NBFCs Strengthen Partnerships to Scale Rooftop Solar Adoption

Scaling rooftop solar in India requires addressing barriers beyond the cost of equipment. By building partnerships with installers, technology providers, utilities, and government agencies, NBFCs can transform rooftop solar into a seamless experience for customers.

January 05, 2026. By News Bureau

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Pratik Mandvia

Mufin Green Finance

NBFCs

Rooftop Solar Adoption

MNRE

MSME

Solar energy

India’s rooftop solar sector has shifted from being a niche opportunity to becoming a central component of the renewable energy transition. Data from the Ministry of New and Renewable Energy (MNRE) shows that India has achieved close to 19.9 GW of installed rooftop solar capacity. While this marks a significant milestone, it still represents only a fraction of the country’s vast untapped potential across residential, commercial, and industrial segments.

The past year has underlined this momentum. In 2024, rooftop solar additions reached 4.6 GW, which was a 54 percent increase compared to the previous year. The residential segment is steadily expanding as well, now crossing 3 GW of installed capacity, accounting for nearly one-fourth of the total distributed rooftop market. These figures highlight both the growing appetite among customers and businesses and the structural challenges that must be addressed to unlock further scale.

Financing and the Role of NBFCs

One of the greatest barriers to rooftop adoption is the high upfront cost. Even when customers understand the long-term savings from lower electricity bills, the initial investment is often prohibitive. This is particularly true for households, MSMEs, and smaller industries that operate with limited working capital. In this context, Non-Banking Financial Companies (NBFCs) are emerging as critical enablers.

NBFCs already contribute a significant share of retail and MSME lending in India. A KPMG report notes that NBFCs serve segments of the population that traditional banks do not reach effectively. Their agility and distribution strength give them the ability to design customised financial products for rooftop customers. By offering flexible tenors, linking EMIs to expected electricity savings, and providing add-on loans for technologies such as battery storage or EV chargers, NBFCs can make rooftop adoption more accessible. They are also able to employ alternative credit assessment tools, enabling them to serve customers without traditional credit histories.

Why Partnerships are Critical?

Financing is essential, but on its own, it is insufficient. Rooftop projects are multi-step processes that involve procurement, installation, grid interconnection, regulatory approvals, and long-term maintenance. If these steps remain fragmented, customers face delays and uncertainty, which discourages adoption. NBFCs can create far greater impact when they embed themselves into this broader ecosystem.

By building partnerships with installers, technology providers, utilities, and government agencies, NBFCs can transform rooftop solar into a seamless experience for customers. Strong coordination ensures that financing is aligned with project execution, that subsidies are integrated smoothly into disbursements, and that system quality is guaranteed through vetted partners. Digital integrations with technology platforms further reduce paperwork, accelerate approvals, and allow real-time monitoring of system performance. In short, partnerships enable lenders to move from being passive financiers to active facilitators of rooftop adoption.

Models of Collaboration

The partnerships between NBFCs and other ecosystem players can take different forms, but the principle remains the same: reduce friction and improve execution. In some cases, NBFCs collaborate closely with installer networks, pre-approving loans and disbursing funds upon project completion, which shortens sales cycles and builds trust.

In other situations, integration with digital technology platforms enables instant eligibility checks, e-signatures, and automated performance tracking. Coordination with utilities and government bodies helps align loan repayment with subsidy inflows or net-metering approvals, easing both installer cash flows and customer costs.

For consumers who remain hesitant to take out traditional loans, NBFCs can support lease or power purchase models where the repayment structure is directly tied to the electricity generated by the rooftop system. These structures provide flexibility, lower the perceived risk for consumers, and still ensure bankability for financiers.

Managing Risks Responsibly

As the sector grows, NBFCs must address risks on multiple fronts. Financial risk must be managed alongside technical and regulatory risks. This requires careful underwriting that looks not only at a borrower’s repayment capacity but also at the technical viability of the rooftop project. Assessing the quality of modules and inverters, ensuring compliance with local electricity regulations, and validating rooftop structures are all part of a comprehensive due diligence process.

Risk can also be mitigated by linking disbursements to project milestones, using third-party audits for quality verification, and relying on warranty-backed procurement contracts. The increasing availability of IoT-enabled inverters and digital monitoring tools also allows financiers to track performance in real time, identify issues early, and tie service obligations to measurable data. These measures not only protect lenders but also enhance consumer confidence, creating a virtuous cycle of trust and adoption.

Policy Tailwinds for Adoption

Government initiatives continue to shape the rooftop solar landscape. Central and state-level subsidy programs, streamlined net-metering policies, and rising domestic manufacturing of solar modules are all improving the financial viability of projects. The sharp rise in rooftop installations during 2024 underscores how responsive adoption is to supportive policies when combined with financing and execution readiness.

For NBFCs, aligning loan structures with these policy incentives is crucial. By designing products that anticipate subsidy timelines and grid connection approvals, lenders can reduce friction for consumers and installers while ensuring smoother repayment cycles.

The Scale of the Opportunity

Independent market research suggests that the rooftop solar market will expand rapidly in India throughout this decade. Projections indicate multiple-fold growth in installed capacity and market size by 2030. Beyond simple rooftop installations, the integration of battery storage, smart meters, and electric mobility infrastructure will transform rooftops into decentralised energy hubs. This evolution creates an even larger opportunity for NBFCs, which can expand from offering standalone solar loans to financing bundled clean energy ecosystems.

The Way Ahead

Rooftop solar in India has proven its potential, but scaling it further requires addressing barriers beyond the cost of equipment. Financing solutions provided by NBFCs are vital, yet their impact multiplies when embedded within strong partnerships that connect every part of the value chain. Collaboration with installers ensures quality, with technology platforms ensures efficiency, and with utilities ensures regulatory compliance and subsidy integration.

The future of rooftop solar adoption will be determined by how effectively these partnerships are built and managed. NBFCs are uniquely positioned to lead this shift, combining financial innovation with operational integration. If they succeed in strengthening these collaborations, India can unlock the enormous potential of its rooftops and take a significant step toward its renewable energy goals.

- Pratik Mandvia, Solar Business Head, Mufin Green Finance