Barriers to Rooftop Solar Adoption in Tier 2 and Tier 3 Cities, and How to Overcome Them

The challenges for tier 2 and tier 3 cities are very real, and solutions to them will need awareness creation, financial creativity, policy consistency, and reliability of service.

September 05, 2025. By News Bureau

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Galo Solar

Rooftop solar market

Rooftop solar installations

Solar energy

Rooftop Solar Adoption

Renewable energy

India solar capacity

India's rooftop solar adoption is progressing with substantial momentum, driven by the PM Surya Ghar Muft Bijli Yojana, initiated by Prime Minister Narendra Modi in February 2024. This is the world's largest rooftop solar scheme, as it aims to supply clean energy to 1 crore households by March 2027. This dream is already beginning to materialise in a strong movement, as by July 2025, rooftop solar installations had already reached 19.9 GW, taking India's total solar capacity to approximately 119 GW. With subsidies, well-defined objectives, and increasing consciousness, the program is bringing solar power to Indian homes and creating a way forward to a cleaner tomorrow.

However, expansion in tier 2 and tier 3 towns remains slower than that of metros, although these towns possess enormous untapped potential. Breaking through the obstacles, they could transform them into powerful drivers of India's clean energy revolution.

Limited Awareness and Trust

In the smaller cities, most households are not even aware of the advantage of rooftop solar. Individuals are not sure about the actual savings, reliability of vendors, and scope of after-sales service. This limited consciousness has pulled down residential adoption, which stood at 3.2 GW up to March 2024, primarily concentrated in a few states. Building confidence and trust must be complemented by seeing success stories in society, such as schools, hospitals, and housing societies, which have already gone solar.

Financing Gaps and Upfront Costs

The initial investment, even after the subsidy, remains a hefty investment for many middle-class households. Financing opportunities are generally limited, since local banks and microfinance institutions are risk-averse to lending for rooftop solar. As loans are not easily available or not extended through installment schedules, families do not prefer to pay an initial amount. Growing simple financing models, such as on-bill financing with the help of small-ticket loans intended for 1–5 kW systems, will enable adoption, particularly when combined with warranties or generation guarantees that shift risk to the supplier.

Subsidy and Documentation Delays

The subsidies have made the product more affordable, but disbursal delays and complex documentation have in the past affected installations. Though simplified by the PM Surya Ghar portal, it has to be complemented by prompt subsidy transfers and ease of user interaction, e.g., tracking applications and multi-language support, to enhance household confidence.

Quality and After-Sales Concerns

Low-quality installations and inconsistent service continue to be issues in smaller cities. When systems perform below expectations because of low-quality components or incorrect installation, consumer confidence in the technology is lost. Using BIS-certified equipment, instituting minimum warranty terms and establishing local service centers can ensure quality standards and give consumers confidence.

Digital and Information Barriers

For most end-users, it may be difficult to navigate portals, learn approved load requirements, and decide between net or gross metering. Households would be dropped from the process if they are not guided clearly. Facilitating training for local facilitators and establishing help desks at wards or offices will make the steps easy to execute. Regional language chatbots and simple-to-read guides will make access even easier.

The Road Ahead

The challenges for tier 2 and tier 3 cities are very real, and solutions to them will need awareness creation, financial creativity, policy consistency, and reliability of service. By concentrating on specific wards with high solar potential and encouraging group and community plans and offering convenient financing arrangements, rooftop solar can be made more attractive to households.

If the methods are scaled up, India can follow the record of 3.2 GW rooftop installations in the first half of 2025 in its smaller towns and cities and make them the focus of the country's clean energy revolution.

- Jai, CEO, Galo Solar

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