ADB Approves $650M Loan to Boost Rooftop Solar Access for 10 Million Indian Homes

The program aims to make rooftop solar widely accessible nationwide, particularly targeting low- and middle-income households.

The Asian Development Bank (ADB) has approved a $650 million policy-based loan to support the Government of India in accelerating the adoption of rooftop solar systems and expanding access to clean, affordable energy for 10 million households by 2027.

The financing, under Subprogram 1 of the Accelerating Affordable and Inclusive Rooftop Solar Systems Development Program, will support India’s flagship initiative, Pradhan Mantri Surya Ghar: Muft Bijli Yojana (PMSGMBY). The program aims to make rooftop solar widely accessible nationwide, particularly targeting low- and middle-income households.

Key Benefits and Features of the Program:

• Financial Support for Households: PMSGMBY provides subsidies for rooftop solar systems of up to 3 kilowatts (kW), with 60% for systems up to 2 kW and 40% for additional capacity between 2–3 kW.

• Regulatory and Operational Reforms: The program will establish uniform operational guidelines and quality standards for residential rooftop solar, addressing long-standing barriers to adoption, including financing gaps and regulatory hurdles.

• Low-Interest, Collateral-Free Loans: The program facilitates mass adoption by offering collateral-free, low-interest loans, making solar systems more affordable for households.

• Skill Development and Gender Inclusion: The program plans to enhance the skills of 5,000 personnel, including 1,500 women, through training in solar installation, maintenance, and project management.

• Utility-Led Models and Vendor Ecosystem: ADB support will help develop model solar villages, encourage utility-led aggregation approaches, and foster a robust ecosystem for vendors, manufacturers, and service providers.

Environmental and Economic Impact:

• Clean Energy Contribution: The program is expected to contribute to 30 gigawatts of rooftop solar capacity nationwide.

• Carbon Reduction: Annual reductions of 28.8 million tons of CO2 emissions are projected.

• Job Creation and Private Sector Growth: The program is expected to generate green jobs, empower women in the energy sector, and catalyze private sector investment across the renewable energy value chain.

Technical Assistance and Capacity Building: ADB’s financing includes $3 million in technical assistance to implement reforms, build institutional capacity, and promote gender-inclusive participation in the rooftop solar sector.

ADB Country Director for India, Mio Oka, highlighted, “This program removes barriers to rooftop solar adoption, makes solar energy affordable for millions, strengthens the power sector, and empowers women, while supporting India’s clean energy transition.”

The program aligns with India’s Nationally Determined Contribution (NDC) targets under the Paris Agreement and supports the country’s vision of becoming a global leader in renewable energy adoption.