What are the Top 10 Countries in Rooftop Solar PV Development?

Global Perspectives on Rooftop Solar Energy

A Deep Dive on How Leading Economies Advance Rooftop Solar Energy Adoption

09 September, 2024 | Energy Transitions

Bhawna Tyagi, Debanjan Bagui, Arohi Patil, Kumaresh Ramesh, Aryadipta Jena, and Megha Chaudhary

Suggested citation: Tyagi, Bhawna, Debanjan Bagui, Arohi Patil, Kumaresh Ramesh, Aryadipta Jena, and Megha Chaudhary. 2024. Global Perspectives on Rooftop Solar Energy: A Deep Dive on How Leading Economies Advance Rooftop Solar Energy Adoption. New Delhi: Council on Energy, Environment and Water.

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Overview

This report primarily focuses on the distributed solar segment, especially rooftop solar (RTS), across consumer categories. We selected the top ten countries leading in distributed solar PV deployment (as of 2022) for our study: China, Germany, the United States (US), Japan, Australia, Italy, Brazil, India, and Vietnam. However, Turkey was excluded due to the unavailability of information in the public domain. The report provides a comparative analysis of RTS development across nine top-performing countries.

This report delves into the success stories of these leading economies and critically analyses their RTS development to draw valuable insights from their experiences. Insights from these countries can inform strategies in other countries aiming to scale up RTS deployment and facilitate the transition towards a cleaner and more resilient energy future.

Key findings

China leading the global distributed solar segment with a total installed capacity of 225 GW, followed by Germany (~51 GW) and the US (47 GW) as of 2023.
Key factors that accelerated the adoption of RTS in leading economies include policy and regulatory support, diverse and targeted financial mechanisms, innovative business models, and supported by technological advancements leading to a reduction in the cost of solar modules.
Countries such as the US, Italy, China, and Japan have successfully implemented Feed-in tariff schemes through a phased approach, gradually reducing the FiT rate while ensuring market demand remains high in the distributed PV segment. However, Vietnam installed a record capacity of ~9 GW in a year (2020), driven by a generous FiT scheme. However, challenges such as a lack of a long-term policy framework, inadequate energy infrastructure, and limited grid capacity led to the eventual discontinuation of the FiT scheme despite its initial momentum.
Countries rolled out inclusive programmes to tap into RTS potential across consumer categories. For example, the Solar Energy for Poverty Alleviation Programme (SEPAP) in China, the Social Renewable Energy Development Programme (PERS) in Brazil, and the PM Surya Ghar: Muft Bijli Yojana in India.
Tax credit programmes have also emerged as a critical instrument in developing the RTS segment across countries. For instance, federal tax credits in the US. Similarly, under the “Super Bonus Scheme” in Italy, approximately 12,200 applications had been approved by the government which significantly boosted the growth of the sector.
Innovative concepts such as balcony solar, tenant electricity models, and energy cooperatives in Germany; small-scale technology certificate (STC) schemes in Australia; and net metering schemes in Brazil have been crucial for driving RTS adoption across countries. Under the balcony solar scheme, Germany has seen substantial growth in installations post-2021, reaching a cumulative capacity of approximately 250 MW till March 2024. While an innovative energy credit net metering approach, the residential segment (~48%) leads distributed solar deployment in Brazil.
Countries streamlined the RTS adoption process through initiatives such as the SolSmart programme and SolarAPP+ in the US, PM Surya Ghar Portal in India, etc. In addition, initiatives such as the Solar Panel Validation Initiative in Australia helped to create a conducive vendor ecosystem.

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Bhawna Tyagi

Programme Lead

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“Rooftop solar offers a unique opportunity to empower residential homes to achieve energy independence while promoting a people-centric and inclusive transition. Around the world, while some countries are just beginning to realise the potential of RTS, others have already embraced this energy transition. To build on this momentum, countries need to formulate inclusive strategies, targeted awareness campaigns and policy incentives, a conducive vendor ecosystem, and streamlined processes and regulations.”

