Executive Summary:
The Ministry of New and Renewable Energy (MNRE) issued operational guidelines on 28.12.2024 for the Payment Security Mechanism (PSM) and Central Financial Assistance (CFA) components of the PM Surya Ghar: Muft Bijli Yojana (PMSGMBY) for RESCO and ULA models. The scheme aims to support rooftop solar development, particularly for low-income households, and includes a Rs 100 crore PSM corpus for ensuring timely payments to RESCO developers. The document outlines measures taken to promote green energy accessibility and renewable energy targets in the solar sector.
Key Points / Main Content:
Payment Security Mechanism (PSM) and Central Financial Assistance (CFA) for RESCO/ULA Models:
* Operational Guidelines: MNRE issued guidelines on 28.12.2024 for PSM and CFA components under PMSGMBY.
* Objective: To support rooftop solar development via RESCO and ULA models, focusing on low-income households.
* Payment Security Mechanism (PSM):
* Corpus: Rs 100 crore for de-risking RESCO investments.
* Purpose: Ensure timely payments to RESCO developers.
* Access: ULA proposals from State/UT governments can access PSM.
* PSM Fee: ULA selected RESCO developers contribute Rs 2000/installation to the PSM corpus.
* State-Level PSM: Madhya Pradesh and Haryana have their own PSMs.
* ULA Model Approvals: In-principle approval granted to 7 States/UTs: Andhra Pradesh, Odisha, Jammu & Kashmir, Assam, Kerala, Andaman & Nicobar Islands, and Ladakh.
* Total Rooftop Solar Installations Approved: 10,12,368
* Beneficiaries Identified: Dadra Nagar Haveli and Daman Diu identified 5,000 beneficiaries under the ULA model, primarily from PMAYG category.
Measures to Promote Rooftop Solar Adoption:
* Online process: Streamlined process from registration to subsidy disbursal via a National Portal.
* Collateral-free loans: Available from nationalized banks at concessional interest rates.
* Simplified regulations: Waiving technical feasibility and auto load enhancement up to 10 kW.
* Vendor registration: Simplified to ensure sufficient qualified vendors.
* Capacity building: Training programs for skilled manpower.
* Awareness campaigns: Print, TV, and radio advertising.
* Monitoring: Regular monitoring at different levels.
* Grievance redressal: Mechanism established for timely resolution.
* Call Centre: Operational in 12 languages (15555).
Green Energy Promotion Measures:
* Bidding Trajectory: MNRE issued bidding trajectory for RE power procurement bids of 50 GW/annum by REIAs from FY 2023-24 to FY 2027-28.
* Foreign Direct Investment (FDI): Permitted up to 100% under the automatic route.
* ISTS charges: Waiver for RE projects.
* Renewable Consumption Obligation (RCO): Trajectory notified till 2029-30.
* Standard Bidding Guidelines: Issued for tariff-based competitive bidding for various RE projects.
* Schemes Launched: PM KUSUM, PM Surya Ghar Muft Bijli Yojana, National Programme on High Efficiency Solar PV Modules, New Solar Power Scheme for Tribal and PVTG Habitations/Villages under PM JANMAN and DA JGUA, National Green Hydrogen Mission, and VGF Scheme for Offshore Wind Energy Projects.
* Solar Parks: Scheme for setting up Solar Parks and Ultra Mega Solar Power projects.
* Green Energy Corridor: Funding for new transmission lines and substations.
* Offshore Wind Energy: Strategy issued indicating a bidding trajectory of 37 GW by 2030.
* Offshore Wind Energy Lease Rules, 2023: Notified to regulate lease grants for offshore wind projects.
* Transmission Plan: Prepared till 2030 to augment transmission infrastructure.
* Green Energy Open Access Rules, 2022: Notified to ensure access to affordable, reliable, and sustainable green energy.
* Green Term Ahead Market (GTAM): Launched to facilitate sale of Renewable Energy Power through exchanges.
Impact Analysis:
DISCOMs/State Governments/State Designated Entities:
* Impact: Can support rooftop solar development under RESCO and ULA models for low-income households through CFA.
* Action Required: Develop and submit ULA proposals to access the Payment Security Mechanism.
RESCO Developers:
* Impact: Protected from payment delays via the Payment Security Mechanism.
* Action Required: Contribute a one-time PSM fee of Rs 2000/installation under the ULA model.
Low-Income Households/Families:
* Impact: Benefit from increased access to affordable rooftop solar energy.
* Action Required: Participate in the PMSGMBY scheme through RESCO or ULA models.
States of Maharashtra and Madhya Pradesh:
* Impact: Encouraged to adopt RESCO and ULA models for rooftop solar development.
