Opinion: Green Financing in 2025: Trends and Projections Driving Solar Energy Growth

The conscientious shift to sustainability is transforming the global energy landscape as green financing continues to emerge as a key driver. As countries push towards ambitious net-zero targets, solar energy stands out as a major focus of innovation in financing. In 2025, we can expect green financing tools to tackle long-standing barriers to funding, project implementation, and performance management.

Here’s a closer look at the trends and what they mean for the future of solar energy:

1. Faster and easier financing applications

Closer to home, the traditional loan process for solar energy projects in India has often been slow and complicated, discouraging potential adopters. By 2025, green financing will increasingly adopt streamlined application processes that use pre-validated criteria, such as energy consumption patterns and credit scores, to speed up approvals. These pre-set standards can significantly cut processing times, making it easier for households and businesses to access financing for solar installations without getting caught up in red tape.

• Smarter technical evaluations

The feasibility of solar energy projects depends on accurate technical evaluations. In the coming year, we’ll see the growing use of technologies like artificial intelligence (AI) and Internet of Things (IoT) tools to fine-tune this process. AI can analyze data on sunlight exposure, weather conditions, and shading to predict how well a solar installation will perform, while IoT devices provide real-time performance data. These technologies help ensure that financed projects meet both high efficiency and environmental standards, giving lenders and investors more confidence in their outcomes.

• Monitoring solar assets after financing

Financing isn’t just about getting the money; it’s also about ensuring the success of the project afterward. Post-disbursal asset monitoring is becoming a key focus for lenders, especially in solar energy. Using IoT-enabled sensors, financiers can track the performance of solar installations over time—measuring energy output, identifying maintenance needs, and ensuring the systems meet energy production targets. This ongoing oversight helps protect the value of investments and ensures projects stay on track.

• Fully digital financing platforms

Going digital is transforming green financing into a more accessible and user-friendly process. By 2025, more platforms will offer fully digital workflows for solar energy funding, streamlining everything from loan applications to approvals and documentation. These platforms simplify the customer journey with self-service tools and real-time updates, allowing borrowers to track progress, repayments, and project milestones. Greater transparency and convenience will open doors for more individuals and businesses to embrace solar energy.

• Innovative financing models

A fresh approach to financing solar projects involves using electricity bills to assess repayment ability. Unlike traditional credit evaluations, which exclude people without formal credit histories, this model offers a more inclusive way to determine eligibility. By analyzing a household’s past electricity usage, lenders can offer tailored loan amounts and repayment plans. This innovative approach is expected to make solar energy more accessible to underserved populations, driving wider adoption of rooftop solar solutions.

• Spotlight on rooftop solar

Rooftop solar is set to play a leading role in India’s solar energy push, especially as the country works towards its target of 500 GW of renewable energy by 2030. However, challenges such as high upfront costs and limited financing options have slowed adoption. Verified data from the Central Electricity Authority shows that green financing models—such as subsidized loans, performance-linked incentives, and partnerships between banks and solar providers—are helping to overcome these barriers. As these efforts gain traction, 2025 could be a breakthrough year for rooftop solar.

The road ahead

The regulatory frameworks and advanced technologies are attracting diverse investors, from institutional funds to retail lenders. Decentralized renewable energy systems such as community solar projects are also expected to drive demand for innovative and small-scale financing solutions.

In short, 2025 promises to be a turning point for green financing in the solar sector with government initiatives like the PM Surya Ghar Scheme. By tackling persistent challenges like slow approvals, inefficient evaluations, and lack of post-loan monitoring, a slew of emerging solar solutions is poised to unlock massive opportunities. The collaboration between finance, technology, and the energy sector will be crucial in scaling solar adoption and achieving India’s sustainability goals.

By Swapnil Wakade – Business Head, Residential Rooftop Solar, Ecofy