In India, various loan schemes are available to support the installation and adoption of solar energy systems. These schemes are provided by government initiatives, public and private sector banks, and non-banking financial companies (NBFCs). Here are some notable solar system loan schemes in India:
Government Initiatives
1.Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) Scheme:
Objective:
To promote the use of solar energy among farmers.
Components:
- Installation of solar pumps.
- Installation of grid-connected solar power plants.
- Solarization of existing grid-connected agriculture pumps.
Loan and Subsidy:
Provides a mix of central and state government subsidies, along with bank loans to cover the remaining cost.
2.Sustainable Rooftop Implementation for Solar Transfiguration of India (SRISTI):
Objective:
To encourage rooftop solar installations.
Loan and Subsidy:
Offers capital subsidies and loans to residential and institutional sectors for the installation of rooftop solar systems.
Bank Loans
1.State Bank of India (SBI) – Green Energy Loans:
Features
Offers loans for the installation of solar power systems at attractive interest rates.
Eligibility
Available to individuals, businesses, and institutions
Loan Amount
Up to 75-80% of the project cost.
2.Punjab National Bank (PNB) – PNB Solar Loan:
Features
Provides loans for installing solar power systems for residential and commercial purposes.
Eligibility
Individuals, partnership firms, companies, and other entities.
Loan Amount
Typically up to 80% of the project cost.
3.Bank of Baroda – Baroda Solar Installment Scheme:
Features
Provides financing for solar rooftop systems.
Eligibility
Homeowners, commercial entities, and industrial units.
Loan Amount
Covers up to 75-80% of the project cost.
Non-Banking Financial Companies (NBFCs)
1.Tata Cleantech Capital Limited (TCCL):
Features
Specializes in providing finance for renewable energy projects, including solar energy.
Loan Products
Offers project finance, working capital loans, and term loans for solar installations.
2.Loom Solar:
Features
Offers easy EMI (Equated Monthly Installments) options for purchasing solar systems.
Loan Products
Partners with various financial institutions to provide loans to individuals and businesses for solar installations.
Microfinance Institutions and NGOs
Selco India:
Features
Provides microloans for solar energy solutions to underserved communities.
Loan Products
Offers tailored financial products to low-income households and small businesses for solar installations.
Key Points to Consider
- Subsidies: Many schemes offer subsidies from the central and state governments, reducing the overall cost of the solar installation.
- Interest Rates: Interest rates vary based on the lender, loan amount, and tenure. They are often lower for solar loans to promote green energy adoption.
- Repayment Terms: Flexible repayment options are available, including long-term repayment plans.
- Eligibility: Eligibility criteria can vary; it’s essential to check specific requirements for each scheme or lender.
These solar system loan schemes make it easier for individuals, businesses, and institutions in India to adopt solar energy, promoting sustainability and reducing dependence on conventional energy sources.
Solar Loan Interest Rates and Charges
When you compare solar business loans or solar project financing in India, don’t look at the interest rate alone. Lenders typically price a solar plant loan / rooftop solar loan / solar farm loan based on your business cash flow, credit profile, project size, collateral, and the project’s payback period.
Indicative Interest Rates & Common Charges (Example)
| Item | Typical Range* |
| Interest Rate (p.a.) | 7% to 10% |
| Processing Fee | 0.50% to 2.5% |
| Late Payment / Default Charge | Up to 3% per month on overdue amount |
*Rates and charges change frequently and vary by lender, project type (rooftop / ground-mounted / captive), security offered, and borrower profile. Always verify the latest rate sheet and full fee schedule on the lender’s official website before applying.
Other Charges You Should Check (Before You Sign)
- Documentation / Legal / Technical Due Diligence fees (project appraisal, site inspection, valuation)
- Stamp duty & agreement charges (as per state rules)
- Prepayment / Foreclosure charges (if you want to close the solar loan early)
- Bounce charges (if an EMI fails)
- GST applicability on fees (processing, documentation, etc.)
