Financing Rural Energy on Solar

There are close to 171 banks operating in India with 76,000 branches and over 12,000 NBFCs. There is already talk at the Central Ministry level of financing solar via the bank branches and the Regional Rural Banks. Initial meetings and top level honchos have met, with the MNRE officials, and they have been mandated to send the message downwards to the branches. While things are yet to change at the branch level, one often wonders ……What if each bank branch was mandated to finance 100 KW of solar power each year. Where would this lead us ?

The plain arithmetic of this is mind boggling !

7,600 MWs of solar power added to the country’s capacity every year and the biggies have not even stepped in.

Is 100 KW difficult to finance ? Not really, if we consider an average sized branch – it can benefit from about 8-12 KW of SPV plant itself for its own captive consumption. With each branch catering on an average to around 1800 customers, being able to offer this proposition to 20 customers of this lot, should not be difficult since the bank would have access to repayment capability. Financing this, would be in the bank’s interests in any case ( even if its on preferential interest rates).

Imagine if this becomes policy or mandate for the next 10 years. Remember that grid parity can be achieved by 2017 according to experts, and we believe that timeline shall get crunched even more. So financing and offering this post 2016-17, should be a compelling proposition in any case.

Now, if this can provide 76,000 MWs of decentralised energy generation, this is equivalent to producing about 110,000 MWs via power plants and distributing (taking into account, various T & D losses).

Financing solar in India truly is the key to unlocking solar potential in India.

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