Rooftop Solar Private Sector Financing Facility Lab Instrument Analysis

The report outlines a financing facility to address debt capital shortages for India's rooftop solar sector, specifically targeting commercial and industrial segments. It proposes a mechanism to bundle small projects into a warehouse line of credit, which is then refinanced via asset-backed securities (ABS) to attract institutional investors. The facility aims to lower debt costs by 0.5-3.5% and add 500MW of capacity by 2022.

• The Indian government's target of 40GW of rooftop solar capacity by 2022 would require $34bn in total capital, of which $24bn would be debt capital. A more realistic deployment scenario of 14GW by 2022 would require ~$11.8bn in capital, with $8.3bn as debt.
• Key barriers to investment in the rooftop solar sector include uncertain credit quality of systems, small deal sizes, high transaction costs, low solar power tariffs, and a lack of a track record for developers.
• The proposed Financing Facility operates in two phases: an aggregation phase to build a warehouse line of credit for creditworthy projects, and a securitization phase to refinance these projects by issuing asset-backed bonds to institutional investors.
• The warehouse credit line aims to blend commercial and concessional capital to reduce the cost of funding by 0.5-3.5% points, targeting a lending rate of no more than 11% to ensure projects remain attractive to equity investors.
• The Facility is projected to bring approximately $425 million of capital into the sector, add 500MW of rooftop solar capacity, and create 20,000 additional jobs between 2016 and 2022.
• The installation of 500MW of solar capacity through the Facility is estimated to reduce CO2 emissions by ~695mMT per year by 2022, as well as reduce SOX and NOX emissions by 2,300mMT and 3,217mMT respectively.
• Significant risks remain that the Facility cannot fully address, specifically the potential for off-takers to willfully terminate long-term Power Purchase Agreements (PPAs) if cheaper electricity sources become available, due to weak legal contract enforcement in India.
• The Facility is deemed highly actionable with a feasibility score of 2.3 on a 3-point scale, supported by the existence of a strong implementing agency and a compatible institutional framework.

APA

Jena, L. P., Atal, V., Shrimali, G., & Sen, V. (2016). Rooftop Solar Private Sector Financing Facility Lab Instrument Analysis. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/12/Rooftop-Solar-Private-Sector-Financing-Facility_full-report.pdf

Chicago

Jena, Labanya Prakash, Vinit Atal, Gireesh Shrimali, and Vivek Sen. Rooftop Solar Private Sector Financing Facility Lab Instrument Analysis. Climate Policy Initiative, 2016. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/12/Rooftop-Solar-Private-Sector-Financing-Facility_full-report.pdf.

Wikipedia

{{cite report |last1=Jena |first1=Labanya Prakash |last2=Atal |first2=Vinit |last3=Shrimali |first3=Gireesh |last4=Sen |first4=Vivek |title=Rooftop Solar Private Sector Financing Facility Lab Instrument Analysis |publisher=Climate Policy Initiative |date=October 2016 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2016/12/Rooftop-Solar-Private-Sector-Financing-Facility_full-report.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{jena2016rooftop, author = {Jena, Labanya Prakash and Atal, Vinit and Shrimali, Gireesh and Sen, Vivek}, title = {{Rooftop Solar Private Sector Financing Facility Lab Instrument Analysis}}, institution = {Climate Policy Initiative}, year = {2016}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2016/12/Rooftop-Solar-Private-Sector-Financing-Facility_full-report.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }