Solar Energy Adoption in India: Beyond Policies and Schemes

Navin Rajaram  
Managing Director , Solar Hitech Solutions

Navin Rajaram acts as the Managing Director of Solar Hitech Solutions, leading the company in the development and implementation of sustainable solar energy solutions. His vision and dedication to clean energy drive the company's efforts to innovate and deliver high-quality solar technologies.

The Interim Budget in 2024 brought in a lot of cheer to the Indian solar industry with the announcement of a whopping Rs. 7,327 crores for the solar power sector by way of solar on-grid, off-grid, and PM-KUSUM schemes. In this context, the Hon’ble Prime Minister Shri Narendra Modi’s focus on giving energy security and independence to small households through the PM Surya Ghar Muft Bijli Yojana subsidy scheme was rightfully welcomed and praised.


As of December 2023, India’s installed solar power capacity was 73.3 GW, with a target of 500 GW of cumulative capacity by 2030 towards the larger goal of achieving net zero emissions by 2070. Launching these residential schemes is critical for a country with challenges in the availability of natural resources for power generation, exposed to geopolitical conflicts that inflate import costs of fossil fuels and struggles to distribute energy to rural areas. At the same time, the growing installation of rooftop solar plants in commercial institutions and ground-mounted/utility-scale power plants for open access has improved the adoption of solar energy by the C&I segment in India.


Beyond policies and schemes, it is now necessary to ask what else can be done to help the solar industry grow in India. Just as the residential opportunity lies beyond the metros/Tier 1 cities in the 1-5 KW ticket size installations, the C&I opportunity lies with MSMEs.


MSMEs in India contribute approximately 30% to the country’s GDP and employ over 100 million people. Often seen as a lesser cousin of the large industrial sector, they provide critical products and services that keep the economy turning. This sector continues to rely on traditional energy sources, accounting for nearly 25% of the overall energy consumption in the industrial sector.


As is the case for MSMEs, they struggle with easy access to finance/working capital, long-term business outlook, and shaky creditworthiness, all of which affect their ability to shift to renewable energy. Over the past few years, the fin-tech sector has identified the need for working capital for MSMEs as a clear opportunity, resulting in many venture-funded flexible/small loan firms catering to this sector.


India has a clear and present opportunity to encourage MSMEs to adopt solar energy and reduce their dependence on conventional electricity. For this to happen, private and public players can join hands to build a strong ecosystem of finance, technology benchmarks, installation procedures and clear return on investment metrics to demystify the adoption of solar energy for MSMEs. Fintech firms that can digitize and automate the credit checks and disbursal process will drive solar EPCs and MSMEs to close on PPA/solar installation agreements faster, improving the adoption of renewable energy.


Of course, the job is made tougher by differing policies and schemes relating to net metering/open access in different states in India. This raises the question of when we can see a Unified C&I policy scheme driven by the central government. That is, of course, a discussion for a different day!
















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