The goal of India’s renewable energy sector to enable the country to procure as much as 50% capacity of electricity generation from non-fossil sources in 2030 is one of India’s commitments. rooftop solar systems become a part of this transition by generating decentralized, sustainable energy. In addition, the government has introduced other incentive measures such as the PM Surya Ghar Muft Bijli Yojana, which gives subsidies of up to 30% to common states and 70% to special ones. Residential users can have the benefit of up to maximum of Rs 78,000 for installations over 3 kW solar system, which makes rooftop solar accessible to many more people.

Policy Framework and Financing Options

For commercial users, the Ministry of New and Renewable Energy (MNRE) provides tax incentives, including accelerated depreciation up to 40%, which supports faster capital recovery. In response to increasing demand for rooftop solar system, banks and NBFCs have introduced specialized financing options, such as zero-cost EMI plans and collateral-free loans. Major banks like Union Bank of India and State Bank of India offer substantial loans with flexible repayment periods, allowing consumers to cover up to 80% of installation costs. NBFCs like Electronica Finance cater to various customers through solar-specific loans, further reducing the financial burden of solar adoption.

Challenges and the way forward

Despite these initiatives, several challenges hinder widespread adoption, particularly the lack of awareness about financial support. A 2021 survey revealed that 40% of households were unaware of solar subsidies and incentives, while complex loan application processes also deter potential users. Simplifying these processes and increasing public awareness through targeted campaigns could significantly boost rooftop solar installations across India.

Innovative Financing Models and Future Outlook

Innovative new financing models such as peer-to-peer (P2P) energy trading, as well as virtual power plants (VPPs), create additional opportunities, as well. P2P trading enables solar system owners to sell the surplus energy to others, in this way creating a decentralized marketplace. The VPPs, which group together power from small solar systems, give more stability to the grid by supplying and demanding balance. Solar lease schemes are also becoming highly sought after, which makes it possible for Residential users to have solar without hefty initial outlays. The ongoing improvement in financial and technical areas paves India the way to the widespread solar rooftop deployment, thus it will be able to play an indispensable role in the achievement of its renewable energy targets.