Sustainable Development & the Rise of MSMEs in Green Energy Sector

April 2, 2023
Updated on

India’s MSME sector is the backbone of the national economy with over 64 million businesses providing employment to over 11 million people and contributing to 1/3rd of the country’s GDP. With industrialisation, it is important to implement production and operational activities in order to develop and grow sustainably. Among 64 million MSMEs, about 44 million MSME units contribute 45% of India’s manufacturing output and accounts for 35% of India’s total exports.

The MSME sector consumes energy equivalent to about 50 million tons of oil annually. As a major consumer of energy, they need to take measures to produce efficiently and use clean energy. This can be done by adapting to eco-friendly technologies which helps in contribution to achieve a sustainable environment.

How MSMEs can Leverage Schemes & Financing to Adopt Green Energy

The Government of India is promoting MSME to adopt renewable energy across all sectors. There are various schemes and programmes to create awareness to the MSME entrepreneurs of India. Some of the methods can be implemented are listed below:

Solar Rooftops

By using solar energy MSMEs can increase their score on ZED as it reduces the carbon emissions and can be used to avail government grants and subsidies. By installing solar rooftops, it reduces the electricity bill and also cuts down overall costs. One of the major advantages is that it offers continuous access to electricity unlike the traditional source of using coal-generated power. By showcasing that the company is promoting a green environment it will help attract investors and customers, increasing the branding of the company.

Green Technology

The Government of India has taken initiative to advocate various schemes and policies for the MSMEs to adopt new and green technologies. Schemes such as Technology Upgradation and Quality Certification ZED Certification scheme, A Scheme for Promoting Innovation, Rural Industries and Entrepreneurship (ASPIRE), Credit Linked Capital Subsidy for Technology Upgradation (CLCSS) and Design Clinic for Design Expertise to MSMEs among various other schemes. The benefits for these schemes mainly involve adapting to new technology and upgrading the current manufacturing process to have an end result with improved efficiency, better quality of products, reduce rejection and reduce production in cycle-time and promote the use of green energy.

Renewable Energy from Battery Storage

These devices enable energy from renewable energy which can be stored in them when necessary. This method helps in accessing sufficient energy as per necessity. This will also help in being self-sufficient without being dependent on external sources for electricity. These systems also reduce greenhouse emissions and minimise pollution.

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Bureau of Energy Efficiency (BBE)

The BBE is an agency of the Government of India under the Ministry of Power. The objective of this agency is to develop programs which increase the conservation and efficiency use of energy. Some of the schemes under this agency which are provided by the government include the BEE-SME scheme that is part of the National Programs on energy efficiency and technology upgradation of SMEs. GEF-UNIDO BEE scheme is promoting energy and renewable energy in selected MSME clusters in India and the scheme is financing energy efficiency product implementations in several MSMEs around the country. All these schemes mainly create awareness and encourage MSMEs to adapt and achieve sustainable development by adopting green energy.


Is also known as Indian Renewable Energy Development Agency which aims to address the effects of climate change and pollution reduction by financing and supporting renewable energy projects. They recently announced to fund more loans for MSME to increase participation in the green energy sector. With the target to achieve 50% share of energy from fossil fuels and also 500 GW renewable energy capacity by 2030, it is important for MSMEs to show considerable participation.

Public awareness of renewable energy has been growing rapidly hence, it is important for MSME entrepreneurs to integrate sustainability principles into their business strategy. This not only has an impact in creating a green environment but also is an added advantage over the competitors that the enterprise is promoting a sustainable environment. Thus, helping MSMEs grow their business exponentially and increase their sales.

For any MSME a major barrier is the process of availing a loan with a reasonable interest rate and collateral. Kinara Capital is an RBI registered Systemically Important NBFC in India, offering a wide range of MSME loans with flexible interest rates without any property collateral. Check your loan eligibility within a minute on the myKinara app by providing minimum documentation. Offering services at your doorstep in vernacular go from decision to disbursement within 24 hours.

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