Oakridge Energy, an Indian rooftop solar installer, has raised a line of credit from Maanaveeya Development & Finance Private Limited (Maanaveeya), Oikocredit’s financing arm in India. Oikocredit is a cooperative society that offers loans or investment capital for microfinance institutions, cooperatives and small and medium-sized enterprises in developing countries.
Responding to queries on the transaction, Shobhit Kumar, director of sales at Oakridge Energy, said, “Residential rooftop solar is a fast-growing segment in India, expected to be about 5,000 MW in five years. We have evolved a holistic offering whereby the client can reduce his bill dramatically (sometimes by over 80 percent) and substitute a portion of his electricity bill with clean energy. Access to finance is a key issue faced by residential users while going solar. Although costs have dropped recently, the relatively high upfront costs are a deterrent to adoption. Through this credit line from Manaveeya (Oikocredit’s financing arm in India), we will be financing hundreds of home owners in north India via convenient three- to five-year payment plans.”
Kumar, however, did not disclose the deal size due to confidentiality constraints.
High upfront cost of rooftop solar system is the biggest deterrent when it comes to residential solar installations along with difficulty in securing project finance. Delays in subsidy disbursement is the other challenge that is hampering the growth of residential rooftop solar in India.
Lately, a growing number of start-ups have raised small rounds of funding in the sector. In November 2018, Freyr Energy, a Hyderabad-based rooftop solar company, raised ₹270 million (~$3.81 million) through a mix of equity and debt investments.
In June 2018, ZunRoof, an Indian solar rooftop start-up, raised ₹16.6 million ($0.25 million) in second round of angel funding from I3N (intellecap impact investment network) led by Pradeep Tharakan, senior energy specialist at Asian Development Bank (ADB), Vismay Sharma, managing director at L’Oreal (UK & Ireland), Ajith Pai (Paipal Ventures), Gaurav Gupta (Asia Director, Dalberg Advisors) and a group of IIT Kharagpur alumni based in the U.S.
Prior to that, Oorjan, a firm active in the rooftop solar PV segment, raised ₹30.8 million ($450,000) in seed funding to help expand its presence in the Indian rooftop solar sector.
Image credit: Cleantech Solar