The Ministry of New and Renewable Energy (MNRE) is preparing the next phase of the PM Surya Ghar: Muft Bijli Yojana, with a possible rollout in March 2027. The proposed timeline was indicated by J. V. N. Subramanyam, Joint Secretary at MNRE, during discussions at the Bharat Renewable Energy Summit and Expo 2026 in New Delhi on November 3. He said inputs from ongoing consultations with industry stakeholders would contribute to the policy document for the next phase. The government has not yet issued a formal notification confirming the launch date or the new phase's implementation framework.
Alongside the programme's next-stage planning, the ministry is discussing specialised insurance products with insurance companies to address the financial risks associated with small rooftop solar installations. The proposed approach is intended to create greater confidence among lenders and investors by providing a risk-protection mechanism for distributed renewable energy assets. Subramanyam highlighted that insurance for an individual residential installation could be expensive when considered separately, affecting the financial viability of smaller systems.
The ministry's discussions are examining the possibility of aggregating multiple rooftop solar installations so that insurance can be arranged across a larger portfolio rather than purchased separately for each household. A typical 3 kW residential system was cited as an example of the cost challenge. Pooling assets could help distribute insurance costs across a wider base and make coverage more commercially viable. However, the ministry has not publicly specified the proposed policy's coverage, premium structure, participating insurers, exclusions or claim-settlement mechanism.
The insurance discussions are linked to a wider financing challenge in India's distributed renewable energy market. Rooftop solar projects are spread across individual homes and small installations, unlike large utility-scale projects that can be assessed as consolidated assets. This fragmented ownership structure can make risk evaluation, insurance underwriting and financing more complicated. The ministry has therefore stressed the need for policymakers, distribution companies and financial institutions to establish a common definition of a distributed renewable energy asset. A standardised definition could help lenders assess projects more consistently and support the development of financing products suited to smaller installations.
The existing PM Surya Ghar scheme was approved with a total financial outlay of ₹75,021 crore and a target of installing rooftop solar systems in one crore residential households by FY 2026–27. It provides central financial assistance covering 60% of the benchmark cost for the first 2 kW and 40% for an additional 1 kW, with the subsidy capped at 3 kW. At the original benchmark rates, the assistance amounts to ₹30,000 for a 1 kW system, ₹60,000 for 2 kW and ₹78,000 for systems of 3 kW or above.
The scheme also provides for collateral-free, low-interest loans for eligible residential rooftop systems up to 3 kW. Its implementation framework includes a payment security mechanism for renewable energy service company (RESCO) models, under which a third-party company invests in the rooftop installation and supplies electricity to the consumer. The government has earmarked ₹100 crore for this payment security component. These provisions are relevant to the next phase because insurance and payment security address different risks in financing distributed solar projects.
Official MNRE figures show that 26,19,879 rooftop solar systems had been installed under PM Surya Ghar by March 19, 2026, with ₹17,967.53 crore disbursed as central financial assistance. The ministry also reported that the application-to-subsidy process operates through the national portal, with an average processing time of around 15 days after a consumer submits a redemption request with the required credentials. These figures provide a dated measure of the programme's implementation before the proposed transition to its next phase.
The next phase is expected to be shaped by consultations involving industry participants and other stakeholders. Areas requiring policy clarity include the treatment of distributed renewable assets, the role of insurance in reducing project risk, and the financing arrangements needed to expand rooftop solar adoption. The ministry's discussions also point to the importance of coordination among banks, distribution companies and policymakers in making smaller installations easier to finance.
The proposed insurance mechanism could become an important addition to India's rooftop solar financing framework if it makes protection affordable for individual households and project aggregators. However, the details will determine whether it covers equipment damage, performance-related losses, weather events or other operational risks. Until MNRE publishes the policy framework and the next phase's guidelines, the insurance initiative remains under discussion rather than an approved benefit available to scheme beneficiaries.