Gujarat, Maharashtra, Rajasthan Dominate India’s Rooftop Solar Market

Gujarat, Maharashtra, and Rajasthan are leading India's rooftop solar market, collectively accounting for 56% of the country's total installations in fiscal 2024, up from 37% in fiscal 2019, according to Crisil Research. 

Gujarat leads the trend with 31% of the additions, followed by Maharashtra (19%) and Rajasthan (10%). The report attributed this to favourable policies, including Gujarat's Surya Urja Rooftop Yojana and Maharashtra's clear net metering regulations, which have accelerated consumer adoption.

In contrast, states such as Tamil Nadu, Karnataka, and Uttar Pradesh have seen their share of installations decline due to restrictive policies and implementation challenges, the report found. 

Tamil Nadu, for instance, has imposed limitations on grid interaction and revoked net metering for commercial and industrial consumers, affecting adoption rates.

Residential Segment To Drive Solar Growth

India's rooftop solar capacity is expected to see robust growth, with installations projected to reach 25-27 gigawatt between fiscal 2025 and 2029. The residential segment is anticipated to lead this expansion, contributing 14-15 gigawatt, driven by government initiatives such as the PM Surya Ghar Yojna.

Under the scheme, residential consumers are eligible for subsidies of up to Rs 38,000 per kilowatt for rooftop solar installations, while housing societies can receive Rs 18,000 per kilowatt for systems up to 500 kW. This is supported by a budgetary allocation of Rs 76,250 crore for fiscal 2025 to accelerate adoption.

Crisil noted that central initiatives like the MNRE's national portal have streamlined the application process and provided transparent information about empanelled vendors. This simplification is expected to boost adoption, particularly in rural areas and states facing load shedding. For instance, a 3 kW residential rooftop solar system under the PM Surya Ghar Yojna could yield annual savings of approximately Rs 15,000.

Investment Outlook

India's rooftop solar segment is projected to attract Rs 1.3 lakh crore in investments over the next five years. While the country fell short of its 40 GW rooftop solar target by 2022 under the National Solar Mission, the combination of supportive policies, state-level initiatives, and increasing consumer awareness signals a positive trajectory for the sector, according to the report.