On Thursday, major Indian solar manufacturer and developer Tata Power Solar announced plans for a new nationwide initiative that will help prospective residential solar users acquire interest-free loans for up to $4,000 for their products. Tata Power Solar, India’s largest integrated solar company, is partnering with Bajaj Finance, to offer a new monthly installment payment plan to solar customers in an effort to make solar a more attractive and affordable option as well as a possibility for the approximately 400 million Indians without reliable power in the country.
The loan option, to be repaid in monthly installments, will be applicable to all Tata Power Solar products including solar lighting products, solar water heaters, and solar panels. The program will be rolled out across 20 cities first before being expanded across the entire country.
“Solar products are the need of the hour, given the increasing power shortage India is facing,” said Gagan Pal, vice president of products at Tata Power Solar. “There are a number of people who are hesitant to invest in solar due to the initial upfront cost. We are sure that this offer, with its strong financial incentive, will help people find our products very affordable.”
Tata Power Solar’s announcement is the latest of several indications that solar will play a powerful role in India’s energy future. Last week a number of tax incentives for the solar industry were announced as part of the new government’s first national budget. The government, led by prime minister Narendra Modi, also announced around $83 million for large-scale solar project development in five states, $66 million for solar water pumps, and $16.7 million for small solar plants along canals to help with irrigation.
Deutsche Bank analyst Vishal Shah called the budget announcement positive for the Indian market, saying “the country has installed around 2.6GW of solar capacity as of May 2014, around two GW of which was installed in the last two years. We expect new installations to be around 1.5GW in 2014 and around 2GW in 2015.”
Upon being elected in June, prime minister Modi said that his government wants every home to be able to run at least one light bulb by 2019. Modi’s election comes with a plethora of social, environmental, and human rights concerns, but his focus on solar may provide a silver lining.
Solar analysts Bridge to India were less enthusiastic about the budget announcements, calling them a “disappointment,” and saying the government had failed to seize the opportunity to show it was serious about its major solar promises. They gave it a score of 3 out of 10. In particular they were let down by the failure of the budget to include an expected upward revision of targets under India’s national solar mission, pointing out that the Ministry of New and Renewable Energy received an allocation for 2014-2015 that was almost the same as the year before.
“The new government has been in office for less than two months,” wrote Bridge. “Given this, one cannot expect too much. Nevertheless, we believe that the budget is a good platform to showcase the government’s vision. In that, we are disappointed.”