Budget 2024: From rooftop solar push to 1 crore households getting 300 units of free electricity

Today, Finance Minister Nirmala Sitharaman announced the last interim budget before the impending general elections, covering the government’s focus on various sectors, including infrastructure, railways, renewable energy, housing, and more. Inside the budget, the finance minister made a significant announcement regarding renewable energy. To turn households into power generation units, the central government will focus on popularizing rooftop solarization and providing free electricity.

Rooftop Solarisation and Muft Bijli

Through rooftop solarization, one crore households will be enabled to obtain up to 300 units of free electricity every month. This scheme aligns with the resolve of the Prime Minister on the historic day of the consecration of the Ram Mandir in Ayodhya.

Last month, the PM announced the Centre’s plan to install rooftop solar on one crore households under the Pradhanmantri Surodaya Yojna. The scheme aims to provide electricity to low and middle-income individuals through solar rooftop installations, along with offering additional income for surplus electricity generation. The Ministry of New & Renewable Energy launched the second phase of the rooftop solar program in 2019 to achieve 40 GW of rooftop solar.

This initiative will not only reduce the electricity bills of the poor and middle class but will also contribute to making India self-reliant in the field of energy.

Following are the benefits the government is expecting:

• Savings up to Rs 15,000 to Rs 18,000 annually for households from free solar electricity and selling the surplus to the distribution companies.
• Charging of electricity vehicles
• Entrepreneurship opportunities for a large number of vendors of supply and installation.
• Employment opportunities for the youth with technical skills in manufacturing, installation, and maintenance.

Stocks likely to benefit from

After the announcement, stocks in the same industry witnessed a significant surge in their share prices. These companies are directly involved in manufacturing solar panels or engaged in the generation of renewable energy. Some companies manufacture related products supporting electricity generation through solar panels. Additionally, there are companies engaged in the development, construction, operations, and maintenance of solar power projects. Moreover, certain stocks hit the upper circuit when the finance minister announced the project.

Let’s explore the stocks that are likely to benefit from this. As discussed earlier, three types of companies are expected to gain from this scheme. First, companies engaged in the manufacturing of solar panels; second, companies in the service business providing installation and repair facilities; and third, companies manufacturing equipment or ancillary products used in the process of solar power generation.

Investors should keep these stocks on their radar.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.