* Action Required: Develop and submit proposals under the RESCO and ULA models.
Union Territory of Dadra Nagar Haveli and Daman Diu:
* Impact: Identified beneficiaries under the ULA model.
* Action Required: Facilitate implementation of rooftop solar installations for identified beneficiaries.
Key Entities Referenced
Pradhan Mantri Surya Ghar Muft Bijli Yojana (PMSGMBY): A government scheme to promote rooftop solar power generation.
Renewable Energy Service Company (RESCO): A business model for renewable energy project development and implementation.
Utility Led Aggregation (ULA): A model for aggregating demand and facilitating renewable energy projects.
Maharashtra: A state in India where the status of the PMSGMBY scheme is being assessed.
Madhya Pradesh: A state in India where the status of the PMSGMBY scheme is being assessed.
Dadra and Nagar Haveli and Daman and Diu: A Union Territory in India where beneficiaries have been identified under the ULA model.
Ministry of New and Renewable Energy (MNRE): The Indian government ministry responsible for renewable energy development.
Payment Security Mechanism (PSM): A financial mechanism to de-risk investments in RESCO-based rooftop solar projects by ensuring timely payments to developers.
GOVERNMENT OF INDIA
MINISTRY OF NEW AND RENEWABLE ENERGY
LOK SABHA
STARRED QUESTION NO. 385
ANSWERED ON 20/08/2025
PAYMENT SECURITY MECHANISM COMPONENT OF PM-SGMBY
*385. SMT. DELKAR KALABEN MOHANBHAI
SHRI NILESH DNYANDEV LANKE
Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:
(a) whether the Government has prepared any operational guidelines for implementation of
payment security mechanism and central financial assistance component for Renewable
Energy Service Company (RESCO) Models/Utility Led Aggregation Models under Pradhan
Mantri-Surya Ghar Muft Bijli Yojana (PM-SGMBY);
(b) if so, the details thereof including the status in Maharashtra and Madhya Pradesh;
(c) the details of the number of households identified under the said models in the Union
Territory of Dadra and Nagar Haveli and States of Maharashtra and Madhya Pradesh; and
(d) whether any steps have been taken to make green energy accessible to all and to promote
renewable energy targets in the solar energy sector in the said Union Territory and States and
if so, the details thereof?
ANSWER
THE MINISTER OF NEW & RENEWABLE ENERGY AND CONSUMER AFFAIRS,
& FOOD AND PUBLIC DISTRIBUTION
(SHRI PRALHAD JOSHI)
(a) to (d) A statement is laid on the table of the House.
*****STATEMENT
Statement referred to in reply of parts (a) to (d) of the Lok Sabha Starred Question No.
385 to be answered on 20.08.2025 regarding Payment Security Mechanism Component
of PM-SGMBY
(a) to (c): The Ministry of New and Renewable Energy (MNRE) has issued Operational
Guidelines for implementation of the “Payment Security Mechanism” Component and the
“Central Financial Assistance (CFA)” Component for RESCO Models /Utility Led
Aggregation (ULA) Models under the PM Surya Ghar: Muft Bijli Yojana (PMSG: MBY) on
28.12.2024.
The objective of CFA component for RESCO Models / ULA Models is to enable DISCOMs/
State Governments/ State Designated entities to support rooftop solar development under
RESCO and ULA models, primarily for low-income households/ families.
Further, the scheme has also a separate component for Payment Security Mechanism (PSM)
with a corpus of Rs 100 crore for de-risking investments in RESCO based models in rooftop
solar. The utilization of the payment security fund is to be done for ensuring timely payments
to RESCO developers and to insulate them from delays in settlement of payments from the
DISCOMs/contracting party. ULA proposals from State/UT governments can access this PSM
in order to provide payment security for projects in which RESCO developers have been
contracted with, through an open transparent bidding process for tariff discovery. Under this
arrangement, the ULA selected RESCO developers shall contribute to the PSM Corpus through
a one-time PSM fee of Rs 2000/installation to be undertaken by it under the ULA.
In addition to PSM available under the PMSG: MBY, few states such as Madhya Pradesh and
Haryana have also set up their own Payment security mechanisms, to further safeguard the
interests of RESCO developers.
