MNRE Links CFA Disbursement to Rooftop Solar Commissioning

The Ministry of New and Renewable Energy (MNRE), in continuation of the operational guidelines issued on December 28, 2024, has provided directives for implementing the Utility Led Aggregation (ULA) model under the PM Surya Ghar: Muft Bijli Yojana (PMSG: MBY).

The Ministry of New and Renewable Energy’s move to link Central Financial Assistance (CFA) payments to the successful commissioning of rooftop solar systems is meant to enhance transparency and accountability. It does so by ensuring vendors receive funds only after verification of installation. This policy change can help to reduce financial risks, prevent misuse of funds, and encourage timely and quality execution of solar projects. This step is expected to strengthen consumer confidence and accelerate the adoption of rooftop solar across the country.

Additionally, the notification stated that this payment release mechanism applies uniformly to all proposals under the ULA model, including both Utility Owned (EPC and sub-RESCO) and Consumer Owned models.

Furthermore, MNRE notified that it would assign funds in advance to NPIA (REC) under a designated head to facilitate the identification and tracking of payments. The regulations mandate that all ULA Implementing Agencies and State/UT entities adhere strictly to this process to ensure transparency and timely utilisation of CFA under the ULA model of PMSG: MBY.

Stages For CFA Disbursal

The notification also outlines the stages for the release of Central Financial Assistance (CFA) funds for ULA projects, specifying that funds would be disbursed post-commissioning of the project. It mandates that CFA be released in a single tranche, strictly linked to the successful physical installation, inspection, and commissioning of rooftop solar (RTS) systems. The guidelines also clarify that no advance release of CFA shall be permitted.

MNRE further defines the process for securing agreements via the National Portal. The State/Utility/Implementing Agency is required to issue a work order or execution agreement to the selected vendor. 

To ensure transparency for the consumer, installation information and verified vendor bank account details must be uploaded on the National Portal by the Implementing Agency. Upon completion of physical verification and commissioning, the “ULA Redeem” option could be used to initiate CFA disbursement, specifying consumer-wise and vendor-wise details.

Verification and Payment by NPIA:

MNRE has established a provision for the National Program Implementation Agency (NPIA) to verify installation reports and vendor bank account details uploaded on the National Portal.

Post verification, CFA would be disbursed directly to the ULA vendor’s bank account, and a notification would be shared with the concerned State/Utility/Implementing Agency. This will provide complete visibility of the amount released to each ULA vendor.

In cases of changes in vendor details, any modifications or updates to vendor bank accounts will be routed through NPIA for verification and record updates. This would help to maintain transparency and accuracy in the payment process.