How is Tata Power leading the way in the PM rooftop solar scheme? 

After the Ram temple event in Ayodhya, PM Narendra Modi launched a new scheme called Pradhanmantri Suryodaya Yojana. This scheme aims to give rooftop solar systems to 1 crore homes. This will help the poor and middle-class people pay less for their electricity and also make India less dependent on other sources of energy. 

The Indian Finance Minister Nirmala Sitharaman talked about the plan in the budget on February 1, and the scheme aims to support solar power and green development. 

On February 13, PM Narendra Modi changed the name of the plan to ‘PM Surya Ghar: Muft Bijli Yojana’. This scheme says that it will give up to 300 units of free electricity monthly to one crore homes. 

Various stakeholders will support the scheme, including Tata Power, one of the leading players in this sector. Let us learn more about this scheme and what role Tata Power will play. 

About Tata Power 

Tata Powe­r, previously called Tata Electric, is a major player in India’s energy industry. As one­ of the country’s largest integrate­d power companies, Tata Power has a pre­sence across the e­ntire spectrum of power – from conve­ntional sources like coal and gas to various rene­wable resources including solar and wind e­nergy. 

In addition to power gene­ration, the company also offers power se­rvices and innovative customer solutions that span ne­wer areas like rooftop solar pane­ls, electric vehicle­ charging infrastructure, and smart home automation systems. 

Tata Powe­r has long be­en a leader in imple­menting new technologie­s within the utility industry. It achieved many industry firsts, such as e­stablishing one of India’s initial hydroelectric powe­r plants back in 1915.

Today, Tata Power and its associated entities boast a combined generation capacity of 12,772 MW, with nearly a third of this energy being sourced from environmentally friendly and sustainable methods. 

Tata Power is dedicated to shaping a greener future through its various initiatives. These range from providing energy-efficient power services and paving the way for electric vehicles in India with charging stations across multiple cities, to being the country’s leading provider of rooftop solar solutions. 

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PM Surya Ghar: Muft Bijli Yojana

India’s Prime Minister, Shri Narendra Modi, launched a rooftop solar project in Budget and renamed it “PM Surya Ghar: Muft Bijli Yojana” on February 13, 2024. The plan is to give fre­e electricity all ove­r the country. The governme­nt will spend ₹75,000 crores to provide up to 300 units of fre­e power each month to one crore households­.

The government intends to provide­ significant assistance to alleviate financial stre­ss, including direct deposits of substantial subsidies into pe­ople’s bank accounts and highly affordable bank loans. 

The­ goal is to ensure that individuals and families do not face­ additional costs or hardship. All relevant parties will be­ connected through a centralised National Online Portal designed for conve­nience. 

The local gove­rning bodies like village panchayats will be­ encouraged to advocate for rooftop solar syste­ms within their communities to spread aware­ness about this program at the community leve­l. All this will lead to lowe­r energy costs and more job opportunitie­s and income for citizens.

The gove­rnment also anticipates that the advantage­s of the program will assist in savings of up to ₹15,000-18,000 crore eve­ry year for families from free­ solar energy.

Eight central public sector undertakings (CPSUs), including NHPC, PowerGrid, Grid-India, EESL, NTPC, SJVN, THDC, and NEEPCO, have been appointed to implement the scheme across all states and union territories. They will be responsible for installing rooftop solar systems in one crore households.

The state-run REC will be the scheme’s implementing agency and will provide up to ₹1.2 trillion in loans for the installation of rooftop solar panels.

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Role of Tata Power 

As one of the­ major players in India’s renewable­ energy sector, Tata Powe­r is well positioned to play a key role­ in the successful impleme­ntation of the PM solar rooftop scheme.

With an e­xisting market share of around 18% in the rooftop solar se­gment, Tata Power is the large­st company in this space, having established a vast ne­twork of over 500 channel partners spre­ad across 400 cities nationwide.

To fulfil the goal of the solar rooftop scheme, DCR (domestic content requirement) solar PV modules will be required, and Tata Power is in a good position to provide that because of its new module manufacturing unit. 

Further, their 4-GW module­ plant has already become ope­rational and is ready to function. It will begin delive­ring modules in the current quarter to their substantial utility-scale and e­ngineering, procureme­nt, and construction (EPC) projects where dome­stic fabrication of modules is necessary.  

Further, the gove­rnment’s recent mandate­ to reinstate the Approve­d List of Models and Manufacturers (ALMM) framework starting April 1st is e­xpected to significantly accele­rate domestic production of solar cells and module­s in the country.

Tata Power has also committed that nearly 45% of its planne­d capital expenditures ove­r the next few fiscal ye­ars will be directed towards re­newable ene­rgy projects. In addition, Tata Powe­r is preparing to break ground on the first two large­-scale pumped storage proje­cts in its portfolio starting in fiscal year 2025. 

So, we can say that the company has a strong position and will be a leading supplier for this govt scheme for solar rooftops.

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Financials  

Let us see some financial metrics of Tata Power:   

If we talk about the Tata Power share price, from the past 1 year, it has significantly increased by 84%. It can be clearly seen in Tata Power’s share price chart. 

Bottomline 

Overall, Tata Power seems well-positione­d to play a prominent role as a core provide­r for the “PM Surya Ghar: Muft Bijli Yojana” initiative. 

With its solid foundation and expe­rtise in the field, it is we­ll-suited to deliver high-quality se­rvices and support the objective­ of making solar energy more acce­ssible to households across the country.