ADB Approves $850M Loan for India's Rooftop Solar Scheme

The multilateral lender will finance the next phase of India's rooftop solar investment programme, helping expand access to affordable financing for residential solar installations.

The Asian Development Bank (ADB) has approved an $850 million loan to support the expansion of rooftop solar across India, strengthening financing for the government's flagship PM Surya Ghar: Muft Bijli Yojana and helping accelerate residential solar adoption.

According to ADB, the financing forms part of Phase II of the Multitranche Financing Facility (MFF) for the Solar Rooftop Investment Program. The programme will be implemented through the State Bank of India (SBI) and the National Bank for Financing Infrastructure and Development (NaBFID) to improve access to financing for households investing in rooftop solar systems.

While government subsidies reduce the upfront cost of rooftop installations, many homeowners still require loans to cover the remaining expense. ADB said the financing is intended to strengthen lending capacity through participating financial institutions, making residential rooftop solar more accessible across the country.

The loan comes as India expands the PM Surya Ghar: Muft Bijli Yojana, launched in February 2024 to promote rooftop solar adoption among residential consumers. The scheme aims to install rooftop solar systems on one crore households by March 2027, reducing electricity bills while supporting India's clean energy transition.

The financing also supports India's broader renewable energy ambitions. Rooftop solar enables households to generate electricity where it is consumed, reducing dependence on conventional power sources and contributing to a more distributed electricity network.

ADB said the programme aligns with India's goal of increasing clean energy capacity while improving energy security and reducing greenhouse gas emissions. The lender has supported several renewable energy and infrastructure projects in India over the past two decades.

The announcement follows a series of recent developments in the rooftop solar sector. Government officials are also examining a possible next phase of PM Surya Ghar that could include battery storage, shared rooftop solar models for apartment residents and improvements to grid integration, although no formal policy has been announced.

The latest ADB financing provides additional financial backing for one of India's largest residential clean energy programmes and is expected to improve access to affordable credit as rooftop solar installations continue to expand.

Sources