By Sugandha Khurana
Dwarkadas Suresh, now popular as Solar Suresh, was one of the earliest adopters of residential rooftop solar in India. During his travels to Germany, he was impressed with the widespread use of solar energy in a country that receives a lot less sunshine than India. Today, his home in Tamil Nadu has a 7 kW rooftop solar installation.
When Suresh started experimenting with solar energy, he struggled to find a rooftop solar vendor. The big names turned him down. It took him almost a year to design and set up a 1 kW solar power system, which cost him almost Rs 300,000 at the time.
But times have changed. Today, a 1 kW battery-powered solar system costs around Rs 70,000 and can be implemented within a day. The residential solar segment is riding on a wave of government support and subsidies. Consumers have access to a wide range of big and small vendors. They can now opt for on-grid systems that eliminate the need for inverters. As per data from the Ministry of New and Renewable Energy (MNRE), India added 4.59 GW of rooftop solar capacity in 2024, a 53 per cent increase over 2023. The PM Surya Ghar: Muft Bijli Yojana (PMSGY), launched in 2024 to promote rooftop solar adoption in the residential segment, played a key role in this growth, facilitating 700,000 rooftop solar installations within 10 months.
An overview of the central and state government initiatives in the residential solar space, industry efforts to promote uptake and augment domestic manufacturing capacity, key implementation challenges, consumer concerns and solutions to support large-scale deployment…
Centre’s master plan: PMSGY
In a strategic move to scale up solar power capacity in the country and empower consumers to generate their own electricity, the central government launched the PMSGY in February 2024. With a total outlay of Rs 750.21 billion, the scheme aims to power 10 million households and set up a total capacity of 30 GW by 2026-27. For rooftop solar systems up to 2 kW, the scheme will cover 60 per cent of the cost, whereas for systems between 2 kW and 3 kW, it will provide up to 40 per cent. The subsidy is capped at a maximum capacity of 3 kW. Based on current benchmark prices, this translates into approximately Rs 30,000 for a 1 kW system, Rs 60,000 for a 2 kW system and Rs 78,000 for systems of 3 kW or more.
Applicants can register on the national portal, which also provides information on appropriate system sizes, benefits, vendor ratings, etc. The subsidy, directly transferred to the beneficiary’s account post-installation, eliminates middlemen. As of March 2025, over 1 million homes have adopted rooftop solar under the scheme.
The centre has also launched a vendor rating programme under the PMSGY to ensure vendors follow industry best practices, guaranteeing optimal performance and safety. Developers, consumers and investors can all rate vendors on various quality and service parameters.
By favouring local vendors, the scheme will also create opportunities for manufacturers of solar modules, inverters, electric components and mounting structures.
State scorecard
Some states are emerging as clear front runners. According to MNRE data, Gujarat, Maharashtra, Rajasthan, Kerala and Tamil Nadu have recorded the maximum number of installations under the PMSGY, as of March 31, 2025.
Other states/union territories are also making significant strides. As per the MNRE’s response to a Rajya Sabha question, Uttar Pradesh received the maximum number of applications under the scheme (1.05 million), as of March 2025. The Lucknow Development Authority has made rooftop solar mandatory for all residential properties of 1,000 square feet or more.
Further, Chandigarh became the first city in India to achieve a remarkable feat of 100 per cent rooftop solar coverage across government houses, with 6,627 residential installations generating approximately 23.5 MUs of solar power annually. The Chandigarh Renewal Energy Science & Technology Promotion Society is actively engaging with several departments of the Chandigarh administration to help spread awareness and encourage people to join the central government scheme.
The Tamil Nadu government has set an ambitious target of 2.5 million installations. It has also exempted the technical feasibility study requirement to attract more consumers. In March 2025, the Delhi government approved a Rs 30,000 subsidy for residential rooftop solar panels, complementing the central government’s subsidy. The state government aims to install 230,000 residential rooftop solar systems over the next three years.
While some states are making significant progress, what is holding others back? In cities like Bengaluru, moderate temperatures and relatively low household electricity consumption, often under 200 units a month, reduce the perceived benefit of installing rooftop solar systems. Meanwhile, in states/UTs such as Punjab, Tamil Nadu and Delhi, free electricity is provided for households up to a certain consumption threshold, which reduces the incentive to invest in solar energy.
Industry efforts to build momentum
Private stakeholders are also pitching in. The market consists of large private developers, solar manufacturers that have ventured into residential rooftop solar, and several start-ups.
A notable example is Tata Power Solar’s “Ghar Ghar Solar, Tata Power ke Sangh” national awareness campaign in cities like Jodhpur, Varanasi and Kochi to promote the uptake of residential solar rooftop solutions. Other leading manufacturers in the space include Waaree Energies, Adani Solar and RenewSys India. They implement residential rooftop solar projects either in the EPC mode or through dealers and channel partners.
Traditional commercial and industrial (C&I) rooftop solar companies such as Amplus have also ventured into the residential rooftop solar space. HomeScape, by Amplus, is tapping into a niche segment by targeting premium urban customers with aesthetically designed installations.
Further, start-ups such as SolarSquare Energy, ZunRoof, Oorjan Cleantech, SunAlpha Energy and Freyr Energy are upping their game by implementing innovative, customer-centric technologies. Private equity companies have been investing in several of these start-ups to help them expand across the country.
Gaps in the system: Consumer concerns, vendor constraints and policy misalignment
A consumer from Raipur, Chhattisgarh reported on a social media platform that just months after installation, strong winds completely destroyed the solar structure even though it was meant to sustain wind speeds of at least 150 km per hour, as per MNRE guidelines. With no insurance cover and a vendor unwilling to take responsibility, the user is now left with broken panels and a loan to repay. Other users have faced similar issues, with no resolution of complaints.
Users of imported panels have reported better service, but the PMSGY mandates the use of domestically manufactured panels to qualify for subsidies. While manufacturers claim 25-year performance warranties, in most cases, if a panel fails after 10 years, the company can claim material failure and deny honouring the warranty. There are no checks in place to ensure quality throughout the product life cycle. Often, these connections do not work during daytime power cuts. However, batteries remain prohibitively expensive for most consumers.
Returns on investment are a major concern for most households as they do not have the financial capacity to invest in expensive solar systems. This is further compounded by limited awareness about solar technology. As a result, many continue to rely on diesel generators or UPS inverters, presuming that solar is highly unreliable. Some older buildings may require reinforcements to support solar panel weight, further increasing the project cost.
On the policy side, the centre and states are not aligned. When high-paying consumers exit the grid, discoms face huge revenue losses. To make up for the loss, TANGEDCO has introduced networking charges of Rs 120-Rs 130 per kW for residential consumers. Such charges are justified from the discom’s perspective as a means to recover lost revenue. Similarly, Andhra Pradesh and Haryana have imposed extra grid support charges on open access and rooftop solar prosumers.
A bright future
The PMSGY can be a game changer if critical issues, such as domestic supply chain gaps, state-level inconsistencies, quality control, consumer awareness and high panel costs, are resolved. To be fully independent, India must not only expand its solar panel production, but also localise photo voltaic cell manufacturing. It currently imports most of the cells that go into these panels, mainly from Chinese companies. More than anything else, positive word of mouth can serve as the strongest catalyst for inspiring residential consumers to adopt solar. Therefore, quality construction and a consumer-centric approach are essential for building trust and scaling up residential rooftop solar.
