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MNRE Extends Phase II of Residential Rooftop Solar Program Till March 31, 2026

MNRE Issues Notification for Extension of Phase II of Residential Rooftop Solar Program Until March 31, 2026

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The Ministry of New and Renewable Energy (MNRE) has extended Phase II of its ‘Grid-Connected Rooftop Solar Program’ to March 31, 2026.


The program was extended without additional expenditures of Rs. Rs. 11,814 Crore for both – the residential segment (Component A) and the distribution companies (Component B), as approved.

However, after achieving the target, savings from the Central Financial Assistance (CFA), or incentives to distribution companies (DISCOMs), must be used to support additional residential capacity.

The Ministry has launched the Rooftop Solar Programme Phase-II for which the guidelines were issued in August 2019. Under this Programme 4000 MW rooftop solar (RTS) capacity addition was targeted through Central Financial Assistance (CFA) in residential sector including for households in rural areas.

Last year MNRE has amended the guidelines for Phase II of the rooftop solar project. The Ministry has amended the guidelines to state that the implementing agent should allocate a minimum 10% of the total amount to the lowest bidder. The bank guarantee will be forfeited if the vendor fails to execute the allotted quantity. This will result in the vendor being blacklisted for five year.

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Recently, MNRE has also issued clarification on applicability of Central Financial Assistance (CFA) available under Rooftop Solar (RTS) Programme Phase-II for solar systems installed under Virtual Net Metering (VNM) arrangement.

The ministry said that the CFA applicable under RTS Programme Phase-II of MNRE will also be applicable for solar plants set up under VNM arrangement, subject to following conditions: –

i. CFA would be available only for residential consumers of rural areas,
ii. Considering that connected load of a residential consumer in rural areas would generally be not more than 3 kW, each participating consumer under VNM would be allowed to install capacity upto 3 kW and avail subsidy available under RTS Programme Ph-II.
iii. Solar plant installed under VNM shall supply power to the same distribution sub-station (HT or LT side) through which the participating consumers are connected. This will ensure reliable power supply to the participating consumers and other benefits of co-locating power generation and consumption.

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Further, to facilitate the installation of solar plants under VNM arrangement the ministry has prepared a Concept Note covering some of the possible business models including CAPEX, RESCO and Utility operated model.

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