The World Bank this week approved a $625 million loan to support India’s on-site solar power programme.
The project, which will be implemented by the State Bank of India (SBI), aims to install at least 400 MW of rooftop solar photovoltaic (PV) panels across the country.
Under the programme, SBI will lend to solar PV developers, aggregators and end users for investment in mainly commercial and industrial rooftop PV systems.
The project aims to address barriers to expansion of India’s rooftop solar market which the World Bank says have kept capacity low. According to the Bank, lack of adequate financing has been the main barrier, with those wanting to install rooftop PV systems having to pay the full cost up front.
Unfamiliar technology and low consumer awareness are also barriers the project aims to address.
Several business models will be supported under the programme, the World Bank said, including end-user ownership, third-party ownership, leasing and rooftop rental.
Mohua Mukherjee, Senior Energy Specialist and World Bank’s Task Team Leader for the project, said: “Today, the only available option for those [in India] who want to install solar PV is to pay the entire cost up-front. The variety of financing mechanisms on offer under this programme will represent a major innovation for the rooftop market.
“Most importantly, the scope of the project will go beyond simply making finance available, it will also improve the investment climate for solar PV, and increase the ease of doing business.”
Onno Ruhl, World Bank Country Director in India, added: “India is endowed with huge solar energy potential, and the World Bank is strongly supportive of the government’s plans to harness this potential and increase India’s solar PV capacity to 100 GW. This project will support this target.”