New Delhi: The Union Cabinet has approved the 'Pradhan Mantri Surya Sarovar Yojana (PM-SSY)', a scheme to develop 5,000 MW of floating solar photovoltaic (FSPV) projects with co-located energy storage, at a total outlay of Rs 5,070 crore, the government said in a statement on Friday. Projects will be sanctioned between FY2026-27 and FY2030-31, with financial support disbursed up to FY2032-33.
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Announcing the decision, Information and Broadcasting Minister Ashwini Vaishnaw said the projects would be selected through tariff-based competitive bidding.
The scheme is the follow-through on a plan MNRE had been signalling. In June, releasing the NISE assessment, Minister for New and Renewable Energy Pralhad Joshi said reservoirs and other water bodies were emerging as assets for clean energy, and MNRE Secretary Santosh Kumar Sarangi said the ministry was preparing dedicated support schemes for floating solar and agri-photovoltaics, then in discussion with the Finance Ministry.
The scheme's pitch is that it needs no land. Vaishnaw said there was "no need for land acquisition," with projects instead using "existing reservoirs, canals, and industrial ponds." He said panels on water carried an additional benefit: "the reduction of water loss due to evaporation." The government said the approach would avoid competition for scarce land. India's floating solar capacity is currently around 700 MW; the scheme would add 5,000 MW.
Each project must pair generation with at least two hours of co-located storage, for a combined 10,000 MWh across the 5,000 MW. Vaishnaw said the storage component was designed to help "manage peak demand." The statement issued by the government said it would strengthen grid reliability.
The scheme provides Central Financial Assistance (CFA) of Rs 1 crore per MW for eligible projects after commissioning, which accounts for Rs 5,000 crore of the Rs 5,070 crore outlay. A further CFA of up to Rs 50 lakh per project is available for feasibility work, including bathymetry, hydrography and environmental studies, to de-risk project development.
The approval follows an assessment by the National Institute of Solar Energy (NISE), which estimated a floating solar potential of about 102.18 GWp across reservoirs and other inland water bodies; Vaishnaw put the figure at around 102 GW. According to that assessment, the potential is concentrated in states outside India's established solar geography: Maharashtra (16.28 GWp) and Madhya Pradesh (14.89 GWp) lead, followed by Karnataka (13.69 GWp), Odisha (12.81 GWp) and Telangana (10.72 GWp) — the last two ranking ahead of solar-heavyweights Gujarat and Rajasthan, since the distribution tracks reservoir availability rather than sunshine.
On funding, Vaishnaw said the Centre would "not ask state governments to make financial contributions for this initiative", but would seek their support, as "many water bodies fall directly under state government control". Asked about the effect on water bodies, he said "biodiversity and environmental concerns" would be taken into account.
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Beyond sparing land, the NISE report found technical and water-saving reasons for floating solar. It said the cooling effect of water lifted generation, with fixed-tilt systems showing a maximum improvement of 6.74 percent in a like-for-like comparison, and that panels shading a reservoir cut evaporation by 30 to 60 percent. It also flagged the trade-off: floating systems are currently about 25 percent more expensive upfront than land-based solar, owing to the floats, anchoring and waterproofing.
The government said it expects the scheme to cut about 10 million tonnes of carbon dioxide emissions a year and to generate roughly 16,000 to 17,000 full-time-equivalent jobs across the value chain. It also expects the scheme to spur domestic manufacturing of floatation systems, PV cells, modules and storage systems, which it linked to its Aatmanirbhar Bharat and Viksit Bharat goals.
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