India’s clean energy transition is creating significant opportunities for SMEs, particularly through rooftop solar (RTS). WRI India’s study shows that cluster-based demand aggregation and financing tools like credit guarantees and subsidies can address adoption barriers. Capacity-building within clusters and the RESCO model further reduce costs and risks, making RTS viable.
Meanwhile, India’s solar sector is witnessing rapid expansion, with solar module manufacturing capacity nearly doubling, from 38 GW in March 2024 to 74 GW in March 2025, within a year. Solar PV cell manufacturing capacity increased from 9 GW to 25 GW, while the launch of India’s first 2 GW ingot-wafer manufacturing facility marked a major milestone, further bolstering the country’s solar supply chain. By July 2025, the country’s solar capacity had risen to 119.02 GW. Backed by supportive policies, targeted subsidies, and global initiatives such as the International Solar Alliance (ISA) and One Sun, One World, One Grid (OSOWOG), India is firmly strengthening its position as a global renewable energy leader.
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Amid India’s fast-paced renewable energy transition, SMEs are increasingly seen as important stakeholders with much to gain from embracing sustainable power. The World Resources Institute (WRI) India, in a new study, highlights that rooftop solar (RTS) can help SMEs reduce power expenses substantially and mitigate capital constraints as the country advances its renewable energy transition.
India currently has about 3.3 lakh registered SMEs, most of which are heavy electricity users, particularly in manufacturing and process-driven industries.
The study reveals that many SME rooftops remain underutilized, presenting a major opportunity for RTS deployment. However, SMEs often lack the resources to independently assess and implement RTS. To mitigate these hurdles, the study emphasizes the importance of demand aggregation—a mechanism that consolidates RTS demand from multiple enterprises in a cluster into a single package, which is then offered to solar vendors through a competitive bidding process. This approach lowers overall system prices, improves service offerings, and makes RTS adoption more viable for small units.
WRI India tested this model in the Yamunanagar Plywood Cluster of Haryana, where demand aggregation reduced RTS system prices by approximately 7%. Similar assessments were conducted across four micro, small, and medium enterprise (MSME) clusters in the state, demonstrating the replicability of this approach. Importantly, these open-source assessments can serve as valuable tools for renewable energy service companies (RESCOs), financial institutions, investors, and governments by de-risking investments and offering precise data on RTS potential in specific clusters.
Although promising, the RTS adoption among SMEs is hampered by technical, regulatory, and financial barriers. Owners typically focus their resources on production and marketing activities, leaving little capacity to explore clean energy opportunities.
Moreover, SMEs tend to pursue RTS projects independently, thereby missing out on the benefits of aggregation.
Capacity-building sessions within clusters have proved effective in generating awareness and interest, but the study stresses that sustained institutional support is also necessary.
The study emphasized that financing is critical for advancing this energy transition, calling for cluster-level business models supported by both public and private banks. It noted that tools such as credit guarantee funds to secure lenders, capital subsidies, and partial risk-sharing mechanisms through existing banking channels can significantly reduce risks. These measures would make rooftop solar adoption more accessible and attractive for SMEs, thereby accelerating renewable energy uptake.
State and central policies will also be crucial for clean energy transition among SMEs. For instance, the study noted, the interest subsidy clause in Haryana’s renewable energy scheme proved instrumental in enabling financing for one SME under WRI’s intervention. Enhanced involvement of the Ministry of MSMEs and its state-level affiliates in promoting awareness and providing technical guidance on clean technologies could further accelerate RTS deployment.
The study further highlights the potential of the RESCO model combined with demand aggregation as a sustainable strategy to scale RTS adoption without over-reliance on subsidies. Under the Renewable Energy Service Company (RESCO) model, a developer finances, builds, operates, and maintains the RTS system on a rented rooftop, while the SME purchases electricity generated at a pre-agreed tariff—usually cheaper than grid electricity. This arrangement eliminates the need for upfront investment by SMEs and reduces their financial risks, making RTS adoption more attractive.
