New Delhi: India’s flagship rooftop solar installation scheme targeted at households across the country – the Pradhan Mantri Surya Ghar Muft Bijli Yojana – is lagging behind on its expected targets. According to a recent report by research institutes including the Institute for Energy Economics and Financial Analysis, as of July 2025, the national installation-to-application conversion ratio under the flagship scheme was just 22.7%.

According to energy researchers, the Union government has to implement several more actions to promote the scheme, such as defining a time-bound roadmap for state rooftop solar adoption, strengthening grievance redressal mechanisms and more.

The PM Surya Ghar Muft Bijli Yojana

Launched by Prime Minister Narendra Modi in February 2024, the PM Surya Ghar: Muft Bijli Yojana aims to provide free electricity to households by facilitating the installation of rooftop solar panels through means such as subsidies. For instance, households can claim subsidies of up to 40% in rooftop solar installations by applying under the scheme.

The scheme aims to supply solar power to one crore households by March 2027. According to a press release by the Ministry of New and Renewable Energy (which implements the scheme) in December 2024 (nine months after the scheme was introduced), installations under the scheme were expected to exceed 10 lakh by March 2025. By October 2025, this number was to double, reaching 40 lakh installations by March 2026, and ultimately achieving the target of one crore installations by March 2027. 

As of October 28, according to data available on the website of the Ministry of New and Renewable Energy (which implements the scheme), the total number of applications that the scheme has received is 64,05,194. This has translated to as many as 17,14,498 installations across 21,52,303 households across the country. The 17.14 lakh installations so far clearly fall short of the expectations for October this year (when installations were expected to number at least 20 lakh per estimates provided by the government itself).

So far, 6,386.46 megawatts (which translates to around 6.3 gigawatts) of household rooftop solar installations have been made. And the government has already released some serious amounts of money for this – money to the tune of Rs.12,253 crores.

Lagging behind

According to a recent report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research and Analytics, the PM Surya Ghar Muft Bijli Yojana is not really doing too well. While rooftop solar installations were mainly restricted to commercial and industrial sectors till 2024, the launch of the scheme in February 2024 was meant to plug the gap in the residential sector and address issues such as high initial costs and lack of awareness among citizens.

Per the report, the scheme addressed this gap by offering capital incentives and simplified procedures to make rooftop solar financially attractive to households. 

But despite an almost four-fold increase in applications between March 2024 and July 2025, only 13.1% of the target 1 crore installations had been completed, and just 14.1% of the allocated Rs. 65,700 crore in subsidies were released, the report said. 

“In this scenario, the FY2027 target continues to be viewed as a considerable challenge,” it noted.

Of course, a simple comparison of numbers such as the government estimates cited above and the number of installations listed by the MNRE as of October this year – clearly show that the scheme is still lagging behind with respect to targets.

Per the report, as of July 2025, the national installation-to-application conversion ratio under the scheme stood at just 22.7%, “underscoring the challenges in translating demand into actual residential rooftop solar capacity”. 

Some states, meanwhile, are doing far better than others. Per the report, Gujarat and Kerala lead with high conversion ratios of above 65%, “supported by a mature solar ecosystem, strong vendor base and high consumer awareness”.

The IEEFA and JMK report, published on October 17, said that as of July 2025, the scheme had installed only 4.9 gigawatts (GW) of rooftop solar across approximately 1.6 million (around 16 lakh) households. (Currently, as of data accessed on the MNRE website on October 28, that number is 6.38 GW across 21.5 lakh households.)

Government needs to step in

To accelerate residential rooftop solar deployment, several states have implemented financial incentives that either supplement the central subsidy or independently support consumers, the report also noted. States like Assam, Delhi, Goa, Uttar Pradesh and Uttarakhand have introduced direct capital subsidies to offset high upfront installation costs.

Another positive sign per the report is that more vendors have begun taking interest in facilitating domestic rooftop solar installations. The number of empaneled vendors under the scheme surged from 6,552 in July 2024, to over 40,000 by July 2025, marking a six-fold rise, the report noted. 

“Uttar Pradesh, Maharashtra, and Gujarat together accounted for more than 9,000 vendors, highlighting the growing interest of regional players, even though the number of vendors relative to application numbers remains low. This expansion has been driven by higher consumer awareness and greater visibility of the residential rooftop market,” the report noted.

According to energy researchers, the union government has to implement several actions to promote the scheme. These include defining a time-bound roadmap for state rooftop solar adoption, strengthening grievance redressal mechanisms, improving consumer awareness about solar rooftop installations for houses, and others.

Low consumer awareness and access to finance are still significant barriers to the adoption of rooftop solar, said Prabhakar Sharma, senior consultant, JMK Research, and a co-author of the report.

“Outdated perceptions of high upfront costs and maintenance persist, especially in rural areas,” he said in a statement. 

Fragmented supply chains for key rooftop solar components, such as panels, inverters, and mounting structures, also cause implementation delays, the report highlighted. 

“To unlock its full potential, PMSGY [the scheme] must address challenges around subsidy disbursements, digital processes, consumer awareness, and domestic supply chain readiness,” the report recommended.

“Streamlining approvals, upgrading digital platforms, and building stronger awareness campaigns will be essential to ensure smoother conversion of applications into installations…If these measures are prioritised, the scheme can create a more predictable investment environment and establish India as a competitive hub for rooftop solar solutions,” the report noted.

“Establishing clear, time-bound rooftop solar capacity targets at the state level is essential for creating a coherent vision and ensuring effective policy execution,” Vibhuti Garg, Director, IEEFA - South Asia, and a contributing author, said in a statement.

Importance of rooftop solar

Rooftop solar – across industrial, commercial and residential (or domestic) sectors – is crucial for India in its clean transition journey to reach its renewable power targets as promised under its official Nationally Determined Contributions. According to one study in 2023, the rooftop solar potential in India is around 42 GW – a number that needs to be reassessed regularly given latest technological advancements, policy changes, increasing population and urbanisation.

As of March 31 this year, the total installed rooftop solar capacity in India was 11.87 GW, per the Ministry of New and Renewable Energy. 

According to government estimates, India’s cumulative solar power capacity stood at 119.02 GW as of July 2025. This includes 90.99 GW from ground‑mounted solar plants, 19.88 GW from grid‑connected rooftop systems, 3.06 GW from hybrid projects, and 5.09 GW from off‑grid solar installations.

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