SolarSquare raises $40 million in India’s largest solar venture round

SolarSquare has raised $40 million in what is the largest venture round in India’s solar sector.

The Mumbai-based startup bootstrapped and was profitable selling to corporate customers for five years before switching to residential solar in 2021. Now it has scaled to powering over 20,000 homes and 200 housing societies across India, and is India’s largest operator of distributed solar assets.

“This is the opportunity of a lifetime,” Shreya Mishra, co-founder and chief executive of SolarSquare, told TechCrunch in an interview. “It’s not just an industry that’s growing superfast — it’s where profit and purpose align.”

Unlike others in the space, SolarSquare guarantees returns on solar investments and compensates customers if systems don’t deliver, making its full-stack service — selling the systems, installing them to the consumer’s rooftop, and offering after-sales services — much more compelling. The overall cost of buying and having the system installed averages about $1,500.

“If we promise you’ll get 5,000 units of electricity from solar but you end up getting only 4,000 units, we will pay you back for the balance 1,000 units,” Mishra said. “This makes solar like a fixed deposit for customers because return on investment is guaranteed.”

Thanks to recent incentives provided by the government, solar interest has surged in recent years. The push is necessary as only about 1% of Indian homes have currently adopted solar, compared to countries like Australia, where 35% homes have solar, and Brazil, where more than 5% homes have solar.

“Two years back, people only had textbook knowledge — they learned in school that solar is something good,” Mishra said. “They didn’t know how much it cost, they didn’t know about government subsidies, they didn’t know that the payback period is literally 4 to 5 years.”

India has set an ambitious target of achieving 500 gigawatts of renewable energy capacity by 2030, with solar power expected to contribute about 280 gigawatts to this goal. To accelerate solar adoption, Modi’s government has introduced several incentives, including a production-linked incentive scheme worth $3 billion to boost domestic solar manufacturing, 40% basic customs duty on solar modules to protect local industry, and viability gap funding for utilities to build solar infrastructure in remote areas.

The government also offers accelerated depreciation benefits, income tax holidays for solar projects, and capital subsidies ranging from 20% to 70% for rooftop solar installations, while also mandating renewable purchase obligations for state utilities to ensure steady demand for solar power. SolarSquare helps its customers identify and avail the benefits of the government subsidies, Mishra said.

“India is the first country in the world to make net-metering, this exchange of electricity, a consumer right that makes economics more viable as you’re able to freely trade electricity with the grid,” she said.

The demand for solar is slowly extending well beyond major cities. “Unlike quick-commerce or businesses that focus on top 10-15 cities, solar is actually a national, Bharat sort of business,” Mishra said. “People in Tier 1, Tier 2, Tier 3 cities as well as rural India — everywhere there are homes, people will want to go solar.”

SolarSquare will deploy the fresh funds to expand from 20 to 50 cities, but is taking a careful approach. “As entrepreneurs, we’re not in a business of ‘move fast and break things,’” she said. “When you’re doing a serious product like solar, playing with people’s life and safety, there has to be that amount of seriousness.”

For smaller cities, the startup plans to work with local partners while maintaining quality control.

The timing works in SolarSquare’s favor. India has made net-metering a consumer right and cut down permit processing from months to days.

Lightspeed led the investment, a Series B financing round, with Lightrock joining, alongside existing investors Elevation Capital, Chris Sacca’s Lowercarbon, and Nithin Kamath’s Rainmatter. The startup, which had raised $19.5 million previously, will also invest in technology to build better systems for monitoring and managing residential solar installations remotely.