In on-bill loan financing – third party lender model, the consumers are provided with the capital required for the solar rooftop system as a loan by the developer or a third-party lender.
Benefits to discoms
- Higher adoption of rooftop solar by consumers in the lower consumption slabs can lead to reduced cross-subsidy burden for the discoms.
Benefits to consumers
- Consumers who did not have access to cheap credit are able to install systems under the model.
- Aggregated procurement by the discom can ensure better quality of installation.
Benefits to developers
- Developers get access to new customer segments who could not afford rooftop solar system otherwise.
- Identification and aggregation of consumers by the discoms leads to reduced customer acquisition and business development costs for the developers.
- On-bill payment collection reduces the risk of payment default.
Source : Utility-centric Business Models for Rooftop Solar Models (USAID, 2008)
Target Consumer SegmentConsumers with exclusive roof access and cannot bear the upfront cost of solar system installation
Role of DiscomAggregated procurement, payment collection
Level of involvement by utilityLow
Need for partnershipsMedium
Revenue to DISCOMLow
Risk to UtilityHigh