Solar Investment Trusts Instrument Analysis

The briefing proposes the use of Solar Investment Trusts (SEITs), structured as Infrastructure Investment Trusts (InvITs), to address financing barriers for small-scale rooftop solar projects in India. By pooling assets, SEITs aim to attract institutional investors, reduce the cost of equity by 300-350 basis points, and potentially mobilize USD 1 billion for the rooftop solar sector within five years. However, the document identifies significant barriers to immediate implementation, including SEBI's minimum asset value requirement of INR 500 crore and strict leverage limits of 49%, which currently exceed the capacity of even the largest Indian rooftop solar developers.

• India requires approximately USD 40-50 billion in capital investment to reach its target of 40 GW of rooftop solar capacity by 2022, but access to finance remains a primary barrier as most projects lack the scale to raise debt and rely on expensive equity.
• A Solar Investment Trust (SEIT) is designed as a dividend-yielding vehicle structured as an Infrastructure Investment Trust (InvIT) under SEBI guidelines. It allows developers to pool small-scale rooftop solar projects into special purpose vehicles (SPVs), increasing liquidity and diversification to lower the cost of capital.
• Current SEBI regulations present significant hurdles for rooftop solar developers: the minimum asset value must be INR 500 crore with a float of INR 250 crore, and leverage is capped at 49%. These requirements are currently too high for the sector, as even the largest developer, Cleanmax Solar, does not yet possess assets of INR 500 crore.
• SEITs are estimated to reduce the cost of marginal equity by 300 to 350 basis points compared to conventional sources. For a privately placed SEIT, the cost of equity is estimated between approximately 11.6% and 12%, compared to a typical unlisted project cost of ~15% post-tax.
• The instrument has the potential to mobilize USD 1 billion in commercial capital for the rooftop solar sector and USD 3-4 billion for the broader clean energy sector within five years. This could enable the installation of over 1 GW of rooftop solar capacity.
• The implementation of SEITs is expected to create significant employment and environmental benefits. Installing 1 GW of capacity could create 14,000 short-term jobs and 3,800 long-term jobs per year, while reducing CO2 emissions by 1.6 million tons per year.

APA

Singh, D., Trivedi, S., & Shrimali, D. G. (2017). Solar Investment Trusts Instrument Analysis. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2017/10/Solar-Investment-Trusts-SEITs_Instrument-Analysis.pdf

Chicago

Singh, Divjot, Saurabh Trivedi, and Dr. Gireesh Shrimali. Solar Investment Trusts Instrument Analysis. Climate Policy Initiative, 2017. https://www.climatepolicyinitiative.org/wp-content/uploads/2017/10/Solar-Investment-Trusts-SEITs_Instrument-Analysis.pdf.

Wikipedia

{{cite report |last1=Singh |first1=Divjot |last2=Trivedi |first2=Saurabh |last3=Shrimali |first3=Dr. Gireesh |title=Solar Investment Trusts Instrument Analysis |publisher=Climate Policy Initiative |date=October 2017 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2017/10/Solar-Investment-Trusts-SEITs_Instrument-Analysis.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{singh2017solar, author = {Singh, Divjot and Trivedi, Saurabh and Shrimali, Dr. Gireesh}, title = {{Solar Investment Trusts Instrument Analysis}}, institution = {Climate Policy Initiative}, year = {2017}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2017/10/Solar-Investment-Trusts-SEITs_Instrument-Analysis.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }