Scaling up rooftop solar power in India: the potential of solar municipal bonds

This paper—produced in collaboration between Climate Policy Initiative (CPI), Stockholm Environment Institute (SEI), and Indian Council for Research on International Economic Relations (ICRIER), and funded by the Swedish Energy Agency as part of its support for the New Climate Economy project—proposes the use of municipal bonds to support the scale-up of rooftop solar in India, and details how such bonds could be designed and implemented. The adoption of rooftop solar is primarily driven by expected savings in electricity costs, the need for an alternative source of electricity, and the desire to mitigate climate change risk. However, three key barriers hinder the growth of this technology in India: high upfront capital expenditure, perceived performance risk, and limited access to debt capital. To address the first two issues, CPI has previously advocated for a third-party financing model.