PM Surya Ghar scheme fails to benefit low-income families: CFA review

By Jag Jivan 

A comprehensive review of the  after the launch of the Pradhan Mantri Surya Ghar Muft Bijli Yojana (PM-SGMBY)  by the advocacy group Centre for Financial Accountability (CFA) has found that the scheme is structurally unsuitable for low-income families and has largely benefited relatively affluent households instead.

The scheme, launched in February 2024 with an outlay of over ₹75,000 crore, aims to provide rooftop solar panels to one crore households and offer up to 300 units of free electricity per month. However, according to the CFA report titled “A Review of Pradhan Mantri Surya Ghar Muft Bijli Yojana Scheme,” the actual impact on the ground reveals a significant gap between the government’s stated objectives and outcomes for poorer families.

“The scheme’s basic model is based on individual rooftop solar installations, while a large proportion of poor families live in rented houses, temporary shelters, slums, or multi-storey shared housing, where they do not own the roof,” the report noted. Consequently, a significant portion of these families are excluded from the outset.

Despite receiving 47.3 million applications, only approximately 1.67 million households had installed solar plants as of August 2025 — a mere 16.7 percent of the target. The report attributes this gap to high upfront costs, delays in subsidy disbursement, and complex approval procedures.

The financial analysis conducted for urban households in Nagpur, Maharashtra, showed that very low-consumption households — typically low-income families — take more than 20 years to recover their upfront investment and often experience negative net present value over the system’s lifetime. In contrast, households with higher electricity usage recover their costs within five to ten years and generate substantial long-term financial gains.

“Even after subsidies, the net cost for a 3 kW system ranges between ₹1.11 lakh and ₹1.37 lakh, which is far beyond the financial means of low-income families,” the report stated. Bank loans, formal documentation, and guarantee requirements pose additional obstacles for this group.

The review also highlighted that fixed charges, net metering conditions, and maintenance costs add to the financial burden. The reliance on digital portals, technical jargon, and private vendors further makes the scheme inaccessible for poorer segments of the population.

“The concept of ‘free electricity’ for low-income families is fraught with contradictions,” the authors Deepmala Patel and Pranay Raj wrote. “The scheme does not provide completely free electricity, but rather offers subsidised relief up to a limited number of units.”

The report recommended that to make the scheme truly pro-poor, the policy must move beyond the individual rooftop model and prioritise community solar projects, tenant-friendly frameworks, complete or near-complete financial assistance for low-income families, and offline support mechanisms. “Only then can this scheme become a genuine source of energy relief and social justice for low-income families,” it concluded.