Solar Firms Seek Battery Storage and Policy Continuity for PM Surya Ghar Next Phase

What India's Solar Industry Is Asking From PM Surya Ghar's Next Phase

India's Ministry of New and Renewable Energy (MNRE) has begun consultations for the next phase of the PM Surya Ghar Muft Bijli Yojana, the flagship rooftop solar programme with a ₹75,021 crore outlay targeting 10 million households by FY27. Industry leaders and researchers are using those consultations to push for three priorities: integrating rooftop solar with battery energy storage systems (BESS), differentiating financial support by household income and installation type, and avoiding abrupt policy shifts.

The scheme has already reached five million households with 14.8 GW of installed capacity and released ₹28,024 crore in subsidies, according to official figures. Under the current utility-led aggregation model, around 1.3 million rooftop solar installations have been sanctioned across 10 states and union territories, aimed especially at households without an owned roof or upfront capital.

Experts such as Alekhya Datta of The Energy and Resources Institute argue that combining rooftop solar with appropriately sized batteries can lift self-consumption, cut grid dependence and reduce electricity bills. Datta favours a hybrid storage architecture spanning household, community or feeder-level, and utility-scale batteries. Rohit Vijay of the Centre for Social and Economic Progress says support could be linked partly to actual discharge during evening and peak hours, when power is more valuable to the system.

SolarSquare cofounder Shreya Mishra says the residential solar market employs 1 million to 1.5 million people and supports more than 30,000 vendors in the PM Surya Ghar ecosystem. She has urged the government to announce policy changes well in advance and to taper subsidies rather than cutting them to zero suddenly, warning that a sudden stop could create a consumer-led dry spell and threaten employment.

Why Battery Storage, Subsidy Design and Continuity Now Dominate Consultations

Battery storage changes the scheme's economics and eligibility

The central policy question is whether BESS becomes a subsidised component of rooftop solar. The practical case is that batteries shift solar use into evening and peak periods, where electricity is costlier and grid balancing more valuable. But the debate is not simply about adding hardware: Teri's assessment points to a layered system of household, feeder-level and utility-scale storage, which would require coordination across consumers, discoms and grid operators. Vijay's suggestion is that financial support could be paid partly on verified discharge during peak hours, an approach that would need communicable inverters or battery management systems conforming to a notified protocol. That is a shift from paying for installation capacity to paying for measurable system value.

Differentiated support is aimed at weaker market segments

Industry experts are asking the government to concentrate assistance where commercial adoption would otherwise stall. Lower-income households would need higher direct assistance and easier access to the existing roughly 7 per cent collateral-free loans, with eligibility drawn from databases such as Pradhan Mantri Awaas Yojana or sanctioned load. The current utility-led aggregation model has already helped expand access to households without roofs or upfront capital, but industry representatives say it remains difficult to implement at discom level. The next phase is therefore being contested around how to make aggregation simpler for utilities without weakening the model's reach.

Policy continuity is an employment and investment issue

The strongest industry message is the risk of discontinuity. Because residential solar now supports more than a million workers and thousands of vendors, sudden subsidy changes would hit sales pipelines and consumer confidence. Mishra's call for subsidies to taper rather than stop abruptly is effectively a request for a managed transition. That aligns with the broader expert view that the scheme should evolve from pure capital subsidy toward a mix of affordable finance, performance-linked incentives and payment for grid services, but the sequence and speed of that shift remain unresolved.

Discom incentives and service quality are now part of the deal

A quieter but material demand is that distribution utilities should be rewarded not only for adding rooftop capacity but also for integration, settlement reliability and use of distributed resources during peak periods. Vijay argues this would make rooftop solar part of distribution planning rather than simply lost electricity sales. The quality agenda is equally specific: an organised after-sales market, an accredited operation and maintenance provider category, standard maintenance contract templates, Suryamitra-certified technicians, and mandatory handover of warranty documents and as-built records at commissioning are all being proposed. These measures would affect how solar companies compete and how consumers experience the scheme after installation.

What Solar Vendors, Discoms and Investors Should Prepare For

For solar vendors and installers:

• Build planning assumptions around a gradual subsidy taper rather than current support levels continuing indefinitely. SolarSquare has explicitly warned that an abrupt cut could trigger a demand dry spell, but no decision has been made on timing.
• Prepare for eligibility rules that may require communicable inverters or battery management systems aligned to a notified protocol if performance-linked BESS payments are adopted. Stock and design choices should not assume any battery will qualify.
• Start positioning for after-sales requirements now: an accredited O&M provider category, Suryamitra-certified technicians, standard maintenance contract templates, and mandatory warranty and as-built record handover are all under discussion.

For distribution utilities:

• Expect pressure to improve how utility-led aggregation is implemented at discom level, especially across the 10 states and union territories where about 1.3 million installations have been sanctioned.
• Incentive redesigns under discussion would reward integration, settlement reliability and peak-period use of distributed resources, not just the volume of rooftop capacity added.

For investors and policy watchers:

• The next phase is still preliminary and no decision has been taken, so treat BESS integration as a likely direction rather than adopted policy. The concrete signal to track is whether MNRE publishes a protocol for communicable inverters or battery systems and how it prices peak-period discharge.