Solar Energy Adoption in Nepal’s Industrial Sector

Nepal’s industrial sector suffers from high energy consumption, high operating costs and unreliable grid supply, and industrial solar photovoltaics are developing as an alternative to diesel backup power generation. This study investigates the status, drivers and challenges for industrial solar uptake in Nepal by using publicly available sources, academic research publications, conference proceedings and international case studies. The solar capacity installed in Nepal has grown from 50 MW in 2019 to over 117 MW in 2024, with a further 27 grid-connected projects of 154.74 MW under development. Our illustrative techno-economic study found a system levelized cost of energy of approximately NPR 9.71/kWh for industrial rooftop solar, compared to approximately NPR 30/kWh for comparable capacity diesel generation, with typical installation costs ranging from NPR 85,000.00–100,000.00 per kWp. Industrial solar can replace diesel generation and reduce annual energy expenditures by 40–60%. Sensitivity analysis indicates that a 20% reduction in panel costs or a 10% increase in power tariffs can reduce payback periods by 1–1.5 years. Detailed Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis identifies high upfront capital expenditures, legacy grid infrastructure, regulatory inconsistencies and institutional fragmentation as the major impediments. There are opportunities for international climate finance, smart-grid development and job creation. As Nepal-specific diesel-related CO₂ reductions cannot yet be quantified reliably, an illustrative sensitivity analysis using internationally documented emission factors is therefore presented. These results show that targeted policy interventions, financial innovation and institutional coordination can be used to accelerate industrial solar adoption in Nepal.