Under the ULA model of the PMSG: MBY, the MNRE has accorded in-principle approval to
7 States/UTs i.e. Andhra Pradesh, Odisha, Jammu & Kashmir, Assam, Kerala, Andaman &
Nicobar Islands and Ladakh. The State/UT wise details are as follows:-
S. State/UT No of rooftop
No. solar
installations
1 Andhra Pradesh 3,88,571
2 Odisha 1,50,000
3 Assam 1,79,229
4 Kerala 50,000
5 Jammu & Kashmir 2,22,568
6 Andaman & 15,000
Nicobar Islands7 Ladakh 7,000
Total 10,12,368
While proposals are yet to receive under the RESCO and ULA models from the States of
Maharashtra and Madhya Pradesh, the UT of Dadra & Nagar Haveli and Daman & Diu has
identified 5,000 beneficiaries (4,850 in Dadra & Nagar Haveli and 150 in Daman & Diu) under
the ULA model, primarily from the Pradhan Mantri Awas Yojana–Gramin (PMAY-G)
category, with a focus on supporting economically weaker sections.
(d) The Government has taken following measures to promote rooftop solar adoption under
the PMSG: MBY:
● Online process from registration to disbursal of subsidy directly in to the bank
account of the residential consumer through National Portal.
● Availability of collateral free loan from nationalized banks at concessional interest
rate of repo-rate plus 50 bps i.e. 6% per annum for the present with tenure of 10 years.
● Simplified the regulatory approval process by waiving technical feasibility
requirement and introducing auto load enhancement upto 10 kW.
● Simplified process for registration of vendors to ensure sufficient and qualified
vendors are available.
● Capacity building and training programmes being conducted for creating skilled
manpower.
● Creating awareness about the scheme, through awareness and outreach program such
as print advertising in leading newspapers, TV commercials campaigns, Radio
campaigns across FM stations including regional channels, etc., in the country
● Regular monitoring of the progress of the scheme at different levels including with
states/DISCOMs.
Established grievance redressal mechanism for timely resolution of grievances. A Call Centre
with telephone number 15555 is operational in 12 languages.
Further, the Government of India has taken several steps to make green energy accessible to
all and to promote renewable energy targets in the solar energy sector in the country including
in the states of Maharashtra and Madhya Pradesh and the UT of Dadra & Nagar Haveli and
Daman & Diu. Details of these steps are given in Annexure.
*****Annexure referred to in reply of part (d) of the Lok Sabha Starred Question No. 385 to
be answered on 20.08.2025 regarding Payment Security Mechanism Component of PM-
SGMBY
Major steps to make green energy accessible to all and to promote renewable energy targets
in the solar energy sector in the country are as follows:
● MNRE has issued Bidding Trajectory for issuance of RE power procurement bids of
50 GW/annum by Renewable Energy Implementing Agencies (REIAs) [REIAs: Solar
Energy Corporation of India Limited (SECI, NTPC Limited, NHPC Limited, SJVN
Limited) from FY 2023-24 to FY 2027-28.
● Foreign Direct Investment (FDI) has been permitted up to 100 percent under the
automatic route.
● Waiver of Inter State Transmission System (ISTS) charges for RE projects.
● Renewable Consumption Obligation (RCO) trajectory has been notified till 2029-30.
● Standard Bidding Guidelines for tariff based competitive bidding process for
procurement of Power from Grid Connected Solar, Wind, Wind-Solar Hybrid and
Firm & Dispatchable RE (FDRE) projects have been issued.
● Schemes such as Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan
(PM KUSUM), PM Surya Ghar Muft Bijli Yojana, National Programme on High
Efficiency Solar PV Modules, New Solar Power Scheme (for Tribal and PVTG
Habitations/Villages) under Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan
(PM JANMAN) and Dharti Aabha Janjatiya Gram Utkarsh Abhiyan (DA JGUA),
National Green Hydrogen Mission, Viability Gap Funding (VGF) Scheme for
Offshore Wind Energy Projects have been launched.
● Scheme for setting up of Solar Parks and Ultra Mega Solar Power projects is being
implemented to provide land and transmission to RE developers for installation of RE
projects at large scale.
● Laying of new transmission lines and creating new sub-station capacity has been
funded under the Green Energy Corridor Scheme for evacuation of renewable power.
● “Strategy for Establishments of Offshore Wind Energy Projects” has been issued
indicating a bidding trajectory of 37 GW by 2030 and various business models for
project development.
● The Offshore Wind Energy Lease Rules, 2023 have been notified vide Ministry of
External Affairs notification dated 19th December 2023, to regulate the grant of lease
of offshore areas for development of offshore wind energy projects.
● To augment transmission infrastructure needed for steep RE trajectory, transmission
plan has been prepared till 2030.
● Electricity (Promoting Renewable Energy Through Green Energy Open Access)
Rules, 2022, has been notified on 06th June 2022 with objective of ensuring access to
affordable, reliable, and sustainable green energy for all.
● Green Term Ahead Market (GTAM) has been launched to facilitate sale of Renewable
Energy Power through exchanges.
*****