Unleashing the Residential Rooftop Solar Potential
Pradhan Mantri Surya Ghar Yojana to be the game changer
The central government’s plan to transform India’s rooftops into a vast solar resource to secure the nation’s energy independence is as laudable as it is ambitious. However, rooftop solar installation progress in the residential segment was slow. That was until the launch of PMSGY in February 2024. The popular new scheme is a quantum leap towards India’s bright solar future, increasing the country’s residential rooftop solar capacity by more than 50% in just six months.
The scheme aims to foster an enabling ecosystem for the residential rooftop solar market and cumulative installations of 30GW solar systems in 1 crore (10 million) households in India by March 2027. To do so, PMSGY increased the central financial assistance (CFA) for systems below 3 kilowatt peak (kWp) capacity, set stringent process timelines and integrated itself with the National Portal for Rooftop Solar (NPRS) to provide a digitised user experience to residential consumers. With strong impetus from the GoI, the financing options and terms for the residential rooftop solar market have improved significantly. Several financiers are focusing on industry-wide tie-ups with project-executing entities and equipment suppliers, offering a one-stop solar installation solution to consumers.
Yet some critical pieces are still missing from the renewable energy mix before the dream of delivering solar power for all becomes a reality. These include need for more availability of domestic content requirement (DCR) modules for the residential sector, concerns about scheme adoption by its targeted demographic, considerable mismatch between the number of project applications and the availability of vendors etc.
A firm policy and regulatory framework support should be reflected in its implementation to build a resilient and vibrant decentralised energy ecosystem with residential rooftop solar at the forefront. Adoption of residential rooftop solar is a “win-win” scenario, resulting in significant savings for consumers and state distribution companies (DISCOMs) on cross-subsidisation costs and reduced aggregate technical and commercial (ATC) losses.
The growth of the decentralised energy market in India (of which rooftop solar is a crucial component) will be critical to unlocking energy independence and ensuring energy security. With 8-10GW annual solar installation targeted under PMSGY, it will contribute immensely to India reaching its overall renewable energy target of 500GW by 2030.
Table of Contents
- Executive Summary
- Introduction
- Installation Trends
- State Trends
- Residential Rooftop Solar Market Segmentation
- Regulatory Developments in Residential Rooftop
- Risks and Challenges
- Financing Trends and Industry Partnerships
- State Attractiveness for Residential Rooftop Solar
- Recommendations
- Way Forward
- Conclusion