Que: As a financial enabler in solar rooftop projects, take us through a detailed overview of Credit Fair and its recent solar energy projects.

Ans: Credit Fair is a lending platform specifically focused on enabling solar rooftop projects. Our platform onboards solar rooftop panel manufacturers and installers/EPCs (merchants), who source leads for solar rooftop projects that Credit Fair then finances. We offer FOS and digital journey services to make the loan application process easy and convenient for our clients.

At Credit Fair, we have a unique low-cost/No cost EMI model for end consumers, where EMIs equal low-cost savings. We finance consumer residential rooftop solar projects and MSME small projects up to 100 KW. We are now starting to finance housing society rooftop solar projects. Currently, we have a monthly approval run rate of around INR 8 crore with approximately 400-500 loan applications. We are expecting to grow threefold in the next year. We have tied up with big OEMs and merchants like Solar Square, TATA Power, UTL Solar, Navitas Solar, and Redington, which has helped us to provide our clients with quality products and services.

Que: Highlight some key trends in solar rooftop financing and the major breakthroughs in the industry.

Ans: Solar rooftop financing has significantly risen in recent years, and several key trends have emerged in this industry. Firstly, the government has started focusing on solar rooftop solar (RTS) panel financing. Initially, the focus was only on the commercial and industrial sectors, but now it has been extended to include RTS. This move aims to encourage more people to adopt solar power and make the country energy self-sufficient.

Secondly, the central government has launched a subsidy program under Direct Benefit Transfer, where 25 percent of the project value will be given as a subsidy directly to the end user. This program has been extended till 2026, and it has significantly boosted the adoption of solar power in India.

Thirdly, big OEMs like TATA Power have started focusing on RTS from the year 2022. This move is expected to bring in more competition and drive down the prices of solar power systems.

Fourthly, net metering is now allowed to 10 KW in residential areas and up to 500 KW in MSME and housing societies across the country. This has made it easier for consumers to sell the excess power they generate back to the grid and reduce their electricity bills.

Fifthly, NGOs like Smart Power (Global Alliance Energy for Planet & People) have been created by Amazon, Ikea Foundation & Rockefeller to develop rooftop solar in rural MSMEs. This move aims to promote the use of solar energy in rural areas and provide access to affordable and sustainable energy sources. Lastly, green financing-focused funds and banks introduce schemes with cheaper debt costs. This move aims to provide easier access to financing for solar power systems and encourage more people to adopt solar power.

Que: Shed some light on the different kinds of models in the financing of solar rooftop projects. What are the various parameters you keep in mind while investing in such projects?

Ans: Solar rooftop projects can be financed through different models, such as interest-based, subvention-based, cash flow-based underwriting, and buyback or repossession options. Financing institutions consider parameters like credit history, project feasibility, Discom approvals, and co-applicants while investing in these projects. Cash flow-based underwriting is a popular model where the customer pays an EMI that does not exceed the electricity savings generated by the solar system. This model is beneficial for customers looking to reduce their electricity bills. The buyback or repossession option provides security to the financing institution and encourages them to offer loans to customers with a lower credit score. The ultimate goal of financing solar rooftop projects is to promote sustainable energy sources, reduce carbon emissions, and ensure the project's long-term viability.

Que: What is your outlook on the new laws passed by the Government of India on green financing? How does it impact the prospects of Fintech Companies including the likes of Credit Fair?

Ans: I have a positive outlook on the new laws passed by the Government of India on green financing. The government has categorised it as a priority sector lending, meaning we can get a lower cost of funds from PSU banks and global funds with a green energy mandate.

As a fintech company, Credit Fair can benefit from better digital user experiences and faster approvals through our platform. These laws have created a conducive environment for the growth of fintech companies in the green financing sector. We are confident that these initiatives will further promote the adoption of renewable energy sources and drive sustainable development in the country.

Que: Describe some of the major impediments faced by MSMEs in the solar power sector.

Ans: MSMEs in the solar power sector often face several challenges in their operations. As installers/EPCs, they are responsible for installing rooftop solar panels. However, one of the significant impediments they face is the lack of sufficient and timely credit lines or PO finance facilities. As they need to pay in advance to OEMs, this becomes a significant challenge for them.

Moreover, these MSMEs often operate on a very small scale, and there is a lack of skilled labour and engineers available to them. OEMs should create an ecosystem to support these MSMEs so they can benefit from it. Additionally, it is often difficult to convince the end consumers about the advantages of rooftop solar, and this lack of awareness is another impediment that MSMEs face. Furthermore, not many financing options are available for the RTS consumers of these MSMEs, which becomes a major challenge. Lastly, AMC contract services for panel maintenance should be introduced to ensure more effective electricity generation. Overall, there is a need to create more awareness, develop a supportive ecosystem, and provide financing options to MSMEs in the solar power sector to help them overcome these impediments.

Que: How does Credit Fair look at the EV sector in 2023? What will be your growth strategies going forward?

Ans: As a forward-thinking green financing company, we are incredibly optimistic about the future of electric vehicles. We believe that electric two-wheelers and three-wheelers will be the major growth drivers in this sector. We have already tied up with many large OEMs and are constantly exploring new partnerships to expand our reach. We are investing heavily in our field team to cater to the growing demand for EVs in tier 2 and 3 cities. Our strategy involves increasing our presence in these cities, building relationships with local dealers, and providing customized financing solutions to customers.
In the coming year, we are targeting to finance over 10,000 EVs, representing a ten-fold growth for us. We are confident that our innovative financing solutions and strong partnerships will enable us to achieve this ambitious target and contribute to developing the EV sector in India.

Que: In the recent post-budget webinar on green growth, PM Modi said that India's commanding position in the renewable energy space will ensure a commensurate change in the world. What would be the contribution of Credit Fair to this?

Ans: Credit Fair's contribution to India's commanding position in the renewable energy space would be to make it easy for individuals and MSMEs to contribute to a greener India. The lack of financing has been a critical bottleneck in adopting renewable energy.

Credit Fair aims to help solar installers and EV dealers grow their business by over 25 percent annually by expanding their customer base. They plan to help 1 million Indians reduce their carbon footprint in the next three years. By enabling more people to invest in green energy, Credit Fair is playing a crucial role in India's green growth and helping to ensure a proportional change in the world, as mentioned by PM Modi in the recent post-budget webinar.