ADB Approves $650 Million Loan to Drive India’s Rooftop Solar Push

The Asian Development Bank (ADB) has approved a $650 million policy-based loan to help the Government of India accelerate rooftop solar adoption and expand access to clean, affordable energy for 10 million households by 2027.

In a press release, ADB said the financing for the program also includes $3 million in technical assistance to help implement reforms, build institutional capacity, and promote gender-inclusive participation in the rooftop solar sector.

The latest investment follows ADB’s earlier $460 million loan aimed at providing farmers in Maharashtra with reliable daytime solar electricity for irrigation. That loan was also intended to modernize rural power infrastructure, promote distributed renewable energy generation, and improve agricultural productivity.

Key components of the Maharashtra program include modernizing the state’s distribution network to make it renewable-energy-ready and contributing to a viability gap funding facility to support 1,000 megawatts (MW) of decentralized solar generation.

Benefits Under the Rooftop Focused Loan

Under the Pradhan Mantri Surya Ghar: Muft Bijli Yojana (PMSGMBY), residential consumers will receive financial assistance to install rooftop solar systems of up to 3 kilowatts (kW). The scheme offers a 60% subsidy for systems up to 2 kW and a 40% subsidy for additional capacity between 2 kW and 3 kW.

The financing under Subprogram 1 of the Accelerating Affordable and Inclusive Rooftop Solar Systems Development Program will support PMSGMBY, which aims to make rooftop solar systems widely accessible across the country.

About the Funding

“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.”

Key reform areas under the program include developing uniform operational guidelines and quality standards for residential rooftop solar systems, and facilitating mass adoption among low- and middle-income households through collateral-free, low-interest loans. Aligned with India’s Nationally Determined Contribution targets, the program will enhance 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 a robust vendor ecosystem.

ADB’s intervention is expected to significantly contribute to India’s nationwide objective of installing 30 gigawatts of rooftop solar capacity. It will also catalyze private sector investment and create opportunities for manufacturers, vendors, and service providers across the renewable energy value chain.

ADB's website claims that it has funded almost $60 billion worth of Infra linked projets in India till date.