The 5 Biggest Obstacles Slowing Urban Solar Installations in India

Solar PV has emerged as the torchbearer for India’s renewable energy revolution, with an active solar capacity of over 127.3 GW as of September 30, 2025. This also means that the sector is preferred renewable choice for India compared to any other source (over twice the installed wind capacity of 53 GW). Despite the commendable progress, while mainstream announcements show an increase in solar capacities, the ground reality often differs, with solar installers facing several structural, technical, regulatory, and financial challenges, especially for rooftop solar in urban settings. That has been reflected in the numbers from the flagship rooftop solar scheme, PM Suryaghar, where actual installed capacity is at under 15% of targets set, with a very low conversion rate between applications and actual installs. 

Top 10 Indian States in RTS Capacity, as on September 30, 2025

Notably, India has achieved roughly 21.5 GW of rooftop solar installation so far, still far below the 40 GW missed target it had set for 2022, one reason behind the launch of PM Suryaghar. As it stands, Gujarat (over 6 GW), Maharashtra (over 4 GW), Rajasthan (~1.8 GW), Kerala (~1.6 GW), and Tamil Nadu (~1.16 GW) are leading India's RTS segment and are also the only GW-club states of India in rooftop solar segment.

Why are the numbers so weak when it comes to urban settings? Here, we look at the top five challenges that have affected (and are still affecting) solar installations in Indian cities.

#1 Building (Space and Structural) Challenges

Dearth of space is a common type of obstruction that solar installers face in urban areas, especially during rooftop solar installations. As buildings and infrastructure dominate the landscape, finding suitable locations for solar panels in cities becomes a logistical puzzle. Rooftops, parking lots, and vacant spaces often need to be increased to meet the growing demand for solar energy.

In addition, the low load-bearing capacities of buildings, generally the older structures, make the additional weight of solar unfeasible for the structure to bear and render it unsuitable.

The Chief Executive Officer - Asset Development of Evolve Energy Group, Karan Singh, highlighted these among the major reasons forcing partial capacity installations “in nearly 40 percent of residential and institutional projects.”

Solectrik Energy seconded the issue and said, “Older residential buildings, especially in central Nagpur and Amravati, often lack the structural strength to support large systems. Around 30–40 percent of inquiries become non-viable after structural evaluation due to these limitations.” Solectrik Energy is a Nagpur-based solar installation firm active in the central Indian region.

To overcome these issues, several firms are adopting customized mounting solutions, including elevated and lightweight aluminum designs.

#2 Shading Issues

Solar panels need direct sunlight to generate renewable power efficiently. Any obstruction casting shadows on panels, such as nearby buildings, trees, or chimneys, can significantly reduce their efficiency and output. In fact, the shading of just 10 percent of the area of a PV system could cause a loss of 50 percent in its  performance.

Soiling, which is a prominent factor contributing to energy loss in certain areas. In regions with frequent dust deposits, the losses may lead up to 5-7 percent.

Thus it becomes important and difficult task for the installers to find a sweet spot for the maximum solar efficiency. To mitigate the shadowing issue, firms nowadays use advanced solar simulation tools, ensuring optimal panel placement. For instance, Solectrik Energy employs tools such as PVsyst and on-site shadow analysis.

In addition, the firms are also deploying microinverters or optimizers to maintain generation efficiency across partially shaded arrays.

#3 Regulatory Confusion

Regulatory hurdles pose a major challenge for solar installers in Indian cities. These include lengthy approval processes, especially in societies governed by regulatory bodies such as local municipal corporations, DISCOMs, and housing societies.

The net metering approvals and load sanctioning frequently delay project timelines. Each authority follows a different documentation and inspection process, which can stretch installation timelines from weeks to months, a big bump for the installers.

“For instance, while Tamil Nadu’s net metering approval can take 30–45 days, in some other states it extends beyond 90 days due to additional inspection layers or procedural ambiguity. This directly impacts commissioning and cash flow timelines,” Singh said.

Moreover, zoning laws and building codes also vary across geographies, affecting the feasibility of solar installations on existing structures.

To overcome these issues, measures like simplifying net metering approvals, expediting subsidy disbursements, and introducing uniform technical standards across DISCOMs are needed. Additionally, a centralized online platform for all documentation could reduce confusion and standardize timelines across districts.

#4 Financial Bottlenecks

Key financial challenges include delayed government subsidies, high customer acquisition costs, and hesitancy among homeowners to make upfront investments.

While the long-term savings from solar energy can be substantial, the upfront costs of installation can be a barrier for some homeowners. In fact, as per a report by Luminous Power Technologies, around 52 percent of Indians would adopt solar energy if offered easy financing or a loan.

Increasing digital marketing and lead conversion costs in metro markets have raised customer acquisition expenses significantly. 

#5 Consumer Trust

Potential consumers lacking trust in solar PV systems and their installations is still one of the major obstacles for solar installation in cities, especially in the residential solar rooftop segment. Potential solar clients remain skeptical due to bad experiences with unprofessional installers or incomplete and inconsistent after-sales service. Moreover, lack of transparency on costs and subsidy payment structures has further eroded consumer confidence and trust.

“The industry-wide quality benchmarks and certification systems for EPC players can help restore consumer confidence,” asserts Solectrik Energy.

Conclusion:  While subsidies have made solar rooftop very attractive, and frankly a no-brainer in cases with high power consumption and available rooftops, that oentration has still lagged points to serious structural issues. Quality and professionalism of installers is a major reason, as customers are usually shocked to see the wide differences in prices quoted  as they have a limited understanding of the inputs involved, especially modules, inverters, quality of structures or even the wires.  LIke electric vehicles, cases of failures linked to poor installs get much woider coverage than the many happy owners seeing real savings every month. 
Financing is obviously a key issue, even though much better access has been enabled over the past year. Long term maintainance is an area that remains one of cocern, as most installers offer a 3-5 year maintainance option, on a product claimed to last for 25 years. Installers that have exited the retail business over the past year, including large firms like Amplus (now Gentari) have also left many customers worried about long term issues, even as existing plants work well.