Solar Investment Trusts (SEITs)

This briefing proposes the creation of Solar Investment Trusts (SEITs) as a mechanism to overcome financing barriers for small-scale industrial and commercial rooftop solar developers in India. By structuring SEITs as Infrastructure Investment Trusts (InvITs) under SEBI guidelines, the model aims to lower the cost of equity, increase capital mobilization, and enable capital recycling to help India reach its rooftop solar capacity targets.

• India requires approximately $40-50 billion in capital investment to achieve its rooftop solar capacity target of 40 GW by 2022, a significant increase from the existing capacity of 1.3 GW.
• The rooftop solar sector faces several investment barriers: individual projects often lack the scale to raise debt (relying on more expensive equity), there are limited entry and exit options for investors with different appetites, and a lack of public information increases return requirements and financing costs.
• Solar Investment Trusts (SEITs) are proposed as investment vehicles structured as Infrastructure Investment Trusts (InvITs) under the Securities and Exchange Board of India (SEBI). Unlike mutual funds, SEITs can hold direct holdings of project special purpose vehicles (SPVs). They aim to lower the cost of equity by 350-400 basis points and potentially mobilize over USD 1 billion for rooftop solar and USD 3-4 billion for the broader clean energy sector within five years.
• SEITs address specific market failures by increasing capital supply through new investor classes, reducing non-systematic risk via project pooling, improving corporate governance and disclosure through SEBI oversight, and increasing liquidity via mandatory listing.
• The SEIT model enables capital recycling, allowing developers to transfer SPV shares to the trust in exchange for fresh capital. This allows a higher volume of projects to be executed with the same amount of capital, ultimately lowering the levelized cost of energy (LCOE) and boosting adoption in India.

APA

Climate Policy Initiative (2020). Solar Investment Trusts (SEITs). https://www.climatepolicyinitiative.org/publication/solar-investment-trusts-seits/

Chicago

Climate Policy Initiative. Solar Investment Trusts (SEITs). 2020. https://www.climatepolicyinitiative.org/publication/solar-investment-trusts-seits/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Solar Investment Trusts (SEITs) |date=28 August 2020 |url=https://www.climatepolicyinitiative.org/publication/solar-investment-trusts-seits/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2020solar, author = {{Climate Policy Initiative}}, title = {{Solar Investment Trusts (SEITs)}}, institution = {Climate Policy Initiative}, year = {2020}, month = aug, url = {https://www.climatepolicyinitiative.org/publication/solar-investment-trusts-seits/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }