On-Bill Financing: An Innovative Model for Solar Rooftop Adoption in India
“On-bill financing is a game-changing model that can revolutionize solar adoption in India and beyond. It has several benefits, including lower transaction costs, higher payment security, and standardized documentation. By promoting this model, we can move towards a cleaner, more sustainable future.”
| Country | Program Name | Key Features | References |
|---|---|---|---|
| USA | Property Assessed Clean Energy (PACE) | Financing through property tax bill; Loan is attached to property rather than borrower; Repaid through property tax bill; Low interest rate | [1], [2], [3] |
| Australia | Environmental Upgrade Agreements (EUAs) | Repaid through the utility bill; Loan is attached to the property rather than borrower; Low interest rate | [4], [5], [6] |
| UK | On-Bill Recovery (OBR) | Financing through energy bill; Repaid through energy bill; Low interest rate; Low risk for consumers | [7], [8], [9] |
| Canada | Climate Bonds Initiative (CBI) | Repaid through property tax bill; Loan is attached to the property rather than borrower; Low interest rate; Bond financing | [10], [11], [12] |
| India | On-bill financing (OBF) | Financing through electricity bill; Repaid through electricity bill; Lower transaction time and cost; Aggregation of demand | [13], [14], This article |
In the United States, the Property Assessed Clean Energy (PACE) program allows property owners to finance renewable energy projects through their property tax bill. The loan is attached to the property rather than the borrower and is repaid through the property tax bill. PACE offers low-interest rates and has been successfully implemented in many states in the US.
In Australia, Environmental Upgrade Agreements (EUAs) provide financing for energy efficiency and renewable energy projects. EUAs are repaid through the utility bill and are attached to the property rather than the borrower. This model offers a low-interest rate and has been adopted by many local governments in Australia.
The United Kingdom’s On-Bill Recovery (OBR) model provides financing through the energy bill and is repaid through the energy bill. The model offers a low-interest rate and a low risk for consumers, making it an attractive option for residential consumers.
In Canada, the Climate Bonds Initiative (CBI) provides financing for renewable energy projects through a bond financing model. The loan is attached to the property rather than the borrower and is repaid through the property tax bill.
Overall, these examples demonstrate the success of on-bill financing models in promoting renewable energy adoption in various countries. By adopting similar models in India, we can increase solar rooftop adoption, reduce carbon emissions, and move towards a cleaner, more sustainable future.
References:
https://www.pacenation.us/what-is-pace/
https://www.nrel.gov/state-local-tribal/program-design-and-implementation/pace.html
https://www.energy.gov/eere/slsc/property-assessed-clean-energy-programs
https://www.energy.gov.au/government-priorities/energy-infrastructure/environmental-upgrade-agreements
https://www.financierworldwide.com/australian-cities-adopting-environmental-upgrade-agreements
https://www.energyrating.gov.au/news/environmental-upgrade-agreements-advance-commercial-building-upgrades
https://www.gov.uk/guidance/on
On-bill financing is a financing model that can help accelerate the adoption of solar rooftops in India. Under this model, consumers who are interested in developing rooftop solar projects through a self-owned model can obtain financing through their electricity bill. The model involves three stakeholders, including the consumer, the lender, and the utility. The utility acts as an intermediary between the consumer and the lender, facilitating access to finance and collecting monthly installments on the loans taken by consumers for rooftop solar systems.
On-bill financing has several benefits, including lower transaction costs, higher payment security, and standardized documentation. By promoting this model, we can move towards a cleaner, more sustainable future.
The On-Bill Financing model can be adopted in the Indian context by using the existing distribution channels and existing billing system. This model is suitable for residential consumers who want to install solar rooftops but do not have access to finance.
One potential way to implement this model in India is through collaboration between the government, utilities, and financial institutions. The government can provide incentives and subsidies to utilities and financial institutions to encourage them to promote on-bill financing for solar rooftop projects. The utilities can then work with their preferred banking partners to provide low-interest rate loans to consumers, which can be repaid through their electricity bill.
The Small Industries Development Bank of India (SIDBI) and other non-banking financial companies (NBFCs) can also play a crucial role in promoting on-bill financing for solar rooftop projects. These institutions can provide loans to consumers at a lower interest rate and with more favorable terms than traditional lenders. By partnering with utilities and offering loans through the electricity bill, these institutions can reduce the risk of default and ensure timely repayments.
In conclusion, on-bill financing is an innovative financing model that can help accelerate the adoption of solar rooftops in India. By using existing distribution channels and collaborating with utilities and financial institutions, we can promote this model and move towards a cleaner, more sustainable future.
References:
- https://www.energy.gov/eere/articles/on-bill-financing-energy-efficiency-and-renewable-energy-improvements
- https://www.ndtv.com/india-news/solar-rooftops-now-affordable-with-on-bill-financing-1696523
- https://www.thehindu.com/news/national/karnataka/solar-rooftop-financing-to-be-easier/article6552975.ece
- https://www.renewableenergyworld.com/2016/07/18/on-bill-financing-helps-expand-solar-in-new-york/#gref
- https://www.nrel.gov/state-local-tribal/blog/posts/on-bill-financing-101.html