Deloitte Proposes Roadmap for Achieving India’s 40 GW Rooftop Solar Target by 2022

Scaling up rooftop solar in the MSME sector in India requires addressing issues related to lack of low-cost financing, inadequate level of awareness, and lack of rooftop aggregation models.

In order to achieve the government’s ambitious target of building 40 GW of rooftop solar capacity by 2022, professional services and consultancy firm Deloitte has suggested a road map showcasing the ways through which India can achieve this target.

The consultancy firm in its report ‘Scaling up rooftop solar in the SME sector in India’ said that, the Micro, Small, and Medium Enterprises (MSME) sector is expected to contribute significantly in achieving the country’s rooftop solar target of 40 GW out of the aggregate solar target of 100 GW.

As per the new report from Deloitte and Climate Investment Funds (CIF), “Scaling up rooftop solar in the MSME sector in India requires addressing issues related to lack of low-cost financing, inadequate level of awareness, and lack of rooftop aggregation models.”

This report further evaluated key issues based on the primary survey done across 150 MSMEs in six industrial clusters in India i.e. rubber & plastic, pharmaceuticals, auto, paper, food & beverage, and textiles.

Besides, this report also recommended possible solutions for triggering rooftop solar growth in the MSME sector in India.

Commenting on the report, Deloitte Touche Tohmatsu India LLP, Partner, Tushar Sud said, “A well-conceived walk-through survey of 150 MSMEs depicted the willingness towards adoption of rooftop solar applications but strengthening an enabling ecosystem will be critical for its proliferation.”

“Limited access to finance, need to strengthen awareness, and escalating energy expenses are impacting the long-term profitability, competitiveness, and sustainability of the sector. However, it presents great opportunity, and a multi-pronged approach involving supportive regulations, risk-bearing financing, and awareness building is needed to demonstrate viability and help scale up rooftop solar in the sector,” said Abhishek Bhaskar, Energy Specialist, CIF.

Here’re a few possible solutions that the report highlighted in order to address the key hindrances affecting rooftop solar growth in the MSME sector:

• In the initial stages, target industry clusters where the likelihood of achieving intended outcomes is higher and developing customised market plans is imperative.
• The Indian rooftop solar market is currently not geared to implement large-scale rooftop solar projects under the OPEX model in the MSME sector without institutional or financial interventions. A dedicated aggregation vehicle could support the implementation of rooftop solar projects across the target MSME clusters.
• Regulatory changes for the adoption of group and virtual net metering could assist in implementing aggregation models in the MSME clusters and overcoming issues related to scale, diverse customer profile, and financing.
• Supporting dedicated MSME-based portfolios within existing or new lines of concessional credit is expected to support the development of rooftop solar projects in the MSME sector.
• Dedicated scheme supported by the Ministry of MSME with financial interventions, such as interest subvention and the Partial Risk Guarantee Fund mechanism, through budgetary allocations may be required for pilot projects across target clusters.
• Creating awareness and capacity building through dedicated initiatives to bridge knowledge gaps and support the adoption of rooftop solar in the MSME sector.

“World Bank has long supported India’s renewable energy ambitions, including rooftop solar, which is an integral part of our clean energy strategy. Supported by the Clean Technology Fund (CTF), the program has delivered financing to close to 300 MW so far working in close partnership with State Bank of India (SBI), and is all poised to surpass its initial goals. This CTF supported work is quite timely since a significant amount of this financing goes to installations for MSMEs, a sector that we have also identified as one of the potential areas for future growth,” said Simon Stolp, Lead Energy Specialist, World Bank.