The Indian government is working to accelerate rooftop solar installations in the country through various programs with a focus on the residential segment.

In an exclusive interview with Mercom India, Shreya Mishra, Co-Founder of SolarSquare, a residential rooftop solar solutions firm, explains how the recent programs will help drive the installations in the country and what policy modifications in certain states could help for wider adoption of rooftop solar.

Mishra elaborates on the installation process and the factors customers should consider when installing a rooftop solar system.

Here are the excerpts from the interview:

How do you see the residential segment faring in the upcoming years, considering the new solar programs proposed by the government?

India’s residential solar market is seeing a watershed moment, with consumer awareness being turbo-charged by the recent push from Prime Minister Modi. In the last five years, only about 600,000 homes had adopted solar in the Ministry of New and Renewable Energy’s (MNRE) Phase II subsidy program, with ~130,000-150,000 homes going solar in 2023. With the new target of solarizing 10 million homes in the next three years, it’s a historic inflection point in our industry.

We are also seeing real groundwork in terms of easing solar permits, increased subsidies, and availability of low-interest rate loans for solar.

With Gujarat and Kerala (states contributing most to the current installed capacity) achieving their set rooftop solar targets under the state tenders and programs, which other states do you see following suit?

In the last five years, only states with high government intent to promote solar and easier approvals have seen an industry boom and consumer adoption. With the national push from the PMO, we expect every state to see solar adoption grow. Like any product adoption, states with higher GDP per capita and more populations see bigger market sizes. Solar should be no different if government policy and solar approvals translate to a level playing field across India. After Gujarat and Kerala, Maharashtra, Uttar Pradesh, and Madhya Pradesh are currently among the top five states considering residential solar applications on the national solar portal.

How effective do you think the new subsidies and the PM Surya Ghar program will be in accelerating residential rooftop solar installations? What more can the government do to streamline and achieve the target of 40 GW by March 2026?

I believe PM Surya Ghar Yojana is an example of real governance excellence. There is alignment between the center and states, and there is IT infrastructure to enable smooth execution on the ground via the national solar portal. Subsidies are also supported, and they are smoothly transferred to customer accounts. Now, we are expecting 7% interest rate loans to be available for customers up to 3 kW from nationalized banks. Overall, the entire government machinery has worked towards laying the foundation for India’s target of 10 million homes adopting solar.

To further bolster this program, the most important enabler now will be further easing solar approvals in every state. Currently, in many states, there is still scope for improvement in the approval process. It can take up to 60 days for a consumer to get all approvals and have the solar system up and running. The best approval process is in Gujarat, where the whole process can be completed in just 15-25 days. To make India’s #HarGharSolar dream a reality, solar approvals for homes and residential welfare associations should be 100% online, paperless, and fast-tracked. This will be very important if we want grassroots adoption of solar in every district and city.

Could you share with us a brief step-by-step process a residential consumer needs to follow to set up a rooftop solar system on their homes? What are the various financing options/models available to the consumers?

Step 1 – A customer’s solar journey starts with a free solar consultation with SolarSquare. In this meeting, our solar consultants will survey the customer’s roof and study his electricity requirements to suggest the right solar system size and technology for his home.

Step 2 – We generate a commercial quotation with a 3D design for his rooftop solar. If the customer requires financing, our sales app is integrated with multiple lenders on the backend, and our solar consultants instantly check the customer’s EMI eligibility by entering his PAN Card number in our sales app.

Step 3 – We apply for solar net-metering for the client on the national solar portal. If a customer requires a sanctioned load increase for solar, we also take care of that.

Step 4 – Once a customer’s net-meter approval is received, we will be ready to install it. We send the final detailed design to the client for approval and schedule his installation.

Step 5 – We deliver and install on the same day. Our ready-to-install prefabricated WindPro MountsTM and trained crew enable us to complete the end-to-end installation in just six hours.

Step 6 – We have to get the customer’s net meter tested via DISCOM’s testing lab—post which it is installed on the customer’s home. For final inspection, a DISCOM official visits the client’s site – and during this visit, we can “Switch on” or commission the client’s solar system.

