Rooftop Solar Program for Residential Sector
Start & End Date: 2022-Ongoing
Country/Countries: India
Multilateral Institution(s) Involved: World Bank
Case Study: Available
India’s power sector is a key contributor to air pollution and carbon emissions and represents about half of the country’s total energy-related CO2 emissions. It is imperative to decarbonize the power sector by significantly increasing the use of renewable energy. India currently ranks fifth globally in terms of annual solar power generation. However, significant land area is required to set up renewable energy plants, particularly the large-scale ground-mounted solar power projects. The government therefore is looking to increase the country’s rooftop solar capacity. India is committed to supporting growth of rooftop solar in the country, particularly in the residential sector. Most residential consumers pay less for electricity than commercial or industrial consumers and therefore have less incentive to shift to rooftop solar. Absence of affordable financing and innovative business models and high up-front capital cost exacerbates this challenge.
The project will directly finance 450 MW of rooftop solar capacity in the residential sector. Importantly, the project will provide concessional financing to developers and residential consumers and mobilize additional private capital. It aims to mobilize $71 million of private capital, in addition to the $151.61 million that has been mobilized so far. Electricity distribution companies (DISCOMs) directly engage with residential consumers and play a vital role in the expansion of grid-connected solar. The project will support DISCOMs in identifying groups of residential customers, optimal locations to install the solar rooftops and battery energy storage systems, and appropriate business practices that will in turn help the utilities. The additional financing includes a $150 million loan from the International Bank for Reconstruction and Development (IBRD), and another $15 million from the IBRD Fund for Innovative Global Public Goods Solutions.
The project is projected to reduce greenhouse gas (GHG) emissions by 13.9 million tons.