Executive Summary

Across the world, increasing populations, expanding manufacturing capacities, and rising living standards have led to a higher demand for electricity. According to International Energy Agency (IEA) projections, global electricity demand is expected to increase by 75 per cent by 2050 (IEA 2022). Simultaneously, geopolitical disruptions, such as the Russia–Ukraine conflict and the economic rebound following the COVID-19 pandemic, have heightened the need for nations to transition from fossil fuels to renewable energy (RE) sources. In 2023, the global RE installed capacity increased by 50 per cent compared to the previous two years (IEA 2024). Solar photovoltaic (PV) technologies, particularly distributed solar, are well positioned to play a critical role in this global energy transition. Leading economies such as China, the United States (US), Japan, and Australia use distributed solar or rooftop solar (RTS) as an instrument to enhance energy security and facilitate the energy transition, aiming to achieve their net-zero goals. Distributed solar also offers an opportunity to improve electricity access in developing countries, where approximately 760 million people still lack electricity, especially in sub-Saharan Africa (IEA 2023). Rooftop solar systems can be integrated into buildings, avoiding land conflicts and providing a decentralised and sustainable solution. This allows consumers to generate low-cost energy on-site while increasing overall system efficiency by reducing transmission and distribution losses.

This report primarily focuses on the distributed solar segment, especially RTS, across consumer categories. We selected the top ten countries leading in distributed solar PV deployment (as of 2022) for our study: China, Germany, the US, Japan, Australia, Italy, Brazil, India, and Vietnam. However, Turkey was excluded due to the unavailability of information in the public domain. The report provides a comparative analysis of RTS development across nine top-performing countries. Insights from these countries can inform strategies in other countries aiming to scale up RTS deployment and facilitate the transition towards a cleaner and more resilient energy future. However, the definition and size limit of distributed PV systems vary across countries. In this report, considering the prevailing regulations in the countries selected for our study, PV systems with a capacity of under 6 MW are considered as distributed PV.

A. Key drivers accelerating deployment across countries

Several factors have accelerated the adoption of RTS in leading economies. Policy and regulatory support have been instrumental in driving market growth, while diverse financial mechanisms and innovative business models have played a significant role in this transition. Meanwhile, technological advancements have reduced the cost of solar modules, making rooftop installations more economically viable. The following are some of the key drivers:

Feed-in tariffs (FiT) and feed-in premiums (FiP) programmes have significantly contributed to the rapid expansion of RTS by improving the economic viability of systems during the early stages of the industry. Countries such as the US, Italy, China, and Japan have successfully implemented these schemes through a phased approach, gradually reducing the FiT rate while ensuring market demand remains high in the distributed PV segment. In contrast, Vietnam’s FiT scheme failed; the lack of a long-term policy framework, inadequate energy infrastructure, and limited grid capacity led to the eventual discontinuation of the FiT scheme despite its initial momentum.
Diverse financial mechanisms, such as capital subsidies for the residential segment and financing options, including low-interest loans, have enhanced consumer access to RTS. For instance, India provides capital subsidies for residential consumers of up to 3 kW. China and Japan have adopted similar approaches, whereas the US, Brazil, and Germany offer low-interest loans to consumers.
Dedicated programmes have been adopted launched by countries to tap target the lowerincome consumer segment, such as the Whole County PV Programme and the Solar Energy for Poverty Alleviation Programme (SEPAP) in China, the Social Renewable Energy Development Programme (PERS) in Brazil, and the PM Surya Ghar: Muft Bijli Yojana in India.
Tax credit programmes have also emerged as a critical instrument in developing the RTS segment across countries. For instance, federal tax credits in the US, such as the Ecobonus Decree, and the Super Bonus Scheme in Italy, have significantly contributed to creating markets in these respective countries. Unlike other countries, Vietnam provided tax exemptions to solar developers rather than consumers which significantly boosted the growth of the sector.
Business models such as third-party ownership and power purchase agreements (PPAs) have also expanded consumer access to RTS systems. The introduction of innovative concepts such as balcony solar, tenant electricity models, and energy cooperatives in Germany; small-scale technology certificate (STC) schemes in Australia; and net metering schemes in Brazil, which offer energy credits instead of monetary compensation, have been crucial for driving RTS adoption across countries.
Streamlining the application procedure has boosted RTS adoption in many countries. For instance, the US has implemented initiatives such as the SolSmart programme and SolarAPP+, and India has developed a dedicated solar rooftop portal with a consumer-centric approach by providing ease to access information through a single national portal. Additionally, programmes such as solar accreditation, including the Solar Panel Validation Initiative in Australia, and the vendor rating programme in India, have supported the creation of a robust RTS ecosystem.

