India Solar Rooftop Market – Industry Analysis and Forecast (2023-2030)

India Solar Rooftop Market size was valued at USD 5.36 Billion in 2023 and the India Solar Rooftop Market revenue is expected to reach USD 6.17 Billion by 2030, at a CAGR of 15.19 % over the forecast period.
India Solar Rooftop Market Overview
Solar rooftop are the installation of solar panels on the rooftops of buildings or other structures to harness solar energy for electricity generation. This decentralized approach to solar power generation allows individuals, businesses, and communities to generate their clean energy, reducing reliance on traditional grid electricity and contributing to sustainability efforts. Solar rooftop systems consist of photovoltaic (PV) panels, inverters to convert solar energy into usable electricity, mounting structures to secure the panels to the rooftop, and often include monitoring systems to track energy production. The top 5 states in rooftop capacity- Maharashtra, Rajasthan, Tamil Nadu, Gujarat, and Karnataka accounted for about 52% of total installed capacity.

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The Indian government has been actively promoting solar rooftop installations through various initiatives and policies. Programs such as the Jawaharlal Nehru National Solar Mission (JNNSM) and the Solar Rooftop Subsidy Scheme aim to incentivize the adoption of solar energy, making it more accessible and affordable for consumers, which significantly boosts the India Solar Rooftop market growth. Tata Power Solar, India’s largest integrated solar player, emerged as a leader in the industrial and commercial rooftop segment, in the recently released India Solar Rooftop Map 2015 by Bridge to India, a leading cleantech consulting firm. Tata Power Solar also ranked 2 under the residential rooftop space. Initially, rooftop solar projects in India began primarily as captive ventures, with many benefiting from capital subsidies provided by the government. Solar developers typically fulfilled the roles of engineering, procurement, and construction (EPC) contractors, a practice that persists in most cases to this day.
India Solar Rooftop Market Dynamics
Need for renewable energy solutions to boost the Solar Rooftop Market growth

Rooftop solar represents a crucial component of India's solar industry, encompassing on-site solar installations connected in a behind-the-meter (BTM) configuration at consumers' premises, which significantly boosts the India Solar Rooftop Market growth. This approach offers consumers a practical avenue to transition towards greener electricity consumption by accessing cost-effective and environmentally friendly renewable energy directly on-site. As of July 2023, data from the Ministry of New and Renewable Energy (MNRE) indicates that the cumulative installed capacity of rooftop solar in India reached 10.9 gigawatts (GW), comprising approximately 15% of the nation's total solar installations. Prior to the fiscal year (FY) 2019, rooftop solar installations were modest, totaling 1.8GW. The Solar Rooftop market has experienced consistent growth, adding approximately 1.9-2.2GW annually. Projections suggest that FY2024 witness the largest installations on record, with an estimated 4GW expected to be installed, including 2GW already implemented between April and July 2023.

India solar rooftop market is pivotal in realizing the nation's ambitious renewable energy objectives for 2022 and beyond. Despite this, the growth of rooftop solar photovoltaic (RTS) installations in residential, commercial, and industrial sectors lags behind utility-scale solar PV and onshore wind power. Various challenges such as policy complexities, regulatory hurdles, and administrative bottlenecks at central and state levels, coupled with limited financing avenues and the reluctance of utility distribution companies (DISCOMs), impede the rapid expansion of rooftop solar projects.

To tackle these impediments head-on, an online workshop titled "Unlocking the economic potential of rooftop solar energy in India" was organized on October 12, 2020, by the International Energy Agency (IEA) in partnership with the Council on Energy, Environment and Water (CEEW) and the Ministry of New and Renewable Energy (MNRE) of India. This collaborative platform facilitated discussions among policymakers at both central and state levels, business stakeholders, regulators, DISCOMs, and international experts from leading nations in renewable energy, including Australia, Brazil, Germany, and the United States.

Regulatory issues to limit the India Solar Rooftop Market growth

The growth of the India Solar Rooftop market faces significant constraints, primarily stemming from regulatory hurdles. These include inconsistencies in net metering policies across states, which directly impact the financial feasibility of rooftop solar installations. Some state electricity distribution companies (DISCOMs) delay or deny net metering approvals, fearing revenue losses from high-paying commercial and industrial (C&I) consumers. The introduction of Green Open Access Rules in 2022 in certain states has diverted attention and resources away from rooftop solar towards open access (OA) solar projects. State regulators prioritize OA approvals over rooftop solar, exacerbating the challenges faced by the India Solar Rooftop market.

Financing also presents a substantial obstacle to rooftop solar adoption. Compared to utility-scale and OA solar projects, rooftop solar installations are perceived as riskier investments by leading financiers. This perception results in higher interest rates and longer approval times for loans, undermining the attractiveness of rooftop solar, which offers better returns and shorter payback periods, which is expected to restrain the India Solar Rooftop Market growth. To overcome these constraints and stimulate growth in the Solar Rooftop market, regulators are actively exploring alternative business models such as virtual net metering and peer-to-peer (P2P) trading. These innovative approaches aim to address financing challenges and promote wider adoption of rooftop solar energy solutions.

