The Indian economy is on a mission to go from ‘small’ to ‘super-sized,’ and its MSMEs are leading the charge. But their ambition doesn’t quite match the reality of their day-to-day operations.
Power cuts and volatile electricity prices are not just an inconvenience; they are a direct threat to their survival. The good news is that a quiet revolution is already in motion.
From a small textile unit in Haryana saving ₹40 lakh a year, to a dairy cooperative generating crores in value from discounted electricity, MSMEs across India are discovering that solar energy is no longer a luxury, but a strategic business edge for every Indian small business.
The Single Smartest Investment for India’s MSMEs
India’s 63.3 million MSMEs are the backbone of the economy. They are a colossal economic engine, contributing 28.9% of the GDP, supporting 250 million jobs, and accounting for 45.7% of exports. Their ambition, however, is constantly challenged by the pain points of a legacy energy system.
For MSMEs, energy is not a side issue; it’s a primary business cost and a major source of uncertainty. Power cuts lead to lost production, damaged equipment, and a reliance on expensive diesel generators. Volatile grid tariffs make budgeting impossible. Solar energy directly tackles these issues, offering a clear path to considerable cost savings and, when paired with battery storage, operational stability and a reliable power supply.
[Despite being seen as “small,” MSMEs collectively form one of India’s largest energy-consuming and GHG-intensive sectors. MSMEs already consume 25% of the industrial sector’s energy, with a highly carbon-intensive mix. In 2015-16 alone, they emitted around 110 million tonnes of CO₂e. Their energy demand is naturally set to surge and, if unchecked, could significantly increase their annual emissions. On the other hand, they also hold a massive, untapped potential to deploy 16–18 GW of rooftop solar, a capacity that is critical for India’s net-zero ambitions.]
From Pain Points to Profits: Case Studies in Solar Adoption
Solar energy is a versatile tool that can be tailored to the specific needs of diverse MSME industries. Here’s how three different sectors are leveraging solar to solve their energy problems and transform their businesses.
The Engine of Value: Food Processing MSMEs
In the food sector, every degree of temperature and every moment of uptime is critical. Power outages can lead to food spoilage, turning valuable inventory into a total loss. Here are two examples of how solar power has become a growth driver:
Banas Dairy, a large dairy cooperative, faced the immense energy demands of its refrigeration and processing units. They have invested ₹9.95 crore in rooftop solar plants, for a total capacity of 2.4 MW across their Palanpur, Faridabad, Lucknow, and Kanpur plants. In just over five years, the plants have generated ₹15.7 crore worth of electricity, creating more value than the initial cost and ensuring the integrity of its products. Another startup, DDSolar Kft., has devised solar-powered refrigerators and chillers that use just 0.329 kWh/day compared to 1.3 kWh for conventional models. This innovation is helping farmers store milk, fish, and perishables longer, cutting spoilage and boosting profits.
Textile Sector: Powering Production, Cutting Costs
The textile industry is one of India’s most energy-intensive sectors, with constant demand for electricity. For a textile factory, every hour of downtime due to power cuts is a direct loss.
Solar power ensures their machines keep running. For example, Sharda Cotton Industries in Haryana installed a 400 kW rooftop solar system that is projected to save the company approximately ₹40 lakh every year on electricity bills alone. On a larger scale, ST Cottex in Punjab commissioned a 10.5 MWp solar plant in 2023, and an additional 8 MWp project was added in 2024, making it an 18 MWp total solar rooftop systems. The entire project was done under the RESCO model with no upfront cost to the company.
The Key to Competitiveness: Furniture & Plywood MSMEs
For industries like furniture and plywood, the market is no longer just about price. Global buyers are increasingly demanding sustainability and a green footprint. Solar energy provides a dual benefit: reducing costs while also unlocking new export markets.
Sharma Industries, an award-winning exporter in Jodhpur, Rajasthan, installed rooftop solar across all four of its units (totalling over 146 kW), with one system running a 66 kW rooftop system under net metering. This move cut energy expenses and enhanced the company’s sustainability credentials, making it more attractive to international clients.
In another interesting example, several MSMEs in the Yamunanagar Plywood Cluster were supported by WRI India in adopting solar through collective action. A pilot project saw a joint installation of 206 kW of rooftop solar across two units. This approach proves that collaboration can make the transition more affordable and accessible for an entire industry, paving the way for wider adoption.
Beyond this pilot, WRI’s analysis revealed a rooftop solar potential of 34 MWp across Haryana’s four energy-intensive clusters, with Yamunanagar alone holding 2.8 MWp potential.
Conclusion: Beyond the Success Stories – Addressing the Real Hurdles
The success stories of companies like ST Cottex and Sharda, while powerful, are not yet the norm. A significant majority of India’s 63.3 million MSMEs face persistent barriers to adopting solar.
First, the financial barrier. The single biggest hurdle is the high upfront capital cost. Despite the long-term ROI, MSMEs often lack the cash reserves or the credit history to secure loans. According to a study by Climate Policy Initiative, the biggest barrier for MSME clients is the perceived lack of creditworthiness by lenders.
[Horizon’s support: Flexible Financing: We directly address the capital constraint by offering a choice between the EPC model and the RESCO model. RESCO is a game-changer for MSMEs, as it eliminates the need for any upfront investment.]
Second, the expertise barrier. Overburdened with daily operations, MSME owners have limited time and technical knowledge to research, evaluate, and manage a solar project. Add to this a complex regulatory landscape filled with subsidies, net-metering policies, and installation approvals, and it’s no wonder that MSMEs rarely take the idea of solar all the way to reality.
[Horizon’s support: End-to-End and Simplified Service: We remove the burden of technical and regulatory knowledge by handling the entire project lifecycle, from designing to installation and securing all necessary government approvals. We even take maintenance, repair, and cleaning off your hands! As government empanelled vendors, MSMEs can rest assured that MNRE guidelines and guarantees will be followed to the T.]
Finally, the ROI barrier. Most business owners know that they will save on the electricity bill, but often wonder if it’s worth the initial investment. They also lack clarity on how to translate their renewable energy gains beyond monetary savings and how to effectively project their green credentials.
[Horizon support: Clear Value Proposition: We move beyond the abstract concept of “sustainability” and ‘savings’ and provide quantifiable benefits based on data on projected savings and ROI, along with energy audits that can fit neatly into ESG or sustainability reports.]
At Horizon, we believe in the incredible power of India’s MSMEs. Let us help you unlock yours. Contact Horizon for a free solar assessment: +91 – 9811121157 | om@horizonrenewablepower.com