Unlocking Potential: India’s Growth In Residential Rooftop Solar Through Pradhan Mantri Surya Ghar Yojana – Report

The report highlights India’s emerging residential rooftop solar market, showcasing significant growth potential, driven by the Pradhan Mantri Surya Ghar Yojana (PMSGY) launched in February 2024. India’s rooftop solar market, which includes residential, commercial, and government sectors, has seen the residential segment lag behind others. As of March 2024, only 27% of India’s rooftop solar capacity, 3.2 GW, was from residential consumers. Most of this capacity is in Gujarat, a state that has led the charge in residential solar installations.

PMSGY aims to boost the sector by increasing central financial assistance (CFA) and setting up a digitized process through the National Portal for Rooftop Solar (NPRS). The scheme targets installing solar panels on 10 million rooftops, amounting to 30 GW of installed capacity by March 2027. In just six months, the program has already recorded 1.8 million applications and 385,000 installations, leading to 1.8 GW of new residential rooftop solar capacity.

Despite these achievements, several challenges remain, such as the lack of domestic solar modules, which are required under the scheme’s Domestic Content Requirement (DCR) clause. While the availability of financing has improved, particularly through partnerships with banks and non-banking financial companies (NBFCs), adoption among lower-income households remains slow due to high upfront costs. Additionally, in states like Assam, vendor shortages are creating bottlenecks in installation.

The report also points out the regulatory hurdles faced by the scheme, with some state electricity distribution companies (DISCOMs) causing delays in approvals and net meter installations, slowing down the subsidy disbursement process. Technical issues with the NPRS, where users face difficulties in tracking applications, further compound the problem.

To address these issues, the government must ensure sufficient module supply, improve financing terms for smaller consumers, and resolve the technical glitches of the NPRS. A unified regulatory approach, combined with strong policy enforcement, will be crucial to realizing the full potential of residential rooftop solar in India. With the right support, the residential segment can help meet India’s ambitious renewable energy targets, contributing significantly to the country’s goal of 500 GW of renewable energy by 2030.