Clean Energy Finance
Investing in specialized financial institutions that can develop and scale rooftop solar finance solutions for Indian entrepreneurs to catalyze a 15 GW market opportunity and deliver compelling financial returns

With increasing energy demand, high electricity prices and decreasing costs of solar, micro, small and medium-sized enterprises (“MSMEs”) can find rooftop solar to be an attractive low-carbon solution for their electricity needs, but financing is still a key barrier.

MSMEs are critical to the economic engine of emerging markets. In India, these MSMEs are integral to India’s industrialization, accounting for 45% of industrial output. They are also large, and often inefficient, consumers of energy for electricity and industrial processing, accounting for 48% of the total energy consumed in India’s industrial sector (the largest consumer of energy in the country). MSMEs also drive important social benefits, including economic democracy, social fairness, innovation, job creation and economic growth, thereby contributing to a more stable economy.

We believe that there is a unique opportunity to reduce the carbon footprint of India’s industrialization by addressing clean energy financing gaps for MSMEs in ways that can also prove attractive to investors seeking commercial returns. This is important for the global fight against climate change since India is the third largest emitter of greenhouse gases globally. It is also important to improving air quality in India, which is home to 13 of the 20 most-polluted cities in the world. With a vast solar resource and a growing need for clean and renewable energy, the Indian Government has set ambitious targets to deploy 100 GW of solar by 2022 (including 40 GW of rooftop solar).

More specifically, we believe that rooftop solar can be an attractive solution for the electricity needs of MSMEs, particularly as a result of increasing energy demand, high electricity prices for commercial and industrial MSMEs, decreasing costs of solar and a favorable regulatory environment. However, despite attractive unit economics, MSMEs have been excluded from the rooftop solar market due to a lack of available financing. Our research indicates that this 15 GW market represents a $9 billion lending opportunity that is currently unaddressed. We are now currently working on solutions to close this financing gap and drive clean energy deployment for MSMEs in India, harnessing the power of an inclusive financial system.