While large-scale solar has grown rapidly, residential solar adoption has been limited in India.
However, this is changing as the World Bank has approved financing to accelerate India’s national program for solar rooftops to bring clean energy to millions of homes. This will also create job opportunities across the renewable energy manufacturing, installation, and services value chain.
India has committed to achieving net zero by 2070 and increasing non-fossil-fuel-based energy resources to 60 percent of its electricity mix by 2035.
Moreover, this is being unlocked through the ‘PM Surya Ghar: Muft Bijli Yojana’ program to incentivize solar rooftop installation for 10 million rural and urban households nationwide, reduce household electricity costs, and encourage local manufacturing of solar rooftop equipment.
Paul Proccee, World Bank Acting Country Director for India, says the World Bank has been supporting India’s solar rooftop sector for over a decade, mobilizing more than $2 billion to catalyze market growth from 500 MW to over 27 GW of installed capacity. “This new financing will help India scale up residential solar, while creating job opportunities across the supply chain and installation ecosystem.”
Moez Cherif, Task Team Leader of the program, believes this will transform the residential solar market by removing financial barriers and building the capacity of distribution companies, banks, and vendors to deliver integrated service solutions. “Through collateral-free financing, households can install solar power and significantly reduce their monthly electricity bills.”
The financing package for the program includes an $820 million loan from the International Bank for Reconstruction and Development (IBRD), a $60 million concessional loan from the Clean Technology Fund, and a $10 million grant from IBRD’s Livable Planet Fund.
Furthermore, the World Bank will mobilise $4.2 billion in private financing in the form of commercial loans enabling them to install solar rooftops for households.