Leading economies are also investing in grid infrastructure and distributed renewable energy (DRE) integration to increase the share of RTS in the electricity mix, achieve their net-zero emission goals, and build a more sustainable future.

B. Key recommendations for scaling up rooftop solar deployment

The global push for RE has prompted numerous countries to develop robust RTS programmes crucial for their energy transition and net-zero commitments. Insights from these leading economies offer valuable insights and strategies for other countries to accelerate their RTS deployment.

Demand creation through consumer engagement and innovative business models. To accelerate the adoption of RTS, governments and RE agencies must undertake targeted consumer awareness campaigns to disperse information in an easy-to-understand way and deliver clear calls to action, as seen in the successful Solarise campaigns in the US and Delhi. Creating comprehensive national online platforms, such as India’s PM Surya Ghar: Muft Bijli Yojana, can also help streamline communication on incentives, policies, and application processes. Finally, innovative business models, such as community solar programmes, landlordto-tenant electricity supply, and plug-in balcony solar PV systems in Germany, can help overcome challenges related to high upfront costs and limited roof space, thereby making solar energy more accessible to a wider range of consumer categories.
Leverage policy levers to unlock rooftop solar potential. Governments must accelerate RTS adoption by introducing targeted incentive mechanisms, such as FiT and capital subsidies, with a straightforward phase-down approach, as seen in Japan, Germany, and Australia. Affordable and inclusive financing options, such as Brazil’s low-interest credit and China’s zero-cost financing, 3 are essential for making solar systems economically viable. Adopting inclusive solar programmes, such as the US’s Solar for All and China’s rural poverty alleviation initiatives, can ensure equitable access to solar energy across different income classes and regions. Additionally, mandates requiring new government, residential, and commercial buildings to install RTS systems, as implemented in Germany and Vietnam, can significantly drive adoption.
Incentivise rooftop solar adoption through regulatory interventions. To promote RTS adoption, regulatory authorities should develop metering arrangements such as net metering, net billing, and virtual net metering to compensate consumers for excess energy generation. These transitions should be evidence-based and involve public consultations, as seen in the recent shift towards self-consumption and battery storage in California (US). India introduced net metering in 2012, and various states have since adopted and amended regulations to implement newer systems. A conducive regulatory environment is also essential to support innovative models such as virtual net metering in rural areas in India and simplified rules for balcony solar in Germany to overcome barriers related to limited roof space and ownership issues.
Create an enabling ecosystem to ensure ease of implementation. To expedite RTS adoption, local governments and utilities should automate and streamline the permit application process, as seen with SolarAPP+ in the US, which significantly reduced permit processing time. Implementation agencies can leverage existing government programmes, such as Brazil’s Minha Casa Minha Vida social housing programme, to integrate solar solutions and lower consumer acquisition costs. Local capacity building is crucial, as exemplified by the SolSmart programme in the US, which provides technical training to local governments. Governments should also institute vendor rating programmes to help consumers make informed decisions and ensure quality installations, as seen in India’s PM Surya Ghar: Muft Bijli Yojana scheme. Performance monitoring systems, similar to Australia’s Solar Panel Validation Initiative, can also enhance system reliability and maintain consumer trust in solar technology
Plan for sustainable rooftop solar expansion. National electricity authorities must regularly assess and plan for transmission and distribution needs, working closely with distribution companies (discoms) and other stakeholders to avoid issues related to curtailment, as experienced in Vietnam. Countries such as China have addressed grid uncertainties by enhancing transmission capacity and developing energy storage. Maintaining granular and periodic data through national registries, such as Germany’s Master Register (MaStR) and Australia’s Distributed Energy Resource Register, is crucial for informed policymaking, infrastructure planning, and identifying beneficiaries. Reliable data helps drive better decisions and supports the overall growth of RTS infrastructure.

By adopting these effective strategies, countries can accelerate their transition to RE, harnessing RTS as a critical component of their sustainable energy future. Drawing from the insights and best practices from leading economies provides a valuable roadmap for overcoming common challenges and unlocking the full potential of RTS globally.