India’s PM Surya Ghar Muft Bijli Yojana is entering a critical phase as the government tightens oversight of rooftop solar vendors while households race to benefit from subsidies before the current scheme period ends. The Ministry of New and Renewable Energy has temporarily barred 66 vendors from taking new applications after delays in completing rooftop solar installations.
The action comes as Kerala emerges as one of India’s strongest residential rooftop solar markets. The state has received 4.36 lakh applications, while installations have already been completed at 3.37 lakh homes, creating 1,282.27 MW of rooftop solar capacity. Kerala consumers have received ₹2,223.81 crore in subsidies under the programme.
The latest enforcement action is significant for the rooftop solar industry because the current PM Surya Ghar programme has only around nine months remaining, increasing pressure on vendors to clear installation backlogs, MNRE guidelines for PM Surya Ghar Muft Bijli Yojana indicates.
66 Solar Vendors Barred From Taking New Applications
The government has imposed a one-month restriction on 66 vendors that accepted consumer applications but failed to install rooftop solar systems within the required timeframe.
During the restriction period, these vendors cannot accept new applications through the PM Surya Ghar portal. However, they will retain portal access to complete installations for customers already in their pipeline.
The vendors have been given 30 days to clear pending work. The government has also instructed vendors not to retain consumer applications for more than 60 days without a valid reason.
The intervention indicates that installation capacity and execution speed are becoming increasingly important as rooftop solar adoption accelerates. Vendors accumulating applications without sufficient installation resources could create bottlenecks for consumers seeking subsidies.
Kerala Rooftop Solar Installations Reach 3.37 Lakh Homes
Kerala’s performance under PM Surya Ghar demonstrates the scale at which residential rooftop solar has expanded.
The state has generated 4.36 lakh applications, of which 3.37 lakh households have already installed rooftop solar systems. These installations together represent 1,282.27 MW of generation capacity.
Consumers in Kerala have received ₹2,223.81 crore in subsidies.
The latest figures also show how rapidly installations have expanded. At the end of July 2026, Kerala had around 3.17 lakh participating homes, representing 1,203.02 MW of capacity and ₹2,073.8 crore in subsidies, according to report on PM Surya Ghar rooftop solar installations in India.
That means the state added roughly 20,000 rooftop solar homes and around 79.25 MW of capacity within about a month, while cumulative subsidies increased by approximately ₹150 crore, according to report on PM Surya Ghar subsidy and low-interest financing.
Kerala Ranks Fourth in India for PM Surya Ghar Solar Capacity
Kerala has also established a strong position nationally. Recent figures place the state fourth in India in installed capacity under PM Surya Ghar.
Gujarat leads with 3,072.88 MW, followed by Maharashtra with 2,779.79 MW and Uttar Pradesh with 2,643.31 MW. Kerala follows with 1,282.27 MW.
Across India, the programme has received approximately 79.25 lakh applications, while rooftop solar systems have been installed at 54.08 lakh homes. Total installed capacity has reached 16,030.9 MW, with consumers collectively receiving around ₹30,270 crore in subsidies.
Kerala therefore represents roughly 8 percent of the rooftop solar capacity installed nationally under the scheme, despite its relatively small geographic size.
Ernakulam Leads Kerala With Nearly 50,000 Solar Homes
Rooftop solar adoption is not evenly distributed across Kerala.
Ernakulam leads the state with around 50,000 homes participating in the programme, followed by Thrissur with approximately 35,000 homes.
Thiruvananthapuram has more than 30,000 homes, while Kollam has over 25,000. Alappuzha ranks fifth with approximately 25,000 homes.
Malappuram, Kannur, Kozhikode, Kottayam, Palakkad, Pathanamthitta, Kasaragod and Idukki have between approximately 3,000 and 23,000 installations, while Wayanad has fewer than 3,000 homes participating in the scheme.
The district-level numbers highlight significant opportunities for rooftop solar vendors to expand into areas where household penetration remains comparatively low.
PM Surya Ghar Subsidy Reaches ₹78,000 for 3 kW Solar Systems
The financial incentive remains one of the biggest drivers of residential rooftop solar adoption.
Under PM Surya Ghar, consumers installing a 1 kW solar system can receive a subsidy of up to ₹30,000.
The subsidy increases to ₹60,000 for a 2 kW system, while consumers installing 3 kW or larger eligible systems can receive a maximum subsidy of ₹78,000.
Installation costs remain considerably higher than the subsidy amount. A 1 kW rooftop solar system costs approximately ₹60,000 to ₹80,000, meaning the subsidy can cover a substantial portion of the initial investment.
A 2 kW system costs around ₹1.20 lakh to ₹1.60 lakh, against a maximum subsidy of ₹60,000.
Consumers installing a 3 kW system can expect costs ranging from approximately ₹1.80 lakh to ₹2.5 lakh, while receiving a subsidy of up to ₹78,000.
Solar Systems Can Generate Up to 350 Units Per Month
The economics become more attractive when electricity savings are included.
A household consuming around 300 units of electricity per month with a monthly bill of approximately ₹2,400 could install a 3 kW rooftop system capable of producing roughly 250 to 350 units per month, depending on solar conditions and system performance.
A 1 kW system can generate approximately 90 to 120 units, while a 2 kW installation can produce around 180 to 250 units.
Based on estimated installation costs and electricity savings, a 1 kW installation could potentially recover its investment in approximately four years. The estimated payback period is around five years for a 2 kW system and five to six years for a 3 kW installation. Consumers financing systems through loans may require another one to two years to recover their investment.
Vendor Execution Becomes Critical as Subsidy Window Narrows
The restriction imposed on 66 vendors highlights an emerging challenge for India’s rapidly expanding residential solar market: installations must keep pace with applications.
Kerala alone has a gap of approximately 99,000 between the 4.36 lakh applications received and 3.37 lakh homes where installations have been completed. Not every outstanding application necessarily represents a delayed vendor installation, but the difference illustrates the size of the remaining project pipeline.
With only around nine months left in the current programme period, installation capacity, equipment availability, financing and vendor execution will become increasingly important.
For solar EPC companies and rooftop solar vendors, Kerala represents a substantial near-term market. For consumers, however, the government action against vendors underlines the importance of selecting installers capable of completing projects within the required timeframe.
The combination of 1,282.27 MW of installed capacity, 3.37 lakh solar homes and ₹2,223.81 crore in subsidies has already made Kerala a major residential rooftop solar market. The next challenge is converting the remaining applications into completed installations before the existing subsidy window closes.
SHAFANA FAZAL