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:
| Metric | Value |
| Market cap | ₹121119.31 crores |
| Book value per share | ₹94.3 |
| Revenue from operations (FY 2022-23) | ₹55,109 crores |
| Net profit (FY 2022-23) | ₹3,810 crores |
| Dividend yield | 0.53% |
| ROCE | 11.7% |
| ROE | 12.6% |
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.
