ADB approves $650m loan to accelerate India's solar deployment

Policy reforms and loans will remove financial barriers to solar installation.

The Asian Development Bank (ADB) has approved a $650m policy-based loan to accelerate India’s solar power deployment to reach 10 million households by 2027.

The financing under Subprogram 1 of the Accelerating Affordable and Inclusive Rooftop Solar Systems Development Program will support the government’s flagship initiative—Pradhan Mantri Surya Ghar: Muft Bijli Yojana (PMSGMBY)—which aims to make rooftop solar systems widely accessible nationwide.

This financing is expected to contribute to the nationwide objective of installing 30 gigawatts of rooftop solar capacity, achieving annual reductions of 28.8 million tonnes of carbon emissions.

The initiative will provide financing to consumers for installing rooftop solar systems of up to 3 kilowatts (kW), with a 60% subsidy for systems up to 2 kW and a 40% subsidy for additional capacity between 2 kW and 3 kW.

Key reform areas under the program include developing uniform operational guidelines and quality standards for residential rooftop solar systems and facilitating mass adoption among low- and middle-income households through collateral-free, low-interest loans.

ADB’s financing for the program also includes $3m in technical assistance to help implement reforms, build institutional capacity, and promote gender-inclusive participation in the rooftop solar sector.