Flagship Schemes on Solarisation
Context:
Indian States currently spend an estimated ₹2.4 lakh crore annually to subsidise electricity for domestic and agricultural consumers.
To counter this massive fiscal drain, the Ministry of New and Renewable Energy (MNRE) is strategically repositioning its flagship solarisation schemes—PM KUSUM (for agricultural feeders) and PM Surya Ghar (for household rooftops)—not merely as green energy initiatives, but as vital fiscal instruments designed to eventually wipe off state subsidy bills.
State of India's Renewable Energy:
As of March 2026, India's total installed power capacity stands at 535 GW.
Non-fossil energy sources account for 54% of this total.
Solar energy is the single largest non-fossil energy source in the country, contributing approximately 150 GW to the national power grid.
Policy Mechanisms and Models:
ALMM (Approved List of Models and Manufacturers):
Introduced in 2019, ALMM is the Centre's primary policy tool for fostering a domestic solar manufacturing base.
It mandates that all Union government-backed solar projects (including PM KUSUM and PM Surya Ghar) must use only MNRE-approved domestic equipment.
Major challenge: domestic equipment is currently more expensive than imports from China and Vietnam, and domestic vendors frequently face supply shortages.
The Maharashtra Exemption:
Maharashtra recently bypassed the ALMM mandate, allowing it to use cheaper Chinese solar cells for its farm solarisation tender.
This exemption was granted because the State structured its tender under its own State-run scheme, issued before a crucial cut-off date of December 9, 2024.
Other states without such legacy tenders do not qualify for this exemption.
Utility-Led Aggregation (ULA):
PM Surya Ghar's conventional demand-driven model successfully covered 35 lakh households but hit a structural limitation:
Poor and lower-middle-class households receiving heavily subsidised or near-free electricity had no incentive to adopt rooftop solar.
To resolve this, the ULA model was introduced.
Under ULA, the utility (DISCOM) directly installs rooftop solar via its own capital expenditure or a RESCO (renewable energy service company) contractor.
This ensures the consumer pays nothing upfront, while the utility slowly offsets its long-term subsidy burden.