and Logistics Costs: The cost of shipping has surged globally, driven by a combination of factors including container shortages, port congestion, and increased fuel prices. For a country like India, which imports a significant portion of its solar modules and raw materials, these increased shipping costs translate directly into higher prices for solar modules.
• Geopolitical Tensions: Trade tensions between major economies, such as the United States and China, have led to the imposition of tariffs and trade barriers on solar components. Although India has been ramping up its domestic manufacturing capabilities, it still relies on imports for critical components. These trade tensions have caused fluctuations in prices, as manufacturers and suppliers navigate the complexities of tariffs and trade restrictions.

2. Increasing Cost of Raw Materials

The rising cost of raw materials is another significant factor contributing to the increase in solar module prices. As demand for solar energy grows worldwide, the demand for the materials required to produce solar modules has also risen sharply. This surge in demand, coupled with limited supply and production constraints, has led to a spike in the prices of key raw materials.

• Polysilicon Prices: Polysilicon is the most critical material used in the manufacturing of solar cells. Over the past few years, the price of polysilicon has seen dramatic increases due to supply chain disruptions and production bottlenecks. In some cases, the price of polysilicon has more than doubled, significantly impacting the overall cost of solar modules.
• Aluminum and Copper: Solar modules also require significant amounts of aluminum for frames and copper for wiring. The prices of these metals have been rising due to increased demand across various industries, including renewable energy, automotive, and electronics. Additionally, mining disruptions and environmental regulations have constrained the supply of these metals, further pushing up prices.
• Silver Prices: Silver is another crucial component used in the production of solar cells. The price of silver has been on the rise due to its use in various high-tech applications, including electronics and electric vehicles. As the demand for these applications grows, the cost of silver is expected to continue rising, contributing to the overall increase in solar module prices.

3. Domestic Manufacturing Challenges

India has been making concerted efforts to boost its domestic solar manufacturing capabilities through initiatives such as the Production Linked Incentive (PLI) scheme. While these efforts are commendable and have the potential to reduce the country’s dependence on imports, the domestic solar manufacturing sector still faces several challenges that contribute to higher module prices.

• High Initial Costs: Setting up solar module manufacturing facilities requires significant capital investment in machinery, technology, and skilled labor. These high initial costs are often passed on to consumers in the form of higher prices, especially during the early stages of production when economies of scale have not yet been achieved.
• Limited Scale of Production: Despite the government’s push for domestic manufacturing, India’s solar manufacturing sector is still in its nascent stages and lacks the scale needed to compete with established global players. Limited production capacity means that domestic manufacturers cannot fully meet the country’s growing demand for solar modules, leading to reliance on imports and higher prices.
• Quality Control and Standards: Ensuring high-quality standards in domestic solar module production is crucial for long-term performance and durability. However, maintaining these standards can increase production costs, especially in the early stages of manufacturing when processes are still being optimized. This can result in higher prices for domestically produced modules.

4. Government Policies and Tariffs

Government policies play a crucial role in shaping the solar energy market in India. While many policies aim to support the growth of the sector, certain measures, such as tariffs and import duties, can also lead to higher solar module prices.

• Import Duties on Solar Modules: To encourage domestic manufacturing and reduce dependence on imports, the Indian government has imposed import duties on solar modules and cells. While this policy supports the growth of domestic manufacturing, it also raises the cost of imported modules, which are still a significant portion of the market. As a result, consumers may face higher prices in the short term until domestic production can scale up to meet demand.
• Safeguard Duties: The government has also implemented safeguard duties on solar imports to protect domestic manufacturers from cheap imports. While this policy aims to level the playing field for local producers, it has also led to an increase in the cost of imported solar modules, contributing to the overall rise in prices.
• Goods and Services Tax (GST): The introduction of the Goods and Services Tax (GST) in India has also had an impact on solar module prices. The GST rate for solar components has been a point of contention, with different rates applied to different components, leading to confusion and increased costs for manufacturers and consumers alike.

5. Rising Demand and Market Dynamics

The solar energy market in India is growing rapidly, driven by ambitious government targets, increasing awareness of environmental issues, and rising energy demand. However, this rapid growth has also led to increased competition for solar modules, driving up prices.

• Surging Demand for Solar Energy: India has set ambitious targets for solar energy capacity, aiming to achieve 280 GW by 2030. This has led to a surge in demand for solar modules, both from large-scale utility projects and smaller residential and commercial installations. As demand outstrips supply, prices naturally rise, especially in a market where supply chain constraints and production challenges are already present.
• Market Competition: The rapid growth of the solar energy market has attracted numerous players, both domestic and international. While competition can drive innovation and efficiency, it can also lead to price increases as manufacturers compete for limited resources and market share. Additionally, smaller manufacturers may struggle to compete with larger, established players, leading to price disparities across the market.

6. Currency Fluctuations and Economic Factors

India’s solar energy sector is also influenced by broader economic factors, including currency fluctuations, inflation, and global economic conditions. These factors can have a significant impact on solar module prices.

• Currency Exchange Rates: The Indian solar industry relies heavily on imports for raw materials and finished solar modules. Currency fluctuations, particularly the depreciation of the Indian rupee against major currencies like the US dollar, can make imports more expensive, leading to higher prices for solar modules.
• Inflation: Rising inflation rates can increase the cost of raw materials, labor, and other inputs used in solar module manufacturing. As these costs rise, manufacturers may pass them on to consumers in the form of higher prices.
• Global Economic Conditions: Global economic conditions, including recessions, trade wars, and shifts in commodity prices, can also impact the cost of solar modules. For example, a global economic downturn may lead to reduced demand for certain materials, while trade wars can disrupt supply chains and increase costs.

7. Environmental Regulations and Compliance Costs

As the solar energy industry grows, it must also navigate increasingly stringent environmental regulations and compliance requirements. While these regulations are essential for ensuring sustainable and responsible growth, they can also contribute to higher costs for solar modules.

• Environmental Compliance Costs: Solar pv module manufacturers in india must comply with various environmental regulations, including waste management, emissions controls, and resource conservation. These compliance costs can add to the overall cost of production, particularly for smaller manufacturers who may lack the resources to invest in advanced environmental technologies.
• Sustainable Sourcing: As demand for renewable energy grows, there is increasing pressure on manufacturers to source raw materials sustainably. This includes ensuring that materials like polysilicon and metals are mined and processed in environmentally and socially responsible ways. While this is a positive development, it can also lead to higher costs for materials, which are then passed on to consumers.

8. Technological Advancements and Innovation Costs

While technological advancements are typically associated with cost reductions, they can also lead to higher prices, particularly in the short term. The introduction of new technologies and innovations in solar module manufacturing often comes with additional costs.

• Research and Development Costs: Developing new technologies requires significant investment in research and development (R&D). These costs are often recouped by manufacturers through higher prices for new, cutting-edge products. While these innovations may offer improved performance and efficiency, they can also contribute to higher overall module prices.
• Transition to New Technologies: As manufacturers transition to new technologies, such as bifacial modules, PERC cells, or perovskite solar cells, there may be an initial increase in production costs. These costs are typically higher during the early stages.