What are the sources of finance for the solar rooftop developers?

Solar project developers are striving to get finances from banks and private equity players. Indian banks have very limited financing exposure for solar rooftop projects. So far the banks have over 800 Bn $ exposure and 16% of the assets are stressed assets.  Stressed assets are exerting pressure on public sector banks in particular and squeezing credit growth to stressed sectors such as the power sector. The government has taken steps recently to more provide debt financing to the sector. The Reserve Bank of India identified the rooftop solar sector as a priority sector for lending. The government is also considering including rooftop solar PV systems as a portion of housing or housing improvement loan. In addition, the government is offering subsidized capital (30% capital subsidy for residential and institutional consumers), accelerated depreciation tax benefit (to be phased out in 2017), and tax holidays (Minimum Alternate Tax is applicable).
The multilateral development banks (MDBs) are also scaling up debt financing for rooftop solar. They currently offer subsidized loans totaling ~$2.5bn. Although, the Asian Development Bank Facility ($500mn) has not started yet and the Indian Renewable Energy Development Agency (IREDA) Facility ($1.1bn) can be used for renewable projects other than rooftop solar.
However, the total concessional debt capital committed by the government and MDBs is only 10.4% of the total debt capital requirements to meet the government’s 2022 target. There are
also parts of the rooftop solar market that this public debt is unlikely to reach. For instance, projects that target commercial and industrial off-takers cannot take advantage of  government subsidies targeting the residential sector and are often too small to attract financing on a one-off basis.

Subsidized Capital Available for Rooftop Solar through 2022 ($ bn)