Power subsidies are slowing household solar adoption. A solution: More subsidies

📌 Summary:

• Solar now accounts for close to 30% of India's total installed electricity capacity; India added over 50 GW in two years and, in 2025, added more solar than any country except China
• Two flagship decentralisation schemes — PM Suryaghar (rooftop) and PM-KUSUM (farm pumps), with a combined budget of about Rs 95,000 crore — have installed only ~13 GW against a 40 GW target by year-end
• PM-KUSUM's most successful component: 10.9 lakh standalone solar water pumps installed against a 14 lakh target
• Core problem (causal chain): several states give free or heavily subsidised power, so consumers have no incentive to pay high upfront rooftop costs, leading to low adoption. Punjab (300 free units to homes + free agricultural power; Rs 20,000 crore subsidy bill) has low uptake; Tamil Nadu, Karnataka and Delhi are similar
• Best performers — Gujarat, Maharashtra, UP, Kerala and Rajasthan — account for ~70% of the ~33 lakh rooftop installations; Gujarat, Kerala and Maharashtra have higher tariffs that make solar financially attractive
• Parliament's Estimates Committee flagged the issue; the MNRE confirmed that near-zero effective tariffs deter adoption, since the few-lakh-rupee upfront cost is recovered only slowly
• Paradoxical solution: states like UP and Rajasthan succeed despite subsidies by offering extra financial incentives on top of scheme support — effectively "more subsidies" to overcome the subsidy trap

🎯 UPSC Relevance: GS3 — renewable energy transition, decentralised solar, power-subsidy distortions and DISCOM finances.

📝 Prelims Facts:

• Solar is ~30% of installed capacity; India was 2nd after China in 2025 solar additions
• PM Suryaghar (rooftop) + PM-KUSUM (farm pumps); combined budget ~Rs 95,000 crore; ~13 GW done vs 40 GW target
• MNRE = Ministry of New and Renewable Energy; Parliament's Estimates Committee reviewed the schemes

🔑 Key Term: PM-KUSUM — scheme to solarise agriculture through standalone solar pumps, grid-connected pumps and feeder-level solarisation.