Eligibility Criteria for a Solar Business Loan
Most lenders evaluate both your business profile and the solar project viability. Common eligibility requirements include:
- Eligible borrower type: Proprietorship, partnership, LLP, and company structures are commonly accepted. HUF eligibility depends on lender policy, so confirm during enquiry.
- Credit score: Many lenders prefer a CIC score of 700+ for individual/proprietor applicants (higher is better for pricing).
- Statutory approvals / NOCs: You should be able to produce required permissions from relevant authorities (as applicable to your project and location).
- Grid-connected requirement: If you’re taking a loan for a grid-tied rooftop solar system, lenders often expect net metering / grid approval documentation. (Off-grid/hybrid projects may have different requirements.)
- Repayment capacity: Lenders assess whether your monthly cash flows (and expected savings from solar) can comfortably cover the EMI.
- Onsite and offsite projects: Financing may be available for both onsite and offsite solar projects, subject to documentation (land/lease, evacuation approvals, project contracts).
- Site rights: The solar system is usually expected to be installed on a property you own or have a valid long-term lease for.
- Business risk profile: Businesses involved in high-risk or uncertain financial activities may be restricted as per lender policy.
- Existing loans status: If you already have loans, your repayment track record should be clean. Accounts with overdue issues or classification concerns (e.g., SMA/irregular) may face rejection or higher pricing.
How to Apply for a Solar Business Loan
You can apply online or offline for a solar installation loan or solar plant financing. A typical process looks like this:
- Share basic details
Business name, turnover, project location, solar capacity (kW/MW), and project type (rooftop/ground-mounted/offsite). - Submit the application
Fill out the form with personal + business information and choose the required loan product (term loan/working capital). - Upload documents
Commonly requested documents include:- ID & address proof
- Business registration proof
- Bank statements
- ITR / financials (2–3 years)
- Project quotation/DPR, vendor details, and expected generation
- Property ownership/lease documents
- Net metering/grid-approval documents (for grid-connected rooftop)
- Site & project assessment
The lender may conduct technical appraisal, verify the site, and review project viability (generation estimate, payback, contracts). - Loan approval & sanction
You receive the sanction terms: interest rate/APR, EMI, tenure, margin money, security, and total charges. - Agreement & disbursal
After signing, disbursal is made as per the agreed structure—often directly to the vendor/EPC or to your account in stages. - Installation & commissioning
Complete installation, testing, and grid synchronization (if applicable), then start repayment as per the EMI schedule.
FAQs (Solar Business Loan / Solar Project Financing)
1) Can I get a solar loan without income proof?
Usually no. Most lenders require income proof like bank statements, ITR, and business financials to assess repayment capacity.
2) What is the minimum loan amount for a solar business loan?
It depends on the lender and project type. Small rooftop loans can start from low ticket sizes, while commercial/project loans start higher based on system size and invoices.
3) What is the maximum loan amount I can get for a solar project?
The maximum loan amount depends on your turnover, credit profile, collateral/security, and project size (kW/MW). Larger projects may be funded through structured project finance.
4) Is GST included in solar loan financing?
Some lenders finance the total invoice value (including GST) and some finance only the base system cost. Always confirm what portion is eligible.
5) Can I take a solar loan if I already have a business loan running?
Yes, if your existing loan repayments are regular and your cash flows support an additional EMI. High overall debt may reduce eligibility.
6) What is the EMI for a solar loan?
EMI depends on loan amount, interest rate, and tenure. Lenders often check whether your solar savings plus business cash flow can cover the EMI comfortably.
7) Can I get a solar loan for battery storage (hybrid solar)?
Some lenders fund hybrid systems including batteries, but terms can differ because batteries have different life cycles and replacement costs.
8) Can I get financing for solar O&M (maintenance) cost?
Usually loans cover CAPEX equipment and installation. Some project finance structures may include O&M reserves, but it varies.
9) Is a quotation enough to apply for a solar loan?
A quotation helps to start, but most lenders also require vendor credentials, technical specs, projected generation, and site/property documents.
10) Do lenders verify the solar vendor/EPC before approving the loan?
Yes. Many lenders prefer approved/experienced vendors and may check project feasibility, warranties, and installation standards.