Aggregation models and cheap financing could unlock rooftop solar for India’s SMEs

Facebook
Twitter
LinkedIn
Reddit
Email
opal Krishan Gupta, Joint Secretary (Ministry of New and Renewable Energy, Government of India) released report on Scaling up Rooftop Solar in the SME Sector in India. Credit: Deloitte and CIF

Adding rooftop solar to India's small-scale business sector will be critical in the rush to its countrywide 40GW rooftop PV by 2022 target, but a new report has highlighted key barriers and solutions.

The 'Scaling up rooftop solar in the SME sector in India' report from Deloitte and Climate Investment Funds (CIF) was based on a survey of 150 India's Micro, Small, and Medium Enterprises (MSMEs) in six Indian industries including rubber and plastic, pharmaceuticals, auto, paper, food and beverage, and textiles. The survey showed an overall willingness to adopt solar, but such intentions are limited by various issues.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Abhishek Bhaskar, energy specialist, CIF, said: “Limited access to finance, need to strengthen awareness, and escalating energy expenses are impacting the long-term profitability, competitiveness, and sustainability of the sector. However, it presents [a] great opportunity, and a multi-pronged approach involving supportive regulations, risk-bearing financing, and awareness building is needed to demonstrate viability and help scale up rooftop solar in the sector.”

The report offered a number of solutions, which included initially targeting the low hanging fruit industry clusters where the likelihood of success is higher.

It also suggested that a dedicated aggregation model could support the implementation of rooftop solar projects across the target MSME clusters, in response to difficulties with implementing large-scale rooftop projects under the OPEX model without special financial support.

To complement an aggregation drive, changing regulations to allow for group and virtual net metering would also be beneficial so that customers with unique profiles or those with not enough access to financing for large-scale systems can still be accommodated.

Deloitte and CIF also suggested supporting dedicated MSME-based portfolios within existing or new lines of concessional credit, as well as offering financial interventions such as interest subvention and the Partial Risk Guarantee Fund mechanism, through allocations from government budgets.

The unlikelihood of India reaching its rooftop solar target has been reported widely for some time, yet it is still seen as a new success story given that a very slow start in comparison to the large-scale ground-mount solar sector in India, has been followed by a steady welling of support and the sector is expected to grow rapidly each year in the near future. Industry members have also highlighted problems with subsidy dispersal in the household PV segment.

According to Bridge to India's 'India Solar Compass Q4 2018', India had 3,855MW of rooftop solar at the end of last year.

A World Bank and Clean Technology Fund (CTF) programme has already delivered financing to close to 300MW of capacity, working in close partnership with State Bank of India (SBI). The MSME sector is now being targeted as a potential area for future growth.

The World Bank has announced multi-million dollar financing support for India's rooftop PV sector several times in recent years.

Read Next

June 24, 2024
The US has yet again been named the most attractive market for renewables investment and deployment opportunities, according to EY.
June 21, 2024
Solar PV is expected to generate 20% of global power across midday peaks on the summer solstice in the northern hemisphere, up from 16% in 2023.
Premium
June 21, 2024
PV Tech Premium talks to Nextracker president Howard Wenger about the company's business, expansion plan and R&D spending. 
June 20, 2024
Greater supply chain independence is a priority for companies in the solar sector, according to Hardeep Singh at Intersolar Europe 2024.
June 18, 2024
Indian solar module manufacturer Vikram Solar has signed a 393.9MW module supply agreement to supply the Khavda Solar park in the state of Gujarat.
June 18, 2024
Global solar installations increased by 87% year-on-year in 2023 as China continued to dominate growth, according to SolarPower Europe.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
July 2, 2024
Athens, Greece
Solar Media Events
July 9, 2024
Sands Expo and Convention Centre, Singapore
Upcoming Webinars
July 10, 2024
9am (BST) / 10am (CEST)
Solar Media Events
September 24, 2024
Warsaw, Poland