ADB Approved Loan to finance Rooftop Solar Systems in India

General Studies Paper-3

Context: The Asian Development Bank (ADB) has approved a loan of USD 240.5 million to finance rooftop solar systems in India.

About

• This financing will support tranches 2 and 3 of the Multitranche Financing Facility (MFF) Solar Rooftop Investment Program, initially approved by ADB in 2016.
  • In 2023, the program was restructured to focus specifically on deploying residential solar rooftop systems.
• The approved financing will be allocated to the State Bank of India (SBI) and the National Bank for Agriculture and Rural Development (NABARD).
  • These institutions will provide loans to developers and end-users throughout India for the installation of rooftop solar systems.

Significance of Rooftop Solar Systems

• It can reduce the technical and operational burden by generating electricity close to where it is consumed, thereby decreasing the need for long-distance power supply and the associated system losses.
  • This enhances the efficiency of power distribution and provides a degree of energy independence, minimizing power supply disruptions.
• India’s Aim: India aims to achieve about 50 percent of cumulative electric power installed capacity from non-fossil fuel energy sources by 2030 in line with its global commitments to reduce carbon emissions.
  • ADB’s financing supports these goals and will contribute to the Prime Minister’s Surya Ghar program, which encourages people to install rooftop solar systems across the country

Solar Energy

• Solar energy is the most abundant & cleanest energy resource on earth.
• Solar energy can be used mainly in three ways one is direct conversion of sunlight into electricity through PV cells, the two others being concentrating solar power (CSP) and solar thermal collectors for heating and cooling (SHC).
• Indian Scenario: India is endowed with abundant solar energy, which is capable of producing 5,000 trillion kilowatts of clean energy.
  • India gets around 300 sunny days in a year and solar insolation of 4-7kWh per Sq. m per day.
  • If this energy is harnessed efficiently, it can easily reduce the energy deficit scenario and that too with no carbon emission.
  • In near future Solar energy will have a huge role to play in meeting India’s energy demand.

India’s Solar Energy

• Capacity: India’s installed solar power capacity is about 81 GW (1 GW is 1,000 megawatt), or roughly 17% of the total installed electricity.
  • India’s largest solar parks are located in the north-west, particularly Gujarat and Rajasthan.
  • India currently stands 4th globally in solar power capacity.

India has set following resolute targets to usher in a renewable revolution:

• 500 GW of renewable energy capacity by 2030;
• Meeting 50% of its energy requirement from renewable sources by 2030;
• Reducing the total projected carbon emissions by 1 Bn Tonnes by 2030;
• Reducing the carbon intensity of its economy by under 45%;
• Becoming a net zero carbon country by 2070.

Government Initiatives to Promote Solar Energy Adoption

• Solar Park Scheme, designed to establish 50 Solar Parks of 500 MW and above with a cumulative capacity of ~38 GW by 2025-26.
• PM-KUSUM — aimed to achieve solar power capacity addition of 30.8 GW by 2026 — are transforming India’s agricultural sector by setting up decentralised solar power plants, replacing agriculture diesel pumps with solar agriculture water pumps and solarising existing grid-connected agriculture pumps.
• Rooftop Solar Programme for the residential sector and the Off-grid Solar PV Applications Programme for rural areas are also making solar energy accessible by providing subsidies.
• The International Solar Alliance (ISA), launched in 2015 by the Prime Minister of India and the President of France.
  • It is a member-centric, collaborative platform focused on action aimed at creating 450 GW of renewable energy by 2030.
• The Rooftop Solar Yojana, or the PM Surya Ghar Muft Bijli Yojana, aims to provide 300 units of free electricity every month to light up one crore households.
  • The objective of this scheme is to reduce the electricity costs of the house by installing rooftop solar panels and using solar energy.

Conclusion

• Solar energy has been recognized as an alternative to conventional energy resources.
• Amongst all the clean technologies, solar energy serves as an effective renewable energy resource to mitigate greenhouse gas emissions and reduce global warming.
• Solar energy is one of the resources capable of self-reliant energy generation, reducing foreign energy dependence.
• This necessitates the wide use of solar panels with better efficiency to meet the energy requirements from solar resources.