Consumer awareness of solar is still less than 50% at the national level. Awareness in most states is clustered between 30-50% with only three states reporting awareness levels above 60%. The share of awareness in urban areas is slightly higher than that in rural areas, but it is still lower than 50%. High capital cost and limited awareness about the RTS systems are leading barriers across states impacting consumers’ willingness to buy.


India Solar Rooftop Market Segment Analysis
Based on Connectivity, the market is segmented into On-Grid, Off-Grid and hybrid. The on-grid segment dominated the market in 2023 and is expected to hold the largest India Solar Rooftop Market share over the forecast period. The segment encompasses solar rooftop systems connected directly to the electrical grid, capable of feeding surplus energy back into it. Recent years have seen remarkable growth in the on-grid segment, driven by escalating demand for grid-connected solar solutions in both residential and commercial domains.

Factors fueling this surge include government incentives, declining costs of solar panels, and heightened awareness regarding the environmental advantages of solar power. Government policies and incentives wield significant influence over the on-grid solar rooftop market landscape. Initiatives such as net metering and feed-in tariffs empower consumers to sell excess energy to the grid, incentivizing the adoption of solar technology. Numerous state governments in India have also introduced subsidies and tax benefits to spur on-grid solar installations.
India Solar Rooftop Market Regional Insight
In 2023, South India emerged as the dominant region within the India Solar Rooftop market, commanding the largest market share. Comprising Andhra Pradesh, Telangana, Karnataka, Kerala, and Tamil Nadu, South India offers a distinctive environment for solar rooftop endeavors. The region's unique characteristics and opportunities significantly influence the uptake and expansion of solar rooftop installations. Benefiting from elevated solar irradiation levels owing to its proximity to the equator, South India stands as an optimal location for solar energy generation.

The abundant sunlight year-round enhances the efficacy of solar rooftop systems, resulting in heightened energy production and shorter payback periods for consumers. South Indian states exhibit a steadfast commitment to renewable energy, exemplified through the introduction of various policies and incentives aimed at fostering solar rooftop installations. These measures encompass net metering, subsidies, tax exemptions, and feed-in tariffs, which is expected to boost the India Solar Rooftop Market growth. Progressive net metering regulations in states like Tamil Nadu and Karnataka incentivize the adoption of grid-connected solar systems.

The region boasts rapidly increasing urban centers, including Bangalore, Chennai, and Hyderabad, which serve as bustling hubs for commercial and industrial activities. The presence of these entities, endowed with ample rooftop spaces, presents substantial opportunities for solar rooftop deployments. Businesses in these areas are increasingly embracing solar power to curtail electricity expenses and showcase environmental stewardship. South India harbors a significant residential market for solar rooftops.

The dense urban population and burgeoning awareness of environmental sustainability have prompted a growing number of homeowners to contemplate solar installations, aiming to diminish their carbon footprint and trim energy bills.
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India Solar Rooftop Market


Report Coverage
Details


Base Year:
2023
Forecast Period:
2024-2030


Historical Data:
2018 to 2023
Market Size in 2023:
US $ 5.36 Bn.


Forecast Period 2024 to 2030 CAGR:
15.19%
Market Size in 2030:
US $ 6.17 Bn.


 Segments Covered:
by Capacity
 1KW to 10 KW
11 KW to 100 KW
Above 100 KW


by Connectivity
On-Grid
Off-Grid
Hybrid


by End User
Residential
Commercial
Industrial



India Solar Rooftop Manufacturers include:
1. Tata Power Solar Systems Limited
2. Amplus Solar Power Pvt. Ltd.
3. Clean Max Enviro Energy Solutions Pvt. Ltd.
4. Sunsource Energy Pvt. Ltd.
5. Orb Energy Pvt. Ltd.
6. Fourth Partner Energy Pvt. Ltd.
7. Mahindra Susten Pvt. Ltd.
8. Growatt New Energy Technology Co. Ltd.
9. Roofsol Energy Pvt. Ltd.
10. Cleantech Energy Corporation Pte Ltd

Frequently asked Questions:

1. What is solar rooftop?
Ans: Solar rooftop refers to the installation of solar panels on the rooftops of buildings or structures to harness solar energy for electricity generation.

2. Which are the top states in rooftop solar capacity?
Ans: Maharashtra, Rajasthan, Tamil Nadu, Gujarat, and Karnataka accounted for about 52% of total installed capacity in 2023.

3. Which company leads in the industrial and commercial rooftop segment?
Ans: Tata Power Solar emerged as a leader in the industrial and commercial rooftop segment according to the India Solar Rooftop Map 2015 by Bridge to India.

4. Why is the commercial segment important in the solar rooftop market?
Ans: The commercial segment is crucial due to its large rooftop spaces and potential for significant cost savings, driven by government incentives and decreasing solar panel costs.

5. Which region emerged as the dominant market for solar rooftop in India?
Ans: South India, including Andhra Pradesh, Telangana, Karnataka, Kerala, and Tamil Nadu, emerged as the dominant region in the solar rooftop market in 2023.