Step 7 – Once commissioning is completed, we upload the client’s “Work completion report” along with his bank details to the national portal. Within 30 days of this step, the client will receive his subsidy from MNRE.

Step 8 – Post installation, we maintain the client’s solar system for the next five years via regular maintenance visits. Our trained technicians take care of the entire system health check, including deep cleaning of panels to ensure top performance at all times.

What are the key factors they must keep in mind while choosing the vendors?

One of the most important criteria for choosing a vendor is the number of years of experience it has in this space. Customers must make sure that they select a vendor that has executed a significant number of installations in their area and has earned positive reviews from existing customers.

A rooftop solar power system requires the vendor to follow sound design practices and have proper engineering expertise to ensure safety and maximum power generation. Customers must ensure their selected vendor has the required expertise in design, civil, mechanical, and electrical engineering.

Before granting a contract to a vendor, consumers must confirm that the installer can provide after-sales service during the plant’s lifetime. “Side business” vendors lack the intent and expertise to provide after-sales support; therefore, clients should avoid them. Customers should select an installer that has both the focus and the resources to stay in this business for an extended period. Customers should choose an installer who ensures procurement of high-quality solar panels from the factory, ensures no quality concerns arise during transit, and performs installation and maintenance in accordance with industry standards. Besides solar modules, the module mounting structure plays a crucial role in ensuring the long life of the rooftop solar system.

Customers must make sure to hire an installer who provides high-quality elevated structures.

What are the pricing models offered in the market based on weather conditions and daylight availability?

Residential solar is sold using the capex model. This means the customer needs to invest upfront in the rooftop solar system. So, irrespective of which city you are in, the cost of solar will be similar, barring some variations due to government permit fees, etc., which can vary from state to state.

However, given that India has 300+ sunny days, the performance of solar is good everywhere in the country from Ladakh to Kanyakumari. Moreover, easy loans are available for customers who opt for solar energy. At SolarSquare, we offer our customers a zero-investment program. By opting for a 60-month EMI scheme – where the client’s downpayment is covered by the subsidy from the government of India and his monthly EMI is covered by his electricity bill savings – the net client has zero investment from his pocket and can enjoy 25 years of free electricity.

How does after-sales service play a role in residential rooftop solar systems?

After-sales service plays a significant role in ensuring the optimum power generation from a rooftop solar system. In India, roofs are subject to a lot of dust and a variety of external weather conditions. Because of the dusty external environment and bird droppings, it is important to ensure regular on-site maintenance of rooftop solar systems. Power generation can drop by 30-40% for an unmaintained system. Moreover, without proper after-sales service, the life of the system can decrease significantly, in some cases by more than 60%. That means a rooftop solar system with a life expectancy of 25 years would work for just 6-8 years if not maintained properly. Even solar panel warranties provided by OEMs are void in the absence of proper maintenance.

When considering rooftop solar systems as an investment, you can expect an internal rate of return (IRR) of 20–25% if the system performs as expected because maintenance allows you to realize that 20–25% IRR, which is crucial.

What are some of the challenges you are having to overcome to grow in this market?

When we started operating in the residential market, the first challenge that we came across was a lack of customer awareness. Households did not know about the advantages of solar energy, and customers lacked basic knowledge. A lot of people mistook solar systems on rooftops for water heaters. They were unaware that solar energy might be used to power a home. There were many myths and misunderstandings that needed to be dispelled.

We created a lot of educational content in the form of short-form videos and blogs and worked with various influencers to create the right consumer awareness. Whenever a customer reaches out to SolarSquare, we help the homeowner understand the right kind of solar system they need. We focus on educating the customer rather than selling him anything.

We also found that mis-selling was common. Residential solar installation is a fragmented and unorganized sector with many local operators and dealers running it as a side business. People were sold used or rejected panels since they didn’t know how to authenticate the warranty or quality of the products. Furthermore, many solar power installations were sold without after-sales support.

If you are purchasing solar, it is critical to get the appropriate after-sales service since, without it, your investment will be lost. We needed to educate people about these issues. The over-commitments and fake promises made by the local operators in terms of expected power generation regularly erode the customer’s trust and confidence in the product category.