Nearly twenty months after its launch, India’s flagship rooftop solar scheme, the Pradhan Mantri Surya Ghar: Muft Bijli Yojana (PMSGY), has made visible progress but still faces major roadblocks. A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research shows that only 13 per cent of the scheme’s 10 million household installation target has been achieved as of July 2025.
The government launched PMSGY in February 2024 to accelerate the spread of solar power in the residential sector, offering capital subsidies to help households cover installation costs. It aimed to create one crore rooftop solar-powered homes by 2027, generating 30 gigawatts (GW) of capacity.
So far, the scheme has added 4.9 GW, about 45 per cent of India’s total residential rooftop solar base. But the conversion of applications into actual installations remains weak. Out of 5.79 million applications filed, only around 22.7 per cent have been completed.
“The public interest is undeniable, but the conversion rate of just 22.7 per cent 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 limited financing access.”
Uneven progress across states
The report highlights Gujarat and Kerala as top performers, with both states achieving conversion ratios above 65 per cent. Gujarat alone accounts for nearly 1,491 megawatts (MW) of installed residential rooftop capacity, the highest in the country.
Gulia said this success is due to “robust vendor networks and strong consumer awareness.”
Kerala’s results mirror Gujarat’s. Local officials credit early outreach campaigns and responsive grievance systems for their progress.
In contrast, Uttar Pradesh and Andhra Pradesh have conversion ratios of just 14.8 per cent and 2.9 per cent respectively. Both face shortages of trained installers and delays in approval and subsidy disbursement.
In Delhi and Goa, higher system sizes per household, averaging 5.1 kilowatts (kW) and 8.7 kW respectively, have been supported by generous state subsidies. Delhi residents installing a 3 kW system can now recover costs in about 30 months, compared to over four years without subsidy.
Subsidies and supply constraints
The PMSGY has a total financial outlay of Rs 75,021 crore. Households can receive up to Rs 78,000 in central financial assistance, with some states offering additional top-ups.
Yet, according to the report, supply shortages and delayed disbursals have weakened the scheme’s impact. The mandatory Domestic Content Requirement (DCR) rule, which insists on the use of locally made solar modules, has led to rising costs and limited availability.
“DCR-compliant modules are 30–40 per cent costlier and harder to source,” said an executive from a rooftop solar company based in Maharashtra. “We’re seeing customers abandon subsidies because imported panels are cheaper and readily available.”
Vibhuti Garg, director for South Asia at IEEFA, said the supply chain imbalance threatens progress. “Without prioritising domestic supply for PMSGY, installations risk stalling. A clear reservation policy ensuring 20 per cent of DCR output for residential projects is essential,” she said.
Digital delays and financing hurdles
The PMSGY National Portal, built to simplify approvals and subsidy tracking, remains a persistent weak spot. Consumers and installers have reported frequent technical issues and long delays in complaint resolution.
“We’ve had cases where customer details were mismatched or subsidies delayed for months,” said a Gujarat-based vendor empanelled under the scheme.
Financing has also emerged as a bottleneck. While public sector banks offer rooftop solar loans at 6–8 per cent interest, their complex paperwork and slow approvals discourage many households.
“NBFCs and fintech firms are quicker but charge 10–14 per cent interest,” said Gaurav Upadhyay, an energy finance specialist at IEEFA. “Simplified solar loans and pay-as-you-save models could bridge the gap. Without accessible finance, adoption in lower-income segments will plateau.”
Capacity building and solar villages
To address manpower shortages, the Ministry of New and Renewable Energy (MNRE) launched a capacity-building programme in mid-2024 to train 300,000 solar technicians. By August 2025, over 34,000 installers and 17,000 helpers had been certified.
The ministry also introduced two new components, Solar Cities and Model Solar Villages. States and union territories were asked to nominate at least one city for full solarisation, and one village per district to demonstrate off-grid solar solutions.
As of April 2025, 27 states and union territories had identified their solar cities, including Sanchi in Madhya Pradesh, Thiruvananthapuram in Kerala, and Ayodhya in Uttar Pradesh. None have yet been fully implemented.
“These initiatives have potential but need faster execution,” said Garg. “They could serve as models for rural clean energy expansion if managed well.”
Several states have introduced their own subsidy programmes to complement the central grant. Delhi, Assam, Goa, Uttarakhand, and Uttar Pradesh now offer between Rs 10,000 and Rs 20,000 per kilowatt in additional support.
This has reduced the payback period for a 3 kW system from around 54 months without subsidies to about 30 months with them. In some states, where extra incentives apply, recovery can occur in as little as 16 months.
Delhi and Kerala also provide performance-based incentives. In Delhi, lower-consuming households receive generation-based payouts for five years to encourage regular maintenance and usage.
Vendor expansion and quality concerns
The number of vendors registered under PMSGY has increased from 6,500 in mid-2024 to more than 40,000 by July 2025. Uttar Pradesh, Maharashtra, and Gujarat together host nearly a quarter of these vendors.
While this rapid growth has improved accessibility, it has also raised quality concerns. Some installers deliver inconsistent workmanship, causing shorter system lifespans.
Industry experts believe the market will consolidate over time, leaving larger engineering and procurement firms to dominate installations as compliance and reporting standards tighten.
The report found that approval timelines frequently exceed the 30-day target set by the government. Many distribution companies take up to 120 days to complete feasibility checks and net-metering.
These delays, combined with limited availability of DCR modules and meter shortages, slow the rollout further.
At the same time, the central grievance portal remains under strain. Data-entry errors, mismatched documents, and lack of escalation mechanisms have created long backlogs in subsidy disbursements.
“The digital system is an excellent concept but poorly maintained,” said a senior vendor from Rajasthan. “Consumers lose patience when they don’t see progress updates.”
road ahead
The report proposes several reforms to accelerate progress. These include district-level facilitation cells to coordinate between households, vendors, and utilities; district grievance matrices for faster complaint handling; and standardised rooftop solar kits for easy installation.
Experts also called for a domestic supply allocation policy to secure at least 20 per cent of DCR modules for residential projects.
“India’s rooftop revolution is 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 remains another pilot.”
The MNRE has begun integrating the India Energy Stack, a digital framework designed to automate applications, net-metering, and subsidy tracking. Officials say this will improve transparency and reduce manual errors.
Experts believe PMSGY has succeeded in bringing residential rooftop solar into the mainstream. But structural issues, from supply shortages to procedural delays, continue to limit growth.
If reforms move quickly, India could still reach its 30 GW goal by 2027. That will depend on stronger state participation, vendor quality control, and simpler financing models.
The report concludes that while the scheme has laid a solid foundation, achieving long-term impact will require faster execution and improved coordination across agencies.
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