The World Bank Board approved a $625 million loan to support the Government of India’s program to generate electricity from widespread installation of rooftop solar photo-voltaic (PV). The Board also approved a co-financing loan of $120 million on concessional terms and a $5 million grant from Climate Investment Fund’s (CIF) Clean Technology Fund.
The project will finance the installation of at least 400 MW of Grid Connected Roof top Solar Photovoltaic (GRPV) across India. These solar PV installations will provide clean, renewable energy, and reduce greenhouse gas emissions by displacing thermal generation. The project will also strengthen the capacity of key institutions, and support the development of the overall solar PV market.
The project will be implemented by the State Bank of India (SBI). SBI will on-lend funds to solar PV developers/aggregators and end-users, who wish to invest in mainly commercial and industrial rooftop PV systems. Financing will be provided to those with sound technical capacity, relevant experience, and creditworthiness as per SBI standards.
Despite energy shortages, and the high cost of backup supply, rooftop solar PV systems have not yet become widespread in India. This is primarily due to the lack of adequate financing, unfamiliar technology and low consumer awareness. Until now, those that wanted to install solar rooftop PV systems had to pay the full cost up-front. The total capacity of rooftop solar, therefore, remains low.
Aided by government policy and declining costs, rooftop solar has the potential to transform the energy sector. The overall potential demand for rooftop solar is estimated at about 124,000 MW.
