Tata Power and SIDBI develop collateral free financing solutions at less than 10% interest rate
New Delhi (Natural Energy News): Tata Power has joined hands with Small Industries Development Bank of India (SIDBI) to provide affordable financing for rooftop solar installations by micro, small, and medium enterprises (MSMEs).
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The financing is exclusively available to Tata Power's MSME customers for both off-grid and on-grid installations.
Tata Power stated that the lack of affordable financing is a significant barrier to rooftop solar development in the MSME sector. To resolve this issue, Tata Power and SIDBI had developed a financing solution at less than 10% interest rate without any collateral. The loan approval will be disbursed within seven days and in four days.
SIDBI Deputy Managing Director Manoj Mittal said that most MSMEs fail to attract developers due to small size or insufficient financial capabilities. "To activate the next phase of development in the rooftop solar market, these classes of consumers need to be renewed and focused," he said.
MSMEs are a huge untapped market for rooftop solar projects. But they are insolvent due to the lack of creditworthiness of borrowers, resulting in limiting the ability of rooftop solar developers to offer their services to these companies.
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To encourage MSMEs to shift solar power, the Government of Gujarat came out with a new industrial policy in August 2020. The government raised the purchase price of surplus solar power (from 1.75 (~ $ 0.02) / kWh to ₹ 2.25 (~ $ 0.03) /. KWh. It gave interest subsidy on term loan to MSMEs to switch to solar power Also announced. Last year, the Government of Gujarat allowed MSMEs to set up solar projects which exceed 100% of their approval load or contract demand from the first provision of 50% of the approved load.
Q3 2020 India Solar Market Update, as of September 2020, the cumulative rooftop solar installation in India is approximately 4.8 GW. To fast track the growth and adoption of rooftop solar, the country needs to create opportunities to tap into new segments of customers. The MSME segment is available not only on a large scale but also to major power consumers who have industrial roofing space available.
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