Why some states lag in rooftop solar installation despite PM Surya Ghar

India added a record 2.7 GW of rooftop solar capacity in the January-March quarter, but growth remains concentrated in a handful of states.

India's rooftop solar sector is growing at its fastest pace ever. In the January-March quarter alone, the country added a record 2.7 GW of rooftop solar capacity, marking the sector's strongest-ever quarter. With that, India’s cumulative rooftop solar capacity crossed 23.5 GW, bringing it closer to its 40 GW target.

 

Launched in February 2024, the PM Surya Ghar: Muft Bijli Yojana aims to make rooftop solar affordable for households through subsidies of up to ₹78,000 for systems of up to 3 kW. The scheme targets the installation of rooftop solar systems in 10 million homes and has become a key pillar of India's plan to expand distributed renewable energy while reducing household electricity bills.

 

However, India's rooftop solar boom is led by a few states. A report by Mercom India published earlier this week states that Gujarat, Maharashtra, Rajasthan, Kerala, and Uttar Pradesh account for nearly 82 per cent of the country's installed rooftop solar capacity, while other states continue to lag despite being covered by the same scheme.

 

 

 

Why does the gap exist?

 

Several states, including Gujarat, Rajasthan and Haryana, have supplemented PM Surya Ghar with additional incentives, dedicated portals, and simplified approval processes, making rooftop solar more attractive and easier to adopt.

 

But financial incentives alone do not explain the gap.

 

Bhawna Tyagi, Senior Programme Leader at Council on Energy, Environment and Water (CEEW), explained that rooftop solar adoption is increasingly an “intent-to-action” challenge rather than a cost problem.

 

While subsidies have helped accelerate the demand, they are not the primary lever, Tyagi said, adding, “States must look at filling the information gap, which includes knowing about their options, how to act on them and what financing options exist.”

 

In a survey, CEEW found that there is a strong correlation between consumer awareness and willingness to adopt rooftop solar, with many households unaware of available financing options despite expressing interest in installing rooftop systems. The study, published earlier in June, also found that 73 per cent of households that considered rooftop solar too expensive were unaware of financing options.

 

"States like West Bengal, Karnataka and even Haryana, which are below the national average on both awareness and willingness to adopt, should consider building the informational foundation. Awareness is the prerequisite that turns intent into installation," Tyagi said.

 

Beyond incentives and awareness, a broader implementation ecosystem also plays a critical role.

 

“States such as Gujarat, Rajasthan, and Haryana illustrate that increased adoption is influenced not just by extra incentives, but also by streamlined approvals, reliable net-metering, proactive consumer education, Discom involvement, and improved access to financing,” said Hanish Gupta, founder and managing director of Gurgaon-based solar firm Sunkind India.

 

Why the gap matters?

 

Unlike utility-scale solar parks, rooftop solar is a distributed form of power generation, producing electricity where it is consumed. Besides adding renewable energy capacity, it is expected to help households lower electricity bills, reduce transmission losses, ease pressure on distribution networks, and strengthen local energy security.

 

In March, the Union Cabinet approved India's third Nationally Determined Contribution (NDC 3.0), committing to a 47 per cent reduction in the emissions intensity of GDP and 60 per cent non-fossil installed power capacity by 2035. Since most power procurement takes place at the state level, the report noted that these targets cannot be met by a few high-performing states alone.

 

“India's 2035 targets assume every state pulls its weight, and that will not happen on subsidies alone. The states falling behind need functioning distribution utilities, local vendors and consumers who trust that the savings will actually show up on their bills. That might be a question of execution, not ambition,” said Dr Manish Ram, Chief Executive Officer of Climate Compatible Futures.

 

Rooftop solar is among the fastest ways to add clean capacity close to where electricity is consumed. Still, only if adoption spreads beyond a handful of markets, the CCF report stated.

 

Gupta said that the next phase of growth will depend less on introducing new subsidies and more on making rooftop solar “accessible, predictable, and user-friendly” for consumers nationwide.

 

Ultimately, Gupta said, the success of India's rooftop solar programme will be measured not only by the capacity it installs, but also by how widely its benefits are shared.

 

What needs to change?

 

The CCF report suggests that the next phase of India's rooftop solar expansion may require a shift in focus—from introducing more subsidies to improving implementation.

 

The policy response cannot be uniform because the barriers differ across states, Tyagi said.

 

“There is significant potential to expand rooftop solar beyond these (Gujarat, Maharashtra, Rajasthan, Uttar Pradesh, and Kerala) states, but doing so will require differentiated, state-specific strategies rather than a single national playbook calibrated to where each state sits in the adoption funnel," Tyagi said.

 

In states where awareness and willingness to adopt rooftop solar are already high, but installations remain low, the focus should be on reducing procedural bottlenecks and improving affordability, Tyagi explained, adding that for states with low awareness and willingness need to first build the informational foundation through trusted local channels before financial incentives can translate into higher adoption.