India’s national programme for solar rooftops, Prime Minister Surya Ghar Yojana (PMSGY), has received a major boost with the World Bank approving almost USD 900 million for the residential scheme, apart from committing to mobilise another USD 4.2 billion from private funding sources.
The World Bank’s Board of Executive Directors has approved the finance for the programme that is expected to bring clean energy to millions of homes in India and create 1.7 million job opportunities across the renewable energy manufacturing, installation and services value chain, says the bank statement accessed by The Plurals.
“The World Bank has been supporting India’s solar rooftop sector for over a decade, mobilising more than USD 2 billion to catalyse market growth from 500 MW to over 27 GW of installed capacity,” said Paul Proccee, World Bank acting country director for India. “This new financing will help India scale up residential solar, while creating job opportunities across the supply chain and installation ecosystem,” he added.
“One crore rooftop solar units, targeted to be achieved by March 2027, will get a significant boost from the latest World Bank support as around 4 million are presently installed,” stated SP Gon Choudhury, a solar expert and advisor to the Union government.
“This is very good news for our state as we expect the fund to support our effort to substantially increase rooftop solar,” said Tapas Roy, state industry and non-conventional power minister, to this correspondent on Friday evening.
Combination of loan and grant
“The financing package for the programme includes a USD 820 million loan from the International Bank for Reconstruction and Development (IBRD), a USD 60 million concessional loan from the Clean Technology Fund, and a USD 10 million grant from IBRD’s Livable Planet Fund (total USD 890 million or INR 8489 crore),” reads the World Bank statement.
“In addition, the World Bank will mobilise USD 4.2 billion (INR 4,00,41 crore) in private financing in the form of commercial loans enabling them to install solar rooftops for households,” the statement adds.
“The programme will transform the residential solar market by removing financial barriers and building the capacity of distribution companies, banks and vendors to deliver integrated service solutions,” said Moez Cherif, task team leader of the programme. “Through collateral-free financing, households can install solar power and significantly reduce their monthly electricity bills,” he added.
Net Zero target to be facilitated
India has announced its aim to achieve Net Zero in carbon emission by 2070 and committed to increase non-fossil-fuel-based energy resources to 60% of its electricity mix by 2035 in its latest Nationally Determined Contribution (NDC 3.0) for the period 2031–2035 as submitted to UNFCCC, the United Nations agency working on climate change. Achieving a high volume of rooftop solar is considered a key to achieving the target.
According to global data, the country has made significant strides in solar energy. It is the third largest producer of solar power in the world, after China and the US, and is among the countries that are adopting the use of solar power the fastest.
According to the latest figures from the Indian government, the country’s non-fossil fuel-based energy capacity grew over 22% year-on-year to 297.36 GW in June 2026. Solar energy comprised 162.15 GW and wind energy 57.44 GW of the total.
A report by the Indian thinktank Council on Energy, Environment and Water (CEEW), based on a survey of 17,094 households across 22 states, finds that “As of 31 May 2026, PMSGY has received 6.9 million applications and 4 million households have been covered under the scheme.” Currently the installed capacity is 11.9 GW, nearly double the entire residential RTS (rooftop solar) capacity built over the preceding decade.
Roof top solar to create jobs
“…Even as large-scale solar has shot up, residential solar adoption is still limited. The government of India established the PM Surya Ghar: Muft Bijli Yojana (PMSGY) programme in 2024 for solar rooftop installation for 10 million rural and urban households nationwide, reduce household electricity costs, and encourage local manufacturing of solar rooftop equipment,” says the World Bank as a premise to support the programme.
The communiqué further points out that the “approved financing (has been made) to accelerate India’s national programme for solar rooftops (and) to bring clean energy to millions of homes and create 1.7 million job opportunities across the renewable energy manufacturing, installation, and services value chain”.
West Bengal catching up
West Bengal, a pioneer in solar in India, was pushed back in the sector in recent decades with experts critical of its solar policy, particularly rooftop solar. “The policy of the earlier state government was not very conducive to promote roof top solar,” pointed out Gon Choudhury, who played a key role in promoting solar to state, as well as in the country.
The expert, however, predicted a role reversal with the new BJP-led state government expressing a key interest in promoting solar in the state, including rooftop solar; and the issue was highlighted in the first budget of the BJP government placed by its finance minister Swapan Dasgupta. In the 2026-27 West Bengal budget, the state government allocated INR 100 crore to install two lakh rooftop solar systems under the central PMSGY programme. The state also announced an additional INR 5,000 subsidy for Scheduled Caste and Scheduled Tribe families to encourage its adoption.
“West Bengal is trying to catch up first. CESC is clearing around 7 to 10 Surya Ghar project proposals every day now, and WBSEDCL has also initiated the effort,” said Gon Choudhury.
“The project gives INR 78,000 subsidy for installing up to 3 kilo watt power, about 40% of the total cost. The individual investment is expected to be neutralised within four years though the solar system is expected to continue for about 25 years,” pointed out the expert.