India expands solar manufacturing
As of July 2025, India’s total installed solar capacity stood at 119.02 GW. This comprised 90.99 GW from ground-mounted projects, 19.88 GW from grid-connected rooftop systems, 3.06 GW from hybrid projects, and 5.09 GW from off-grid installations. These figures highlight India’s diversified approach to renewable energy expansion.
This progress underscores the effectiveness of India’s policies and long-term planning under national leadership. In line with its COP26 pledge, India is moving towards its target of 500 GW of non-fossil fuel-based electricity capacity by 2030—a cornerstone of its clean energy transition and climate commitments. By July 2025, solar power capacity had increased by 4,000%, while the country’s overall renewable energy capacity reached 227 GW.
India’s solar manufacturing ecosystem has also expanded rapidly. The sector now includes domestic production of solar modules, PV cells, and ingots and wafers, reducing dependence on imports and strengthening self-reliance. In just one year, solar module manufacturing capacity nearly doubled—from 38 GW in March 2024 to 74 GW in March 2025. Solar PV cell manufacturing capacity also grew sharply, from 9 GW to 25 GW. A significant milestone was the commissioning of India’s first 2 GW ingot-wafer facility, completing the solar supply chain.
Government initiatives have played a pivotal role in driving this growth. Policies require that projects under schemes like the Rooftop Solar Programme, PM-KUSUM, and CPSU Scheme Phase II use domestically manufactured panels and cells. Additionally, the Basic Customs Duty (BCD) introduced in April 2022 on imported solar cells and modules has made foreign products costlier, creating a stronger market for Indian alternatives and boosting local manufacturing.
To further accelerate adoption, the government has launched flagship programs including:
India is also strengthening its leadership in global solar initiatives.
Together, these achievements reflect India’s growing stature as a global leader in solar energy. The country has overtaken Japan to rank as the world’s third-largest solar power producer, with International Renewable Energy Agency (IRENA) data showing India’s output at 1,08,494 GWh, ahead of Japan’s 96,459 GWh.
Conclusion
India’s clean energy transition highlights both opportunity and leadership. For SMEs, rooftop solar offers a pathway to cut costs, boost efficiency, and scale adoption through models like demand aggregation and RESCO. Simultaneously, country’s solar ecosystem is expanding rapidly, with growing manufacturing strength and supportive policies ensuring self-reliance. Initiatives like ISA and OSOWOG further position India as a key driver of international collaboration, marking a decisive step toward sustainable, inclusive, and resilient energy growth.
1. How can SMEs in India benefit from rooftop solar installations?
Rooftop solar helps SMEs cut electricity costs and reduce capital strains. Cluster-based demand aggregation, financing tools like credit guarantees, and models like RESCO enable viable and cost-effective solar adoption.
2. What is the RESCO model and why is it useful for SMEs?
Under the Solar Renewable Energy Service Company (RESCO) model, a third-party developer installs and maintains the solar system, while the SME pays only for the electricity it uses—eliminating upfront investment and reducing risk.
3. How quickly is India expanding its solar manufacturing capacity?
Solar module manufacturing nearly doubled—from 38 GW in March 2024 to 74 GW by March 2025. PV cell capacity surged from 9 GW to 25 GW, and India unveiled its first 2 GW ingot-wafer manufacturing facility, strengthening the domestic supply chain.
4. What financial support is available for SMEs to adopt rooftop solar?
SMEs can tap into government subsidies, interest subsidies, MSME loan schemes, and customizable rooftop solar loans (~₹10–15 lakh), making solar adoption more affordable and sustainable.
5. How do national and global initiatives support India’s solar growth?
India’s solar transition is backed by global programs like the International Solar Alliance (ISA) and OSOWOG, while national schemes like PM Surya Ghar Muft Bijli Yojana are promoting rooftop solar at scale. These initiatives collectively reinforce India’s leadership in renewable energy deployment.
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