+
PMSGY Boosts Rooftop Solar But Faces Supply, Finance Gaps
POWER & RENEWABLE ENERGY

PMSGY Boosts Rooftop Solar But Faces Supply, Finance Gaps

The ambitious Pradhan Mantri Surya Ghar Yojana (PMSGY) has significantly accelerated the growth of India’s residential rooftop solar segment, adding 4.9 GW of capacity within a year of its launch. However, a new report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics warns that the programme continues to face key supply and financial constraints that could slow progress toward its 2027 goals.

According to the report, as of July 2025, over 5.79 million applications have been submitted for rooftop solar installations under the scheme. This represents a nearly fourfold surge in applications between March 2024 and July 2025. Yet, only 13.1 per cent of the target of 10 million installations and 14.1 per cent of the allocated Rs 657 billion (USD 7.5 billion) in subsidies have been released so far. Given this gap, achieving the FY2027 target of 30 GW remains a considerable challenge.

Gujarat leads the nation with the highest installed residential rooftop solar capacity at 1,491 MW, followed by Maharashtra, Uttar Pradesh, Kerala and Rajasthan. Together, these five states account for nearly 77.2 per cent of the total 4,946 MW capacity installed under PMSGY as of July 2025.

“Establishing clear, time-bound rooftop solar capacity targets at the state level is essential for creating a coherent vision and ensuring effective policy execution,” said Vibhuti Garg, Director, IEEFA–South Asia and a contributing author of the report.

Jyoti Gulia, Founder of JMK Research and co-author of the study, noted that PMSGY has strengthened its policy framework to speed up adoption. “Since 2024, the programme has launched a nationwide capacity-building initiative to train over 300,000 people, helping vendors, utilities and financiers upgrade their skills,” she said.

The scheme’s ‘Innovative Projects’ component provides grants covering up to 60 per cent of project costs to support pilot initiatives and new business models. Additionally, the introduction of a digital Domestic Content Requirement (DCR) ensures verified use of Indian-made materials in solar modules. States and Union Territories have also been encouraged to develop solar cities and model solar villages.

Despite this progress, barriers remain. “Low consumer awareness and limited access to finance continue to hinder rooftop solar adoption. Misconceptions about high upfront costs and maintenance persist, especially in rural areas,” said Prabhakar Sharma, Senior Consultant at JMK Research and a co-author of the report.

Before PMSGY’s launch, India’s rooftop solar capacity was concentrated mainly in commercial and industrial segments, with limited uptake in the residential sector due to high costs and low awareness. By offering capital incentives and simplified procedures, PMSGY has begun to bridge this gap—making rooftop solar both accessible and financially viable for households.

The ambitious Pradhan Mantri Surya Ghar Yojana (PMSGY) has significantly accelerated the growth of India’s residential rooftop solar segment, adding 4.9 GW of capacity within a year of its launch. However, a new report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics warns that the programme continues to face key supply and financial constraints that could slow progress toward its 2027 goals. According to the report, as of July 2025, over 5.79 million applications have been submitted for rooftop solar installations under the scheme. This represents a nearly fourfold surge in applications between March 2024 and July 2025. Yet, only 13.1 per cent of the target of 10 million installations and 14.1 per cent of the allocated Rs 657 billion (USD 7.5 billion) in subsidies have been released so far. Given this gap, achieving the FY2027 target of 30 GW remains a considerable challenge. Gujarat leads the nation with the highest installed residential rooftop solar capacity at 1,491 MW, followed by Maharashtra, Uttar Pradesh, Kerala and Rajasthan. Together, these five states account for nearly 77.2 per cent of the total 4,946 MW capacity installed under PMSGY as of July 2025. “Establishing clear, time-bound rooftop solar capacity targets at the state level is essential for creating a coherent vision and ensuring effective policy execution,” said Vibhuti Garg, Director, IEEFA–South Asia and a contributing author of the report. Jyoti Gulia, Founder of JMK Research and co-author of the study, noted that PMSGY has strengthened its policy framework to speed up adoption. “Since 2024, the programme has launched a nationwide capacity-building initiative to train over 300,000 people, helping vendors, utilities and financiers upgrade their skills,” she said. The scheme’s ‘Innovative Projects’ component provides grants covering up to 60 per cent of project costs to support pilot initiatives and new business models. Additionally, the introduction of a digital Domestic Content Requirement (DCR) ensures verified use of Indian-made materials in solar modules. States and Union Territories have also been encouraged to develop solar cities and model solar villages. Despite this progress, barriers remain. “Low consumer awareness and limited access to finance continue to hinder rooftop solar adoption. Misconceptions about high upfront costs and maintenance persist, especially in rural areas,” said Prabhakar Sharma, Senior Consultant at JMK Research and a co-author of the report. Before PMSGY’s launch, India’s rooftop solar capacity was concentrated mainly in commercial and industrial segments, with limited uptake in the residential sector due to high costs and low awareness. By offering capital incentives and simplified procedures, PMSGY has begun to bridge this gap—making rooftop solar both accessible and financially viable for households.

Next Story
Infrastructure Transport

Lucknow Metro East-West Corridor Consultancy Contract Awarded

The Uttar Pradesh Metro Rail Corporation has awarded the first construction-related consultancy contract for the Lucknow Metro East West Corridor to a joint venture of AYESA Ingenieria Arquitectura SAU and AYESA India Pvt Ltd. The firm was declared the lowest bidder for the Detailed Design Consultant contract for Lucknow Metro Line-2 under Phase 1B and the contract was recommended following the financial bid. The contract is valued at Rs 159.0 million (mn), covering design services for the corridor. Lucknow Metro Line-2 envisages the construction of an 11.165 kilometre corridor connecting Cha..

Next Story
Infrastructure Urban

Div Com Kashmir Urges Fast Tracking Of Jhelum Water Transport Project

The Divisional Commissioner of Kashmir has called for the fast-tracking of the Jhelum water transport project, urging district administrations and relevant agencies to accelerate planning and clearances. In a meeting convened at the divisional headquarters, the commissioner instructed officials from irrigation, public health engineering and municipal departments to prioritise the project and coordinate survey and design work. The directive emphasised removal of administrative bottlenecks and close monitoring to ensure timely mobilisation of resources and contractors. Officials were told to in..

Next Story
Infrastructure Urban

Interarch Reports Strong Q3 And Nine Month Results

Interarch Building Solutions Limited reported unaudited results for the third quarter and nine months ended 31 December 2025, recording strong revenue growth driven by execution and a robust order book. Net revenue for the third quarter rose by 43.7 per cent to Rs 5.225 billion (bn), compared with Rs 3.636 bn a year earlier, reflecting heightened demand in pre-engineered building projects. The company’s total order book as at 31 January 2026 stood at Rs 16.85 bn, supporting near-term visibility. EBITDA excluding other income for the quarter increased by 43.2 per cent to Rs 503 million (mn),..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Open In App