India’s solar push stalls 

October 15, 2025

Nearly 20 months after the launch of the Pradhan Mantri Surya Ghar: Muft Bijli Yojana (PMSGY), India’s flagship rooftop solar initiative shows uneven progress, a new report reveals. As of July 2025, only 13 per cent of the 10 million installations target has been completed, and 14 per cent of allocated subsidy funds disbursed, despite over 5.79 million applications logged. The report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research highlights operational and procedural bottlenecks that threaten the scheme’s ambitious 30 GW target for FY27.

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, only 22.7 per cent of applications have converted into installations. Jyoti Gulia, founder of JMK Research, noted that consumers face procedural challenges, particularly in states with weaker vendor ecosystems or limited financing options.

Gujarat and Kerala emerge as model states, achieving conversion ratios above 65 per cent, aided by strong vendor networks and consumer awareness. In contrast, Uttar Pradesh (14.8 per cent) and Andhra Pradesh (2.9 per cent) lag due to poor vendor density and administrative delays. Goa and Delhi report higher-capacity systems averaging 8.7 kW and 5.1 kW per household, respectively, supported by state subsidies that shorten cost-recovery periods.

Subsidy disbursal delays and supply constraints remain key challenges. India’s domestic content requirement (DCR), mandating local solar modules, has created shortages as only 25 GW of DCR cell capacity exists against 100 GW of module capacity. DCR-compliant modules are 30–40 per cent costlier, discouraging some consumers from claiming subsidies.

The PMSGY digital platform also faces technical issues, including data-entry errors and delayed grievance redressal, slowing approvals. Financing remains a hurdle, with public sector bank loans at 6–8 per cent interest often hindered by paperwork, while NBFCs and fintechs offer faster but costlier loans of 10–14 per cent.

To accelerate adoption, the Ministry of New and Renewable Energy has launched training for 300,000 solar technicians and initiatives such as Model Solar Village and Solar City, though these are not yet fully operational. The report recommends district-level facilitation cells, grievance matrices, and standardised plug-and-play rooftop kits to simplify installations and reduce costs.

Gulia concludes that India’s rooftop solar movement is visible but fragile. The next 18 months will be critical to determine whether PMSGY becomes a genuine household energy transformation or remains a well-intentioned pilot.