Rooftop solar firms look to raise equity investment

Posted · Add Comment

Dozens of rooftop solar energy start-ups in India are looking to raise equity funding at a time when the sector needs to speed up capacity expansion to achieve the target of 40 gigawatt (GW) of installed capacity by 2022.

Several of these companies are looking for equity funding before they tie up loans from large financial investors such as the World Bank and the Asian Development Bank (ADB), company executives said.

Over $2.2 billion worth of loans are likely to be available for the rooftop sector starting this year. But that would require developers to raise equity funding first.

Clean Max Enviro Energy Solutions Pvt. Ltd, the largest rooftop solar projects developer by market share, is looking to raise its first equity funding early next year, managing director Kuldeep Jain said without disclosing details.

Amplus Energy Solutions Pvt. Ltd, which is backed by private equity firm I Squared Capital and counts Wal-Mart Stores Inc., Yamaha Corp. and hotel chain Hilton Worldwide Holdings Inc. as its customers, is looking to tie up loans worth Rs200 crore from the World Bank to fund its rooftop projects, said chief executive Sanjeev Aggarwal.

I Squared last year invested $150 million in the company for an equity stake. As it executes more projects, Amplus could also do with more equity infusion from I Squared, Aggarwal said. Amplus is the country’s second-largest rooftop solar projects developer.

The World Bank had in June said it would invest $625 million in India’s rooftop solar sector, while the ADB said this month that it plans to provide $500 million in financing to the sector.

Executives of both the financial institutions said they were preparing to begin these investments. The World Bank project is being implemented by the State Bank of India, which will lend funds to developers of commercial and industrial rooftop photovoltaic (PV) systems. ADB’s financing will be through Punjab National Bank.

“The project will finance the installation of at least 400 megawatt (MW) of grid-connected rooftop solar photovoltaic across India,” Simon Stolp, lead energy specialist, World Bank, India, said in an email. “The project will support a number of solar PV business models, to expand the reach of rooftop PV systems to a variety of customer groups,” he added.

India needs as much as $200 billion to meet its target of installing 100GW of solar power and 60GW of wind power by 2022. Of the planned solar capacity, 40GW has to come from rooftop projects.

The country’s rooftop solar market has added capacity at the fastest pace this year and crossed 1GW in total installed capacity, according to Bridge To India, a renewable energy-focused consultancy and research firm.

Bridge to India expects the sector to reach a total capacity of 12.7GW by 2021 (

The rooftop solar market in India has grown at a compound annual growth rate of about 90% in the past two years, while the cost of installing rooftop solar has fallen by 12% per annum for the past four years.

“Whenever an industry grows at that kind of a scorching pace, there is space as well as need for multiple players,” Clean Max’s Jain said. “By nature, it ends up being a fragmented, long-tail market. It is a low-entry barrier business and hence there is a lot of excitement to enter it.”

Sunvest Energy Pvt. Ltd, which is focused on the residential and small scale rooftop market, is also hoping to raise equity, according to founder and chief executive Sishir Garemella, a former Barclays Capital and L&T Infrastructure Insurance Co Ltd executive.

“Including pipeline, we are at 20 projects right now and our 18 months goal is to get this number up to 120,” Garemella said, adding that he would look to tie up loans from World Bank, ADB or other investors for these projects.

Mynergy Renewables Pvt. Ltd, which is executing projects for a public sector bank, is also looking for early stage funding, chief executive Bhaskar Deol said.

The new loans are a part of the efforts of the ministry of new and renewable energy to line up low-cost financing for the rooftop sector from German bank KfW, World Bank and ADB.

Last year, KfW said it would issue low-interest loans of about €1 billion over the next five years for India’s rooftop solar projects, construction of solar energy farms and for self-contained solar power facilities.


Leave a Reply

Your email address will not be published. Required fields are marked *