The government’s Pradhan Mantri Surya Ghar Yojana (PMSGY) has made a significant impact on India’s residential rooftop solar sector, adding around 4.9 GW of capacity in just over a year since its launch, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.

As of July 2025, the scheme has seen strong interest, with over 57.9 lakh applications submitted for residential rooftop solar installations. Despite this rapid growth—nearly fourfold between March 2024 and July 2025—only 13.1% of the target of 1 crore installations has been achieved, and just 14.1% of the allocated INR 65,700 crore (USD 7.5 billion) in subsidies has been released.

These figures suggest that reaching the FY2027 target of 30 GW remains a significant challenge. Gujarat leads the country in installed residential rooftop solar capacity under PMSGY, with 1,491 MW, followed by Maharashtra, Uttar Pradesh, Kerala, and Rajasthan. Together, these five states account for approximately 77.2% of the total 4,946 MW installed under the scheme as of July 2025. The scheme has also focused on policy support and capacity building. Since 2024, a nationwide training program has been launched to train over three lakh individuals, helping vendors, utilities, and financiers enhance their skills.

The “Innovative Projects” component provides grants covering up to 60% of project costs to support pilot initiatives and new business models. Additionally, a digital Domestic Content Requirement has been introduced to verify the use of domestic materials in solar modules, while states and Union territories are encouraged to develop solar cities and model solar villages. However, several challenges remain.

Low consumer awareness and limited access to finance continue to slow adoption, especially in rural areas, where outdated perceptions about high upfront costs and maintenance persist. Fragmented supply chains for key components such as panels, inverters, and mounting structures also cause delays. Experts suggest that establishing clear, time-bound rooftop solar targets at the state level is critical for coherent planning and effective implementation.

The report highlights the need for stronger consumer support systems. Although a grievance redressal mechanism exists, its effectiveness is limited. It is recommended that a district-level escalation framework be established to address subsidy delays, incorrect data entries, or portal issues. State- and district-level facilitation cells could guide households in submitting applications and claiming subsidies, while marketing campaigns and outreach initiatives could raise consumer awareness.

The rooftop solar market also faces fragmented quality and weak end-to-end guarantees. Standardized plug-and-play solutions, including pre-assembled kits with modules, inverters, mounting structures, and cables, could simplify installation and reduce delays. The long-term success of PMSGY will depend not only on the provision of subsidies but also on streamlining digital processes, promoting standardized product solutions, and developing consumer-centric support systems, according to the report authors.