MNRE Issues Guidelines For DISCOM Incentives Under PM Surya Ghar Rooftop Solar Scheme

The Ministry of New and Renewable Energy (MNRE) has released detailed operational guidelines and clarifications for providing financial incentives to electricity distribution companies (DISCOMs) under the PM Surya Ghar: Muft Bijli Yojana. The scheme, approved with a central financial outlay of ₹75,021 crore, aims to install rooftop solar systems in one crore residential households across India by the financial year 2026-27. The initiative is expected to significantly increase rooftop solar adoption while encouraging active participation from state power distribution utilities.

Under the scheme, DISCOMs have been assigned a key role in implementing rooftop solar projects at the ground level. Their responsibilities include approving technical feasibility reports, registering vendors, issuing net meters, facilitating grid connectivity, carrying out inspections, and ensuring the timely commissioning of rooftop solar installations. These functions are considered essential for providing consumers with a smooth and efficient installation process.

To motivate distribution companies and accelerate rooftop solar deployment, the government has earmarked ₹4,950 crore as performance-based financial incentives. The incentive program applies to the first 18,000 MW of newly installed rooftop solar capacity across residential, commercial, industrial, and institutional sectors. The reward structure is linked to the annual growth achieved by each utility over its previous year’s installed capacity.

According to the guidelines, DISCOMs that achieve rooftop solar capacity growth of 10 to 15 percent beyond their baseline will receive an incentive equal to 5 percent of the benchmark cost. Utilities that record more than 15 percent growth will be eligible for a higher incentive of 10 percent of the benchmark cost on the additional installed capacity. This performance-based model is intended to encourage utilities to actively promote rooftop solar adoption and improve implementation efficiency.

The ministry has also specified how the incentive funds should be utilized. Ten percent of the total incentive amount received by a utility, subject to a maximum limit of ₹1 crore, must be used for a structured reward and recognition program for utility officials and field staff. Performance will be evaluated every quarter using a weighted scoring system that gives greater importance to residential rooftop solar installations. The best-performing sub-divisions will receive cash rewards, which will be shared among chief engineers, executive engineers, assistant engineers, line staff, and contractual employees involved in the implementation process.

In addition, at least 50 percent of the incentive amount must be transferred to division and sub-division offices, with a maximum allocation of ₹1 crore per division. These funds can be used for administrative activities, public awareness campaigns, consumer and vendor engagement programs, grievance redressal systems, meter testing facilities, and the hiring of temporary manpower to support project implementation.

MNRE has further clarified that any remaining incentive balance may be invested in rooftop solar installations on utility-owned buildings, battery energy storage systems, distribution network strengthening in areas with high rooftop solar penetration, and automated solar generation monitoring systems. However, the ministry has clearly stated that these funds cannot be used for projects already supported under other central government schemes such as the Revamped Distribution Sector Scheme. Utilities are also required to maintain complete financial transparency by submitting audited utilization reports and detailed spending plans, ensuring proper monitoring and accountability in the implementation of the scheme.