The Asian Development Bank (ADB) and multi-donor funding agency Clean Technology Fund are to release $500 million in financing to grease the wheels of Indias stuttering rooftop solar PV sector.
ADB will provide $330 million and Clean Technology Fund $170 million of the $500 million loan, which will be channeled through the state-owned Punjab National Bank, allowing various developers and private end-users to access the cash and pursue their rooftop PV goals.
Indias National Solar Mission (NSM) has set a target of reaching 100 GW of installed solar PV capacity by 2022. Of that figure, some 40 GW is projected to come from the rooftop sector, but estimates currently put Indias rooftop capacity at a mere 1 GW.
The sector has faced numerous financial and logistical challenges thus far, not least the inescapable fact that around 80% of the countrys residential rooftops are flat and thus far from optimum for rooftop panels.
However, the commercial and industrial (C&I) sector has also neglected the potential of rooftop solar, and it is in this field from which much hope springs. Up to now, lending for rooftop solar projects has been scarce, with many banks wary of the risks and bedeviled by a lack of knowledge and experience of the market.
"There is a huge potential for India to expand its use of solar rooftop technologies because of the sharp drop in the price of solar panels, meaning the cost of producing solar energy is at or close to that from fossil fuels," said ADBs South Asian finance specialist Anqian Huang.
Allied to this $500 million injection of funds is a further, pre-existing $500 million program comprising $300 million subproject equity investment and $200 million in loans from commercial banks. Together, the combined funding for the Solar Rooftop Investment Programme stands at $1 billion.
"This funding should mean that 11 million fewer tonnes of greenhouse gases are emitted over the typical 25-year lifetime of solar rooftop systems," said an ADB statement.
At the weekend, India agreed to ratify the Paris Agreement to take the necessary steps to cut its C02 emissions. The nation contributes 4.5% of the globes carbon emissions, and has pledged to lower them by 33% from 2005 levels by 2050.
The ADB has committed to double its annual financial support in tackling climate change to $6 billion by 2020 in order to assist Indias goal.