MSMEs Hold 15-18 GW Of Untapped Rooftop Solar Potential: Tata Power

New Delhi, Jun 19 (KNN) India's micro, small and medium enterprises (MSMEs) hold significant untapped potential for rooftop solar adoption, although structural and financial barriers continue to limit deployment across the sector, according to Tata Power.

MSMEs Hold Vast Untapped Rooftop Solar Potential

Citing Ministry of MSME data, Tata Power said the sector contributes around 30 percent to India's GDP, over 35 percent of manufacturing output and nearly 45 percent of exports. 

Despite its economic importance, solar adoption among MSMEs remains limited, as smaller businesses often prioritise immediate cash flow and risk considerations over long-term investments, unlike larger firms with greater financial and operational capacity. 

High Energy Costs Strengthen The Case For Solar

Tata Power said many MSMEs operate in energy-intensive sectors such as textiles, metals and ceramics, where electricity accounts for 5-20 percent of operating costs and up to 40 percent in some industrial clusters. 

With rooftop solar tariffs ranging from Rs 3.8-6.5 per unit against grid tariffs of Rs 5.6-9.9 per unit, MSMEs can save Rs 2-4 per unit, helping lower costs and improve competitiveness. 

Financing Constraints Continue To Hinder Adoption

Tata Power estimated that MSMEs have 15-18 GW of untapped rooftop solar potential, constrained by financing and implementation challenges. 

Upfront capital costs, limited access to credit, lack of collateral and the small size of solar loans often impede projects, while low awareness of financing options and incentives, varying state regulations, and operational issues such as rented premises and limited rooftop access further hinder adoption. 

Innovative Business Models Offer New Opportunities

Tata Power said emerging models such as operational expenditure (OPEX) and Renewable Energy Service Company (RESCO), are easing MSME solar adoption by enabling third-party developers to install and operate systems without upfront investment from businesses. 

It also highlighted the benefits of cluster-based deployment and digital platforms, which can lower costs, improve access to financing and simplify processes from feasibility assessments to approvals. 

Policy Support Could Accelerate MSME Solar Uptake

Tata Power noted that policy measures, including capital subsidies, accelerated depreciation benefits, rooftop solar programmes and financing initiatives, are gradually improving the enabling environment for MSME solar adoption.

The company said wider participation by MSMEs could play a significant role in supporting India's target of achieving 500 GW of non-fossil fuel capacity by 2030 while strengthening decentralised power generation.

(KNN Bureau)