India’s Rooftop Solar Jumps Over 4 GW Under PM Surya Ghar Yojana, But Targets Still Distant, Says Report

India’s residential rooftop solar segment has surged, adding about 4.9 GW capacity within a year of the Pradhan Mantri Surya Ghar Yojana (PMSGY) launch, according to a new joint report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.

As of July 2025, the scheme has seen 57.9 lakh applications for rooftop solar installations, marking a near fourfold jump since March 2024. Despite this momentum, progress toward the 1 crore (10 million) installation target remains modest, with only 13.1 percent of installations completed and 14.1 percent of the INR 65,700 crore (USD 7.5 billion) subsidy released.

Gujarat leads the nation with 1,491 MW installed rooftop capacity, followed by Maharashtra, Uttar Pradesh, Kerala, and Rajasthan, together accounting for 77.2 percent of the total 4,946 MW under the scheme.

“PMSGY has steadily expanded its policy framework to speed up residential rooftop solar adoption,” said Jyoti Gulia, Founder, JMK Research. “Since 2024, it has launched capacity-building initiatives to train over three lakh people and upskill vendors, utilities, and financiers, added Gulia.

The report notes that the scheme’s 'Innovative Projects/ component funds pilot projects with grants covering up to 60 percent of costs, while a new digital Domestic Content Requirement (DCR) ensures verified use of Indian-made solar materials. States and UTs are also being urged to develop solar cities and model solar villages.

However, barriers persist. “Low consumer awareness and limited access to finance remain key challenges,” said Prabhakar Sharma, Senior Consultant at JMK Research. “Misconceptions about high upfront costs still discourage rural consumers. Fragmented supply chains for panels, inverters, and mounting structures have also slowed implementationm,"  said Sharma.

Vibhuti Garg, Director, IEEFA, South Asia, emphasised the need for state-level capacity targets and a cohesive policy framework. Meanwhile, Aman Gupta, Research Associate at JMK Research, called for a district-level grievance escalation system to address subsidy delays and data errors.

The authors also recommend local facilitation cells to guide applicants and stronger marketing campaigns to boost adoption. Promoting standardised plug-and-play solar kits could further streamline installations and improve product quality.

The report concludes that the long-term success of PMSGY will depend not only on subsidy allocation but also on digital efficiency, standardised systems, and consumer-focused execution.