Executive Summary:
The Ministry of New and Renewable Energy (MNRE) issued operational guidelines on December 28, 2024, for the Payment Security Mechanism (PSM) and Central Financial Assistance (CFA) components under 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. A PSM with a corpus of Rs 100 crore has been established to ensure timely payments to RESCO developers.
Key Points / Main Content:
Payment Security Mechanism (PSM) and Central Financial Assistance (CFA)
* Operational Guidelines issued by MNRE on 28.12.2024 for PSM and CFA components under PMSGMBY.
* Objective: To support rooftop solar development under RESCO and ULA models, primarily for low-income families.
* PSM Corpus: Rs 100 crore to derisk investments in RESCO-based rooftop solar projects.
* Utilization of PSM: Ensures timely payments to RESCO developers, protecting them from payment delays from DISCOMs.
* ULA proposals can access PSM for payment security through open, transparent bidding.
* ULA selected RESCO developers contribute a one-time PSM fee of Rs 2000/installation to the PSM Corpus.
* Madhya Pradesh and Haryana have established their own payment security mechanisms.
ULA Model Approvals and Beneficiaries:
* In-principle approval granted to 7 States/UTs under the ULA model: Andhra Pradesh, Odisha, Jammu & Kashmir, Assam, Kerala, Andaman & Nicobar Islands, and Ladakh (total of 10,12,368 installations).
* Dadra Nagar Haveli and Daman Diu have identified 5,000 beneficiaries under the ULA model, mainly from the PMAYG category.
* Maharashtra and Madhya Pradesh: Proposals under RESCO and ULA models are yet to be received.
Promotion of Rooftop Solar Adoption:
* Online process: Streamlined registration to subsidy disbursal via the National Portal.
* Collateral-free loans: Available from nationalized banks at concessional interest (repo rate + 50 bps, i.e., 6% per annum) for 10 years.
* Simplified regulatory approval: Waiving technical feasibility and auto load enhancement up to 10 kW.
* Simplified vendor registration: To ensure availability of qualified vendors.
* Capacity building: Training programs for skilled manpower.
* Awareness campaigns: Print, TV, Radio campaigns to promote the scheme.
* Regular monitoring: Progress is monitored at different levels, including with states/DISCOMs.
* Grievance redressal mechanism: For timely resolution of issues.
* Call Centre: Operational in 12 languages (telephone number 15555).
Steps to Promote Green Energy:
* MNRE issued bidding trajectory for RE power procurement of 50 GW/annum by REIAs from FY 2023-24 to FY 2027-28.
* 100% FDI permitted under the automatic route.
* Waiver of ISTS charges for RE projects.
* RCO trajectory notified until 2029-30.
* Standard Bidding Guidelines issued for tariff-based competitive bidding for power procurement from various RE projects.
* Various schemes launched: PM KUSUM, PMSGMBY, 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, VGF Scheme for Offshore Wind Energy Projects.
* Scheme for setting up Solar Parks and Ultra Mega Solar Power projects.
* Green Energy Corridor Scheme for funding new transmission lines and substations.
* Strategy for Establishments of Offshore Wind Energy Projects issued (37 GW bidding trajectory by 2030).
* Offshore Wind Energy Lease Rules, 2023 notified.
* Transmission plan prepared until 2030.
* Green Energy Open Access Rules, 2022 notified.
* Green Term Ahead Market (GTAM) launched.
Impact Analysis:
DISCOMs/State Governments/State Designated Entities:
* Impact: Enabled to support rooftop solar development under RESCO and ULA models, especially for low-income households.
* Action Required: Develop and implement ULA proposals, conduct transparent bidding for RESCO developers, and utilize the PSM to ensure timely payments.
RESCO Developers:
* Impact: Investments are derisked through the Payment Security Mechanism, ensuring timely payments.
* Action Required: Participate in open bidding processes for ULA projects, contribute to the PSM Corpus (Rs 2000/installation), and adhere to the guidelines for project implementation.
Low-Income Households/Families:
* Impact: Increased access to affordable solar power through RESCO and ULA models.
* Action Required: Participate in the PMSGMBY scheme and utilize the available subsidies and financial assistance.
States/UTs (Andhra Pradesh, Odisha, Jammu & Kashmir, Assam, Kerala, Andaman & Nicobar Islands, Ladakh, Dadra Nagar Haveli and Daman Diu):
* Impact: Opportunity to increase solar power adoption and reduce dependence on conventional energy sources.
* Action Required: Implement the ULA model, identify beneficiaries, and facilitate the installation of rooftop solar systems.
MNRE:
* Impact: Responsible for the overall implementation and monitoring of the PMSGMBY scheme.
* Action Required: Provide guidance and support to DISCOMs, State Governments, and RESCO developers, monitor the progress of projects, and ensure the effective utilization of the PSM fund.
Key Entities Referenced
Pradhan Mantri Surya Ghar Muft Bijli Yojana (PMSGMBY): A government scheme focused on promoting rooftop solar power generation in households.
Ministry of New and Renewable Energy (MNRE): The central government ministry responsible for renewable energy development in India.
Renewable Energy Service Company (RESCO): A business model where a company installs and maintains renewable energy systems, typically rooftop solar, and sells the electricity generated to consumers.
Utility Led Aggregation (ULA): A model where utilities aggregate demand for rooftop solar and facilitate its deployment.
Central Financial Assistance (CFA): Financial assistance provided by the government to support the implementation of renewable energy projects.
Payment Security Mechanism (PSM): A mechanism to ensure timely payments to renewable energy developers, mitigating the risk of delays in payments from DISCOMs.
Madhya Pradesh: A state in India, mentioned in the context of renewable energy initiatives and payment security mechanisms.
Maharashtra: A state in India, mentioned in the context of renewable energy initiatives.
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.
*****