In an effort to fast-track the Pradhan Mantri Surya Ghar Muft Bijli Yojana (PMSGMBY), the Union Finance Ministry has instructed banks to rely exclusively on the National Portal for all consumer validation, installation verification, and site feasibility assessments. According to a recent report, physical verification, often cited as time-consuming, will be phased out in favour of a streamlined, digital-only process.
The PMSGMBY initiative targets the installation of rooftop solar systems for both rural and urban households across India. The scheme aims to reach 10 million homes, providing affordable access to renewable energy solutions. A collateral-free standard loan product is available under the programme, offering financing linked to the repo rate plus 50 basis points (Repo + 50 bps) for amounts up to ₹2 lakh.
As per the latest figures, approximately 4.1 million applications have been received under the scheme. Of these, around 1.1 million installations have been successfully completed. On the financial side, roughly 375,000 loan applications have been submitted, leading to the sanctioning of about 2 lakh loans. Over ₹4,600 crore has been sanctioned, with more than 75% of loan applications relating to amounts up to ₹2 lakh.
The report also highlights the need for new financial products tailored for vendors. A working capital instrument specifically designed for vendors is being proposed, with encouragement for private sector banks to support its adoption. Additionally, there is an emphasis on aiding applicants without a Credit Information Bureau (India) Limited (CIBIL) score, thus making the scheme more inclusive.
Read More: Uttar Pradesh Government Sets Ambitious Rooftop Solar Target Under PM Surya Ghar Yojana.
To further support the rollout, banks are being encouraged to strengthen field activities. This includes technical and product training at the branch level, consumer awareness programmes, the setting of branch-specific targets, and continuous monitoring through State Level Bankers’ Committees (SLBCs) and District Level Bankers’ Committees (DLBCs).
The Finance Ministry report also suggests that renewable finance obligations be explored and integrated into the banking system, alongside the expansion of Priority Sector Lending (PSL) to bolster support for renewable energy initiatives.
Recognising the need for greater flexibility in the application process, the report proposes introducing a functionality allowing applicants to modify their bank name prior to final submission. Furthermore, a confirmation popup verifying the selected bank and branch details before proceeding will be incorporated to minimise errors.
Under the current model, the consumer’s average contribution is estimated at around ₹15,000. Vendors receive the government subsidy in two tranches — 70% initially and 30% upon completion. Despite digital integration through the National Portal and the Jan Samarth platform, the process still entails multiple compliance steps such as branch visits, site verification, and document submission.
Importantly, the financing potential of the scheme is valued at ₹2 trillion, presenting a significant opportunity for the banking and financial sectors.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Apr 29, 2025, 3:37 PM IST
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