Green Retail and MSME Lending in India's Energy Transition Sizing the NBFC-Addressable Market for Solar, Electric Mobility and Storage, FY2026 to FY2031

Author

Rutwik Babaji Tattu


Abstract

 India has set a target of 500 GW of non-fossil energy capacity by 2030. Utility-scale renewable projects are well served by banks and infrastructure lenders, but small green assets in retail and micro, small and medium enterprise (MSME) segments are less served. This paper estimates the annual debt demand, through FY2031, for four such asset classes that is open to non-banking financial companies (NBFCs): residential rooftop solar, commercial and industrial (C&I) rooftop solar, electric vehicles (EVs), and behind-the-meter battery energy storage systems (BESS).

The study uses a bottom-up model with Conservative, Base and Aggressive scenarios. The Base case gives an addressable annual debt volume of ₹62,263 crore in FY2031, within a range of ₹34,196 crore to ₹1,03,550 crore. EV financing makes up about 77% of the Base case. Sensitivity tests show that financing penetration has the largest effect of the variables tested, and that the effect of battery cost is smaller and two-sided. The paper argues that a green NBFC should stage its entry, starting with residential solar and moving into commercial EV financing once adoption and loss data are available. Several inputs remain unverified, and the paper identifies them. The results are an upper bound on addressable demand, not a forecast of lending volume.


Keywords

green finance, NBFC, rooftop solar, electric vehicles, battery storage, India, market sizing



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References


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