ADB approves $650 mn loan to boost India's rooftop solar rollout by 2027

Don't want to miss the best from Business Standard?

Multilateral development bank ADB has approved a $ 650 million (about Rs 5,780 crore) policy-based loan to help the Government of India accelerate rooftop solar adoption and expand access to clean, affordable energy for 10 million households by 2027.

The financing under Subprogram 1 of the Accelerating Affordable and Inclusive Rooftop Solar Systems Development Program will support the government's flagship initiative Pradhan Mantri Surya Ghar: Muft Bijli Yojana (PMSGMBY) which aims to make rooftop solar systems widely accessible nationwide, ADB said in a statement on Tuesday.

The programme is accelerating India's clean energy transition by removing long-standing barriers to rooftop solar adoption, including financing constraints and regulatory gaps, ADB Country Director for India Mio Oka said.

It is making rooftop solar affordable and accessible for millions of households while creating green jobs, empowering women, and strengthening the financial health of the power sector, she said.

PMSGMBY will provide financial assistance to residential consumers for installing rooftop solar systems of up to 3 kilowatts (kW), with a 60 per cent subsidy for systems up to 2 kW and a 40 per cent subsidy for additional capacity between 2 kW and 3 kW.

Key reform areas under the programme include developing uniform operational guidelines and quality standards for residential rooftop solar systems and facilitating mass adoption among low- and middle-income households through collateral-free, low-interest loans, it said.

Aligned with India's Nationally Determined Contribution targets, the programme will enhance the skills and capacity of at least 5,000 personnel, including 1,500 women. It will also support the development of utility-led aggregation models and model solar villages, and foster a robust vendor ecosystem, it said.

ADB's intervention is expected to significantly contribute to the nationwide objective of installing 30 gigawatts of rooftop solar capacity, achieving annual reductions of 28.8 million tonnes of CO2 emissions, and delivering affordable solar energy to millions of households, it said.

It will also catalyse private sector investment to create opportunities for manufacturers, vendors, and service providers across the renewable energy value chain, it said.

ADB's financing for the programme includes $ 3 million in technical assistance to help implement reforms, build institutional capacity, and promote gender-inclusive participation in the rooftop solar sector.