Bloomberg New Energy Finance has suggested that a massive financial boost is required if India plans to meet its aggressive target to have 40 GW of installed rooftop solar capacity by March 2022.
BNEF recently reported that the rooftop solar power segment has been the fastest-growing renewable energy sector in India over the last few months. However, despite the supportive regulatory developments, substantial financial support will also be needed to carry on the growth momentum.
India has seen a recent surge in rooftop solar power projects over the few months with several home owners as well as industries setting up projects under net-metering schemes and for captive consumption. Attractive net-metering provisions and high industrial electricity tariffs have driven consumers towards this sector.
In spite of these positive developments, around $50 billion of additional investment would be needed over the next six years to achieve 40 GW of installed rooftop solar capacity. BNEF pointed out that finance is still hard to come by for projects being developed by third-party investors — a segment that holds perhaps the largest growth potential.
The rooftop solar market in India has seen significant support coming in from the government as well as international investors. The Cabinet of Ministers 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.
Earlier this year, the Ministry of New & Renewable Energy announced that the government managed to secure funding pledges from various multilateral and national development banks for its ambitious rooftop solar power program. The World Bank has committed $620 million, while the Asian Development Bank and BRICS New Development Bank have pledged to provide $500 million and $250 million, respectively. The German development bank KfW has provided $100 million, and negotiations for $1.14 billion worth of funding are underway, the ministry reported.
Last month, India also achieved the milestone of having 1 GW of operational rooftop solar power capacity.
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