May 16, 2016Michael Sutherland-Shaw
The World Bank is shining a light on renewable energy after approving a $625 million loan to the Government of India’s rooftop solar program.
“India is endowed with huge solar energy potential, and the World Bank is strongly supportive of the government’s plans to harness this potential and increase India’s solar PV capacity to 100 GW,” said Onno Ruhl, World Bank Country Director in India in a release.
According to the World Bank, the project will finance the installation of at least 400 MW of Grid Connected Rooftop Solar Photovoltaic (GRPV) across India. These installations will provide clean, renewable energy, as well as reduce greenhouse gas emissions.
The World Bank Board also approved a co-financing loan of $120 million on concessional terms and a $5 million grant from Climate Investment Fund’s (CIF) Clean Technology Fund.
India is one of the lowest per capita consumers of electricity in the world, with more than 200 million people living without electricity. For those connected to the grid, frequent disruptions are a reality.
Due to a lack of adequate financing, unfamiliar technology and low consumer awareness, widespread rooftop solar PV systems have not yet been fully utilized in India.
Therefore, those in the business and manufacturing sectors are forced to rely on expensive and polluting diesel-based back-up power supplies to combat the power shortages, said the release.
“Today, the only available option for those who want to install solar PV is to pay the entire cost up-front. The variety of financing mechanisms on offer under this program will represent a major innovation for the rooftop market,” said Mohua Mukherjee, Senior Energy Specialist and World Bank’s Task Team Leader for the project.
The report adds, rooftop solar has the potential to transform the energy sector with the overall potential demand for rooftop solar estimated at about 124,000 MW.
“Solar PV will not only improve access to electricity, but it will do so in a manner that avoids the environmental impacts of other traditional electricity sources. Through this project and others like it, tens of millions of electricity customers will eventually be able to generate part of their own electricity needs, from one of the cleanest sources of energy,” Ruhl said.