Top 5 Implications of India’s New Rooftop Solar Scheme

PM Modi’s announcement of Pradhanmantri Suryodaya Yojana, has energised industry, with hopes high for a massive impetus to rooftop solar from the scheme. From more funding and subsidies, to opportunities and jobs, the scheme holds potential to be a real gamechanger. We list the top 5 ways it will change the solar landscape in India.

1. Solar Jobs, Lots of them. It has been well researched and placed on record that a thriving rooftop solar market can create 3-5 times the job utility scale solar does. That is what makes its failure to fly in India even more inexplicable. Thankfully, with anything between 6GW to 10GW of installations for the next three years, India will finally see the impact of renewable energy on Jobs in a big way. A year ago, a joint report by three think tanks had revealed that the solar and wind energy sectors in India have added 52,700 new workforce in project development roles in Fy22. This marked an eight-fold jump in the employment in this segment from financial year 2021. The study by the Council on Energy, Environment and Water (CEEW), NRDC India (Natural Resources Defence Council India) and Skill Council for Green Jobs (SCGJ) also predicted that if the renewable growth continues like this, the grid connected solar of 238 GW and wind energy of 101 GW in future will generate 3.4 million jobs of both temporary and permanent nature across areas linked to solar. That future is finally here. Of course, expect a huge struggle to train and deploy the right manpower, but as always, trust Indian entrepreneurs to find a way. From sales to installation to marketing to sundry solar services like financing and management, expect a boom.
2. An Opportunity for India’s laggard states to catch up. Consider Modi’s announcement a final call for India’s laggard states in renewable energy, be it Bihar, UP, West Bengal, or even states like Delhi, Chhattisgarh, Odisha or the North East States, to catch up. By not depending as much on geographic location as utility scale where it can make a huge impact, rooftop solar remains a key pathway for these regions to add renewable to their mix. A generous subsidy and strong central support should make it easier to move ahead now. In fact, it would be a travesty if, in 2026 as well, our rooftop solar market was to remain as skewed as it is today. Importantly, besides a push across government owned buildings, policy initiatives at the local level should support solarisation in urban areas especially,  as mega cities have struggled to do justice to their solar potential as well.
3. Boomtime for Indian manufacturers. As we have noted, despite higher capacity additions, Indian manufacturers were hardly getting the benefit of solar in India, as large developers preferred Chinese imports. With the DCR requirements likely to stay on the new scheme, these manufacturers can finally look forward to better times with higher domestic demand. Retail segment also means possibilities for pricing higher. Schemes like the PMKUSUM scheme which underperformed significantly, as we have documented extensively in this magazine, can finally be replaced with an initiative where distribution and execution will be much faster.
4. India and 20GW plus annual additions are here. Without rooftop solar at scale, India was struggling to add over 15 GW annually for solar, way below the needed 25GW per annum from here to 2030. The new policy will give a solid push towards crossing 20GW for starters in FY25 itself, and perhaps even 25 GW by 2026. That also means, besides barely meeting incremental demand, renewables including solar could actually start to reduce the share of fossil fuel driven energy in the national mix finally.
5. Policy initiatives to make solar accessible to more households. The 1 crore (or 10 million) households target is not overtly ambitious. However, what after it is reached? Consider how these households risk being seen as the privileged few, when seen in the context of the 30 crore households across the country. Especially when after subsidy, their solar systems are likely to pay back the initial investment within 3-4 years. We believe the government will move at some stage to not only make solar accessible to households without a terrace, but also for those in cities, to benefit from community solar, which are larger ground mounted plants that can be owned jointly, besides other models. Distributed solar has already been touted as a key beneficiary, and we look forward to tracking how it can help the truly underprivileged benefit from solar as well,