NEW DELHI: India’s energy transition is increasingly becoming a household-budget story. For a middle-class family, energy expenses extend far beyond the monthly electricity bill. A two-wheeler owner may spend Rs 3,000-5,000 every month on petrol. A household using one LPG cylinder spends Rs 850-950. During summer, electricity bills often double as air-conditioners and cooling appliances run longer hours.
Electrification is intended to reduce that exposure. The principle is simple: replace recurring expenditure on imported fuels with domestically generated electricity. For households, rooftop solar represents perhaps the clearest example of an affordability gap that still needs to be bridged. The PM Surya Ghar programme has crossed 4 million rooftop solar installations, with the government targeting 10 million households. The scheme offers subsidies of up to Rs 78,000 and is designed to help consumers reduce electricity bills while contributing surplus power to the grid.
For a household consuming 300-400 units a month, rooftop solar can significantly reduce power purchases from the distribution company. Depending on consumption patterns and state tariffs, families can save thousands of rupees annually. Over 20-25 years, cumulative savings can far exceed installation costs.
Yet rooftop solar still covers only a small fraction of India’s more than 300 million households. The reason is straightforward. Even after subsidies, a residential rooftop system requires an upfront investment running into tens of thousands of rupees, forcing many households to either dip into savings or seek financing.
“Consumers understand the long-term savings. The challenge is affordability at the point of purchase. Most households evaluate the immediate cost before they evaluate twenty years of electricity savings,” said an analyst tracking the distributed-solar sector.
Industry executives cite limited consumer awareness, financing constraints, inconsistent net-metering regulations, approval delays and concerns over installation quality as key barriers. Urban housing patterns create another hurdle. A large share of India’s urban population lives in apartment complexes where rooftop ownership is fragmented, limiting the scope for individual installations.
Experts believe rooftop solar combined with battery storage could transform household energy consumption over the next decade by allowing consumers to store excess daytime generation and use it after sunset, when demand peaks and tariffs are often higher. However, despite sharp declines in battery prices, residential storage remains expensive. Adoption is expected to accelerate only as costs fall further and financing options improve. The affordability debate is even more relevant in rural India. The PM-KUSUM scheme has emerged as one of the country’s largest consumer-facing renewable-energy programmes. Government data show more than 1 million standalone solar pumps have been installed and nearly 1.3 million agricultural pumps solarised.
For farmers, the benefits are immediate. A diesel pump consuming four to five litres daily can cost Rs 450-550 a day at current diesel prices, making fuel one of the largest recurring cultivation expenses. A solar pump largely eliminates that cost. In some states, farmers can also sell surplus electricity generated by solar installations back to the grid, creating an additional income stream.
Yet adoption has been slower than originally envisaged. Industry stakeholders cite subsidy delays, financing constraints, procurement bottlenecks, land-related challenges and varying levels of state participation. “The economics are not the problem. Farmers understand the savings immediately because they buy diesel every week,” said an analyst tracking rural-energy markets. “The challenge is helping them finance the transition.”
The experience of rooftop solar and KUSUM highlights a broader reality: India has largely solved the challenge of generating cheap renewable electricity. The harder task is enabling consumers to access it. The same pattern is visible across the wider electrification landscape. Electric scooters are cheaper to run than petrol vehicles but typically cost more upfront. Induction cooking and battery-storage systems face similar adoption hurdles.
While the long-term economics are increasingly favourable, short-term affordability remains uncertain. According to Atanu Mukherjee, CEO, Dastur Energy, India’s electricity demand could rise 25-30% by 2030 and 60-70% by 2040, driven by electric mobility, air-conditioning, manufacturing, digital infrastructure and rising living standards. The Indian Gas Exchange recently reported a nearly 350% surge in gas sales to power companies between April and May, underlining electricity’s growing role in the economy.
“Renewable energy is now being viewed not only as a sustainability imperative, but also as a strategic tool to reduce exposure to global fuel price volatility and strengthen long-term industrial competitiveness,” said Ishaan Chandra Saxena and Alekhya Datta of TERI. There is a paradox at the heart of the transition. India has succeeded in making renewable electricity cheap. Utility-scale solar tariffs have fallen to around Rs 2.5-2.6 per unit, wind power is typically contracted at Rs 3-4 per unit, hydropower generally ranges between Rs 4 and Rs 6 per unit, while new coal-based generation often costs Rs 4-5 per unit.
Yet most residential consumers continue to pay Rs 6-10 per unit once transmission, distribution, network and cross-subsidy costs are added. Analysts argue that electrification becomes most compelling when consumers can directly access low-cost renewable energy through rooftop solar, solar pumps, battery storage and other distributed-energy systems.
India has largely won the battle to produce affordable clean power. The next challenge is ensuring households can use it. Ultimately, the success of the energy transition will be measured less by gigawatts installed than by whether families can afford rooftop solar, farmers can install solar pumps, and consumers genuinely see lower energy bills at the end of the month.
Source: The Financial Express
