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Dedicated finance support key to rooftop solar in SME sector: Deloitte

Scaling up rooftop solar in the Micro, Small, and Medium Enterprises (MSME) sector in India requires addressing issues related to lack of low-cost financing, inadequate level of awareness, and lack of rooftop aggregation models, according to a new report from Deloitte and Climate Investment Funds (CIF).

The Micro, Small, and Medium Enterprises sector is expected to contribute significantly to achieving the government’s target of building 40 gigawatt (GW) of the rooftop solar capacity by 2022. The report scaling up rooftop solar in the SME sector in India evaluates key issues based on the primary survey done across 150 MSMEs in six industrial clusters of rubber and plastic, auto, paper, pharmaceuticals, food and beverage, and textiles in India, selected on the basis of a pre-determined criteria.

“A walk-through survey of 150 MSMEs depicted the willingness towards adoption of rooftop solar applications but strengthening an enabling ecosystem will be critical for its proliferation,” says Tushar Sud, Partner, Deloitte Touche Tohmatsu India LLP. “Limited access to finance, need to strengthen awareness, and escalating energy expenses are impacting the long-term profitability, competitiveness, and sustainability of the sector,,” says Abhishek Bhaskar, Energy Specialist, CIF.

In the initial stages, target industry clusters where the likelihood of achieving intended outcomes is higher and developing customised market plans is imperative. Regulatory changes for the adoption of group and virtual net metering could assist in implementing aggregation models in the MSME clusters and overcoming issues related to scale, diverse customer profile, and financing.

Dedicated scheme supported by the Ministry of MSME with financial interventions, such as interest subvention and the Partial Risk Guarantee Fund mechanism, through budgetary allocations may be required for pilot projects across target clusters, the report suggets.