The PM Surya Ghar Muft Bijli Yojana (PM-SGMBY) is set to unlock a significant Rs 1.2 trillion opportunity in India’s solar power industry, according to a report by SBI Capital Markets. The scheme, which aims to promote residential rooftop solar installations, has set an ambitious goal of achieving 30 GW of capacity. By offering substantial subsidies on capital costs, it is expected to shorten payback periods by 4-5 years, thereby encouraging greater adoption of solar energy.
The report highlighted that the initiative could help create a Rs. 1.2 trillion ecosystem, with manufacturers of key components like solar modules, inverters, mounting structures, and electrical components expected to be the main beneficiaries, along with project developers and EPC players. The scheme’s ecosystem is likely to support a range of stakeholders, from component manufacturers to service providers.
Breaking down the opportunity, the report showed that solar modules would capture the largest share, valued at Rs 480 billion, followed by inverters at Rs 275 billion, electrical components at Rs 200 billion, and mounting structures at Rs 90 billion.
The scheme is also proving beneficial for project developers and EPC players, particularly those utilizing the capex model, where customers fund and own the installations, allowing them to capitalize on subsidies.
The report further noted that residential rooftop installations are expected to outpace other segments due to strong policy support, especially in states with high residential electricity tariffs and favorable net metering policies. Non-utility solar segments, such as residential and commercial-industrial (C&I), are gaining momentum due to the declining costs of modules and EPC services.
With the decreasing cost of solar cells, off-grid opportunities are expanding, and it is projected that non-utility solar installations could reach 20 GW annually by FY27.
Currently, five states account for 70% of India’s solar rooftop capacity. Gujarat leads with 4,822 MW, followed by Maharashtra (2,847 MW), Rajasthan (1,415 MW), Kerala (966 MW), and Tamil Nadu (876 MW).
The growth of solar adoption is influenced by factors like industrialization, tariff disparities, state-level incentives, and metering policies. As residential installations continue to rise, PM-SGMBY is expected to play a pivotal role in democratizing green energy and advancing India’s renewable energy targets.
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