PM Surya Ghar Yojana boosted residential rooftop solar through incentives and simplified procedures.
Solar adoption hindered by financing gaps, technical issues, and weak awareness.
Only 22.7 per cent conversion; Gujarat, Kerala lead residential solar growth.
States offer extra subsidies to reduce rooftop solar installation costs.
Nearly 20 months since the launch of the Pradhan Mantri Surya Ghar: Muft Bijli Yojana (PMSGY), India’s flagship rooftop solar mission, progress remains uneven. As of July 2025, only 13 per cent of the target of 10 million installations have been completed, and 14 per cent of subsidy funds disbursed, despite over 5.79 million applications logged, according to a new report.
The findings of the report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research reveal that India has added 4.9 gigawatts (GW) of residential rooftop capacity under PMSGY — nearly half of the country’s total 11 GW household solar base. Yet the report warned that unless approval delays, vendor shortages and subsidy bottlenecks are resolved, the 30 GW target for FY27 may prove elusive.
“The public interest is undeniable, but the conversion rate of just 22.7 per cent from applications to installations exposes deep operational and procedural cracks,” said Jyoti Gulia, founder of JMK Research. “Consumers still find the process intimidating, especially in states with weaker vendor ecosystems or financing access.”
The report identified Gujarat and Kerala as model states, both achieving conversion ratios above 65 per cent, thanks to robust vendor networks and strong consumer awareness. In contrast, Uttar Pradesh (14.8 per cent) and Andhra Pradesh (2.9 per cent) trail far behind, burdened by poor vendor density and administrative bottlenecks.
Goa and Delhi also stand out for higher-capacity systems — averaging 8.7 kilowatt (kW) and 5.1 kW per household respectively — aided by supportive state subsidies. In Delhi, for example, a household installing a 3 kW system can now recover costs in as little as 30 months, compared to 54 months without subsidies.
Under the Rs 75,021 crore scheme, households can claim central financial assistance up to Rs 78,000, topped up by state-level incentives. Yet, supply constraints and delayed disbursals are eroding the scheme’s appeal.
The report flagged a new bottleneck: India’s domestic content requirement (DCR) rule, which mandates use of locally made solar modules. With only 25 GW of DCR cell capacity against 100 GW of module capacity, a shortage has emerged. “DCR-compliant modules are 30–40 per cent costlier and harder to source. That’s pushing some consumers to forgo subsidies altogether,” said an executive with a top rooftop vendor.
“Without prioritising domestic supply for PMSGY, installations risk stalling,” said Vibhuti Garg, director, South Asia, IEEFA. “We need a clear reservation policy to ensure at least 20 per cent of DCR output goes to residential projects.”
The government’s digital platform for PMSGY — designed for seamless approvals and subsidy tracking — remains riddled with technical glitches and slow grievance redressal. Installers reported persistent data-entry errors and no clear escalation pathway. “We’ve had cases where consumer details are mismatched or subsidies delayed for months,” said a Gujarat-based solar vendor empanelled under the scheme.
Financing remains another sticking point. While public sector banks offer rooftop loans at 6-8 per cent interest, the cumbersome paperwork deters many middle-income consumers. NBFCs and fintechs fill the gap with faster but pricier loans, often at 10-14 per cent interest.
“Simplified solar loans and wider awareness of pay-as-you-save models could bridge the gap,” said Gaurav Upadhyay, energy finance specialist at IEEFA. “Without accessible finance, adoption in lower-income segments will plateau.”
To accelerate deployment, the Union Ministry of New and Renewable Energy has begun capacity-building programmes to train over 300,000 solar technicians, and launched ‘Model Solar Village’ and ‘Solar City’ initiatives to take the mission deeper into rural India. However, none have yet been fully operationalised.
The report recommended establishing district-level facilitation cells to streamline approvals and district grievance matrices to improve accountability. It also called for standardised plug-and-play rooftop kits to simplify installations and reduce costs.
“India’s rooftop revolution is finally visible on the ground — but we must now move from subsidy-driven adoption to market-led trust,” said Gulia. “The next 18 months will decide if PMSGY becomes a genuine household energy movement or just another well-intentioned pilot.”