Financing MSMEs for Rooftop Solar

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The pace of rooftop solar installations has been considerably slow, with only 5.5 GW achieved as on date. A large portion of this capacity has been achieved in the commercial and industrial (C&I) sector in India. However, the success has been limited to medium- and large-sized players. The uptake of rooftop solar in the MSME sector has been quite low despite MSME sector forming the largest number of players in the C&I segment.

The uptake of rooftop solar in MSME sector faces a host of challenges ranging from low awareness levels about the technical and commercial benefits of this form of energy, about various models of deployment, to lack of adequate financing for rooftop solar. The MSMEs also feel the rooftop solar sector does not have a structured and standardized offering in terms of asset quality. This aspect discourages MSMEs to invest in the rooftop solar assets, that require high amount of capital. Financial Institutions have a similar concern with regards to the lack of standardization in the rooftop solar segment and also about the credit risk and repayment risk from lending to MSME sector.

In this regard, adequate support to MSMEs as well as lenders becomes essential from the point of view of accelerating the growth of rooftop solar amongst MSMEs. Under this program, this activity aims to design a mitigating product or a framework that enables greater lending to MSMEs for the uptake of rooftop solar


Sectors covered

Intended benefits

  • Reduced reservations of lenders with respect to MSME lending
  • Enhanced awareness amongst MSMEs about rooftop solar
  • Enhanced trust amongst MSMEs regarding rooftop solar
  • Credit enhancement of low or unrated MSMEs
  • Support to lenders for covering low and unrated MSME segments
  • Structured framework for lenders for rooftop solar
  • Enhanced lending for rooftop solar amongst MSMEs
  • Development of rooftop solar market for MSMEs


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