A new clean energy finance program may have come along just in time to rescue India’s plan to produce 40 gigawatts of electricity from distributed solar by 2022.
The program brings together India’s Ministry of New and Renewable Energy, the Overseas Private Investment Corporation, and five granting foundations, with the Climate Policy Initiative as program manager.
“While there has been growth in this Indian market segment, it has been from a very small level of installations,” write U.S. analysts Gireesh Shrimali and Justin Guay, so that present-day installations stand at only 1.4 GW. “That means we need a 100% compound annual growth rate between now and 2022—a blistering pace of development.”
Fortunately, the new U.S.-India Clean Energy Finance Program is in place to “leverage grant dollars to mobilize financing for early-stage solar companies,” they write. The dollars are showing up at a time when “the distributed solar market in India is ripe for rapid expansion, with falling technology costs and government initiatives that have reduced the levelized cost of electricity to make rooftop solar competitive.”
Announced a year ago, USICEF “will deploy millions of dollars in early-stage project preparation support, including market estimation, product development and testing, and engineering and legal costs, which will help developers become ready enough to attract commercial investment,” Shrimali and Guay explain. A key goal is to quickly establish a pipeline of local solar projects, to help “young companies and the dozens of others that USICEF will support throughout the life of the program” bring distributed solar up to scale.