India gets $1.5 Billion loan for Rooftop Solar Program

The Modi government is playing high on the rooftop solar systems and have received a much-needed boost even as the target of 40 GW installed rooftop solar power capacity by 2022 looks extremely ambitious.

The Ministry of New & Renewable Energy (MNRE) gave information about Loan received from the World Bank, the Asian Development Bank, and the newly-founded BRICS development bank. An amount of $500 million from each of the bank has been sanctioned for development of rooftop solar power projects in the country.

The funds will be utilized to provide a 30% subsidy to public, non-commercial institutions to set up rooftop solar power systems. Individuals or entities not eligible for this subsidy may also be able to source low-cost debt finance from these funds.

India has set a target to have 100 GW of solar power capacity operational by April 2022 which includes 40 GW for rooftop solar power systems. Right now, the rooftop solar power capacity in India is just 10% of the 5 GW of the total operational solar power capacity. Increasing the capacity to 40 GW in about 75 months will be a very difficult task.

The government has taken initiatives to boost development of the sector. The Cabinet of Ministers recently approved a proposal that will increase the subsidy for rooftop solar power systems to $770 million by 2022, which is expected to be in addition to the debt funds raised from international development banks.

Thankfully, both project developers and consumers are now looking to increase their presence in the rooftop solar power market. A subsidiary of Azure Power, one of the largest solar power project developers in India, recently secured $20 million from Overseas Private Investment Corporation to develop 19 MW of rooftop solar power capacity. SunEdison is also working in several states in India to set up rooftop and off-grid solar power systems. The US-based project developer has also set up a number of rooftop solar power projects for the Delhi Metro Rail Corporation.

A number of state governments are also working on policies to mandate implementation of rooftop solar power systems on government-buildings as well as all newly developed buildings.

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