Rooftop solar drives distributed energy resource growth across 3 markets

Australia has rooftop solar on 40% of homes.

Distributed energy resources (DER) are expanding across Australia, India, and Bangladesh, with rooftop solar emerging as the main driver of growth, according to a briefing note from the Institute for Energy Economics and Financial Analysis (IEEFA).

The report found that policy support, financing, and market conditions have supported DER deployment across the three markets, although they differ in approval timelines, grid infrastructure, and access to finance.

Australia leads DER adoption, with solar panels installed on around 40% of homes as rooftop solar increased from near zero to more than 13% of electricity generation in the National Electricity Market (NEM) between 2014 and 2025.

Coal's share in the country declined to 52% from 75%. IEEFA said residential battery installations have also accelerated, with nearly 10 gigawatt-hours of capacity installed in less than a year following the introduction of federal rebates.

"Now residential batteries are emerging as the next frontier, with the uptake seen since the launch of the Cheaper Home Batteries Program in July 2025 far exceeding what most forecasts expected," said Jay Gordon, Energy Finance Analyst for Australian Electricity at IEEFA and briefing note co-author.

In Bangladesh, rooftop solar has grown faster than other DER technologies. Government data shows 415.9 megawatts (MW) of installed rooftop solar capacity.

IEEFA's assessment found rooftop solar capacity across 239 establishments reached 667MW and could total 1,000MW if systems below 0.15MW are included.

The report said the increase has contributed to lower daytime electricity demand based on comparisons between 15 April–11 June 2024 and the same period in 2026.

"The sector is expected to grow further, with engineering, procurement and construction companies holding a project pipeline of more than 500MW,” said Shafiqul Alam, Lead Analyst for Bangladesh Energy at IEEFA South Asia and briefing note co-author.

Alam added that the country’s diesel-dominated irrigation sector also offers opportunities for solar-powered irrigation, with a full transformation of the sector potentially adding 4,000MW of capacity and cutting the country's annual diesel import bill by around $244m.

India's distributed solar capacity increased from 1.8GW in financial year (FY) 2018 to 31.5GW in FY2026, supported by government subsidy programmes, financing and enabling policies.

IEEFA said rooftop solar and agricultural solarisation have expanded under the PM Surya Ghar Muft Bijli Yojana and PM-KUSUM schemes.

Despite the increase, distributed solar's share of India's total renewable energy capacity remained at about 21% to 22% over the period as utility-scale solar expanded at a faster rate.

"Backed by diverse business models … these schemes have broadened market participation and accelerated DER deployment across urban and rural areas," said Gaurav Upadhyay, Energy Finance Specialist for India Sustainable Finance at IEEFA South Asia and briefing note co-author.

The report said the three countries differ in approval timelines, smart meter deployment, and access to financing.

“The authors call for equitable access to DER, expanded battery storage alongside solar programmes, smart meter deployment and streamlined financing for households, farmers and small businesses for accelerated DER adoption,” it added.