ADB approves $650 million loan to boost rooftop solar in India

The Asian Development Bank (ADB) has authorised a $650 million policy-based loan to support the Government of India in speeding up rooftop solar deployment and increasing access to clean, affordable energy for 10 million households by 2027.

ADB is a prominent multilateral development bank dedicated to promoting inclusive, resilient, and sustainable growth throughout Asia and the Pacific. Collaborating with its member countries and partners to address complex issues, ADB employs innovative financial instruments and strategic alliances to improve lives, develop quality infrastructure, and protect the environment. Established in 1966, ADB is owned by 69 members, including 50 from the region.

The financing through Subprogram 1 of the Accelerating Affordable and Inclusive Rooftop Solar Systems Development Program will back the government’s key initiative—Pradhan Mantri Surya Ghar: Muft Bijli Yojana (PMSGMBY)—which seeks to expand the availability of rooftop solar systems across the country.

“The program is accelerating India’s clean energy transition by removing long-standing barriers to rooftop solar adoption, including financing constraints and regulatory gaps,” said ADB Country Director for India Mio Oka. “It is making rooftop solar affordable and accessible for millions of households while creating green jobs, empowering women, and strengthening the financial health of the power sector.”

PMSGMBY offers financial support to residential consumers for installing rooftop solar systems up to 3 kW, providing a 60% subsidy for systems up to 2 kW and a 40% subsidy for the additional capacity between 2 kW and 3 kW.

Key reform areas in the program include establishing uniform operational guidelines and quality standards for residential rooftop solar systems, and promoting widespread adoption among low- and middle-income households through collateral-free, low-interest loans.

Aligned with India’s Nationally Determined Contribution targets, the program will improve the skills and capacity of at least 5,000 personnel, including 1,500 women. It will also support the development of utility-led aggregation models, model solar villages, and promote a strong vendor ecosystem.

ADB’s intervention is expected to play a key role in achieving the nationwide goal of installing 30 gigawatts of rooftop solar capacity, reducing annual CO2 emissions by 28.8 million tons, and providing affordable solar energy to millions of households. It will also stimulate private sector investment, creating opportunities for manufacturers, vendors, and service providers across the renewable energy sector.

ADB’s financing for the program includes $3 million in technical assistance to support reform implementation, enhance institutional capacity, and promote gender-inclusive participation in the rooftop solar sector.