For most of its existence, electricity has been a one-way street. From the power plant it came, via the grid, to your house. Your meter registered the electrical energy and you paid the bill to the utility.
Rooftop solar turns the consumer into a producer. As at August 26, 2026, more than 50 lakh Indian homes had reaped the benefits of solar installations under PM Surya Ghar with a total rooftop capacity of 14.8 GW being added under the scheme. Nearly 19 lakh homes had recorded zero bills for at least one billing period in the program.
The Economics of a Rooftop Solar Are Not Symmetrical
Until now, electricity flowed from large power plants to consumers. Solar turns the relationship upsidedown.
Your rooftop might generate more electricity than your home needs at midday. Based on the prevailing state electricity rules, the surplus can be sent to the grid and you can get reimbursed. More than 12 lakh PM Surya Ghar households sold electricity worth ₹421 crore during FY2024-25.
Electricity meters may soon register not only the electricity taken from the grid but also the power put into it.
When Calculating Returns, Think of Avoided Electricity
Let's say your home used to buy one unit of electricity from the grid. With rooftop solar, one unit of electricity is avoided. If you can sell that electricity, the value is even greater. Of course, the economics depend on the size of the installation, the extent of sunlight, the cost of the system, any subsidies, tariffs and financing.
And so we turn to the subsidy, which makes rooftop solar affordable. The scheme of 75021 crores has a provision of 28024 crores in subsidies as on early August of this year. Subsidies help cut the initial outlay, letting households see the benefits of solar sooner. Part of the problem with solar purchases was the large up-front payment. Solar was an investment in the future.
The Other Problem Is Financing
PM Surya Ghar beneficiaries can apply for a collateral-free loan linked to the repo rate. The government announced a concession rate of 5.75% for the month of July 2026. Solar financing will reduce the size of the subsidy and spread the costs over several years.
Solar financing helps the homeowner in much the same way as any major purchase. The roof-top solar installation pays for itself over time.
Half a Million Homes Are Coming Online Simultaneously
One home with a solar installation does not change the electricity grid much. But half a million homes do. Rooftop solar installations grew from less than eight lakh homes (cumulative) over the previous decade to more than 50 lakh homes as of August 26, 2026. Over five lakh new beneficiaries were added to the scheme only in July this year.
This means that the grid has to contend with large-scale fluctuations in electricity supply during the day. Solar electricity is largely generated during the day, while electricity demand peaks in the evening when people get home from work and turn on the air-conditioners and hotplates.
Massive adoption of rooftop solar reduces daytime demand but leaves evening demand as high as ever.
The DISCOM Has More Complex Calculations
While the home-owner may find rooftop solar to be the cheapest option available, the local electricity distributing company has other concerns. If the home-owner used to buy lots of electricity, but now buys much less, the DISCOM has to keep the associated infrastructure (poles, wires, sub-stations) in place regardless.
Large-scale rooftop solar installations make it difficult for the DISCOM to recover costs.
Not that the DISCOM is against rooftop solar.
Think of it as a matter of compensation. As more and more big electricity buyers install their own generators and sell back electricity to the DISCOM, the DISCOM has to revisit its electricity tariffs. It's not fair that people who buy much electricity from the DISCOM subsidize those who sell electricity to them. When consumers turn into competitors, electricity pricing becomes much more complicated.
The Grid Provides Insurance
Until now, the electricity grid has been a reliable source of power for the home-owner. With rooftop solar, the home-owner buys electricity from the grid during the evening and uses solar during the day. With a rooftop battery, the homeowner can store some of that daytime electricity for the evening as well. A battery makes the home even more independent from the grid, insulating the consumer from blackouts and helping reduce demand during peak hours. But batteries add complexity and costs.
The ideal home with rooftop solar would have to choose between keeping costs as low as possible, having electricity stored for use during the evening or having the ability to recoup the costs by selling surplus electricity to the DISCOM during the day.
A Roof Has Converted Into an Asset
The rooftop is no longer just a place to put your satellite dish or a TV antenna. Over your lifetime it may provide you with valuable electricity.
As long as the sun shines on it, it can be an electricity generator. Rooftop solar transforms one of the largest possessions (the roof over one's head) into an income statement. It is hard to think of a greater value than that. Of course, the transformation is not readily apparent since not much else about the house has changed. There is no smoke coming out of it, no great machinery to hear, see or feel. Only the sun shining on a surface that used to provide shade turned electricity.
India used to have an electricity system in which millions of consumers bought electricity from a few power producers. Rooftop solar turns the consumer into a producer as well. The power plant is no longer a distant entity; sometimes it is in your neighbour's home.