As lending to solar rooftop moves at snail’s pace, SBI plans to scale up awareness camps

In May 2016, the World Bank gave the State Bank of India a “loan support” of $625 million (₹ 4,125 crore at the then exchange rate), so that SBI could on-lend it to solar rooftop projects in India.

Nearly four years down the line, SBI has lent only a third of it. In an email to BusinessLine at the end of January, the World Bank said: “So far, SBI has disbursed $211.42 million under the grid-connected rooftop solar programme of the World Bank.” (An SBI official confirmed to BusinessLine that the number has not changed significantly since then.)

There are two views on the disbursement figure. SBI believes the progress to be satisfactory, though it acknowledges it could be better. Those in the solar industry are not so sanguine. Several have said that the record is bad, especially considering that the loans are available to solar rooftop projects at an interest rates of 8-8.5 per cent.

Industry sources said SBI might feel the disbursement is satisfactory, given the constraints rooftop projects face in the market. Indeed, the bank official did say that progress would have been faster if only, apart from an issue of awareness, the various electricity distribution companies (discoms) did not keep putting spokes in rooftop solar rollout. Discoms are known to do so, because when a paying customer goes in for his own rooftop plant, they lose that customer.

Ambiguous regulatory environment

“Rooftop solar (industry) operates in a somewhat ambiguous regulatory environment which makes it easy for discoms to put obstacles in the way of the projects,” said Manu Karan, Vice President, Business Development, at CleanMax, a solar energy company. Generally, these obstacles come in the form of holding up approvals. For instance, in Gujarat, a third party cannot put up a rooftop plant; only the roof owner can.

Indeed, India’s record of setting up rooftop solar plants, relative to the ambition, has been embarrassing. The government, in 2014, had set a target of 40,000 MW of rooftop capacity to be set up by 2022, but the tally now, according to the consultancy Mercom, is 4,400 MW.

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