Kashmir’s rooftop solar push hits a vendor credibility hurdle

Banks are becoming cautious about financing rooftop solar projects in Kashmir because of concerns over the credibility of vendors, a senior banker said, as Jammu and Kashmir seeks to accelerate installations under the PM Surya Ghar scheme.

Of 61,566 loan applications submitted under the scheme in Jammu and Kashmir, 17,416 have been rejected, including 14,232 in areas served by the Kashmir Power Distribution Corporation Ltd (KPDCL), according to data presented at a government review meeting.

The senior banker, who spoke on condition of anonymity, said banks had little reason to reject a viable credit proposal but were facing difficulties in relying on some vendors operating in the rooftop solar market.

He said some vendors were making promises to customers that raised questions about the viability of projects, while the absence of adequate checks on vendors was making banks more cautious about financing such proposals.

“Why would a bank reject a viable credit proposal?” the banker said.

He said the government needed to strengthen the process for authorising and monitoring vendors to give banks greater confidence while assessing loan applications.

Challenges

The administration has identified bank financing as one of the main hurdles to the rooftop solar programme and directed power distribution companies to examine rejected loan applications with banks, establish the reasons for rejection and resolve eligible cases.

Around 75 per cent of rooftop solar installations in KPDCL areas depend on bank financing, according to officials.

Jammu and Kashmir has received 89,680 applications against a target of 83,500 residential rooftop solar installations by March 31, 2027. So far, 46,133 systems have been installed.

Of the loan applications, 38,773 have been sanctioned and disbursed, while 5,367 remain under process.

The administration has also identified uneven vendor availability, delays in metering and pending power purchase agreements as other impediments to faster implementation.

The government has not said how many of the rejected applications were turned down because of vendor-related concerns, and the banker’s comments do not establish that vendor issues account for all 17,416 rejected applications.

In KPDCL areas, 28,324 rooftop solar systems have been installed, with a combined capacity of 102.55 MW, compared with 17,809 systems with a capacity of 62.69 MW in areas served by Jammu Power Distribution Corporation Ltd (JPDCL).

“The administration has asked power distribution companies to work with banks to review rejected applications and resolve eligible cases as it seeks to convert strong consumer interest into completed rooftop solar projects”, said a government spokesperson.