Banks – Are you slowing clean energy adoption

Fact:  In India, Clean energy adoption is being slowed down by lack of financing products on the ground.

Industrial, institutional as well as residential buyers have almost no avenues for smooth  financing of clean energy solutions.  Anyone who is out there knocking on doors, encouraging users to switch to solar – has seen this monstrous problem first hand.

 

LIFE IN THE CLEAN ENERGY LANDSCAPE of INDIA

Awareness buillding with many targeted clients – Check

Prospecting and explaining the cost benefit solution of solar – Check

Client desire to buy – Check

Client wants to finance the solar asset from the bank  –  Not possible !

 

Banks are happy to finance commercial vehicles or cars with all enthusiasm.  These are products that are fast depreciating assets unlike solar.  Further solar in every instance (home or factory) will reduce the monthly cash outflow for the client.  Which is what reduces risk for the lender and what a banker should be looking to support.

But the reality is banks are not considering solar plants as a collateral.  They ask the client to provide his land, buildings, or home as a collateral for acquiring an income producing asset.  Why ?

Example:  A solar rooftop plant is not considered as a secure collateral by the leading banks.   For a solar rooftop installation of Rs.6 lakhs the bankers  ask for a mortgage on the home which could be worth more than a crore.

 

Solution needed:   RBI, MNRE and banks need to get more clean energy friendly.  Soon !

The 100GW goal set by Hon. Prime Minister must be achieved.    And support from the banks is critical to this mission.

 

Would you like to share your thoughts, suggestions on this huge blockage facing our nation ?