Solar Rooftop Loan in India: Rates, Eligibility & Process
Solar Rooftop Loan in India: Rates, Eligibility and Application Process
A solar rooftop loan helps you finance the installation of solar panels on your home or business premises. Instead of paying a large upfront cost for a rooftop solar system, you take a loan and repay it in EMIs, while saving on electricity bills every month. The savings often cover a significant portion of the EMI, making solar loans one of the few loans that partially pay for themselves.
India’s PM Surya Ghar Muft Bijli Yojana has brought rooftop solar to the mainstream, offering subsidies of up to Rs 78,000 for eligible households. Banks and NBFCs now offer dedicated solar loan products to fund the remaining cost.
Overview
Solar rooftop loans fall into two categories: residential (for homes) and commercial or industrial (for businesses). Loans for homes under the PM Surya Ghar scheme are linked to approved vendor installations and tied to the subsidy disbursement process. Commercial solar loans are typically larger and assessed like project finance or MSME loans.
Lenders include SBI (Green Car Loan variant), Axis Bank, HDFC Bank, IREDA (Indian Renewable Energy Development Agency), and several NBFCs and FinTechs like SolarSquare or Oorjan that partner with banks for consumer solar financing.
Interest Rates
| Lender Type | Loan Amount | Interest Rate (p.a.) |
|---|---|---|
| PSU Banks (SBI, Bank of Baroda) | Rs 1 lakh to Rs 10 lakh | 8% to 10.5% |
| Private Banks | Rs 1 lakh to Rs 25 lakh | 10% to 13% |
| IREDA / NABARD | Rs 5 lakh to Rs 5 crore | 9% to 11% |
| FinTech / NBFC | Rs 50,000 to Rs 5 lakh | 12% to 18% |
Eligibility
- Resident Indian with a valid electricity connection
- Property ownership or NOC from the owner (for tenants)
- CIBIL score of 650 or above (for bank loans)
- Stable income: salaried (minimum Rs 15,000/month) or self-employed with ITR
- Property must be in a DISCOM (electricity distribution company) that allows net metering
Documents Required
- Aadhaar and PAN card
- Last 3 months’ electricity bill
- Income proof: salary slips or last 2 years’ ITR
- Bank statement (last 6 months)
- Property documents or ownership proof
- Quotation from an empaneled solar vendor
- Net metering application acknowledgment
Application Process
- Choose a vendor: Select a MNRE or DISCOM-empaneled solar installer. Get a written quotation for the system size and cost.
- Apply for PM Surya Ghar subsidy: Register on the national portal (pmsuryagarh.gov.in) and get the subsidy approval in principle before applying for a loan.
- Approach a bank or NBFC: Submit the loan application with the vendor quotation and subsidy sanction letter.
- KYC and credit assessment: Bank verifies identity, income, and credit score.
- Loan disbursal: Funds are released directly to the vendor or to your account after installation.
- Subsidy credit: Post-installation, the DISCOM inspects the system and the subsidy is credited directly to your bank account.
Frequently Asked Questions
How much subsidy can I get under PM Surya Ghar Yojana?
For a 1 kW system: Rs 30,000 subsidy. For 2 kW: Rs 60,000. For 3 kW and above: Rs 78,000. The subsidy is credited directly to the beneficiary’s bank account after installation verification by the DISCOM.
Can I get a solar loan if I live in a rented house?
Most banks require property ownership or a long-term lease (10 years or more) for solar loans. Some FinTechs may offer more flexibility, but check lender-specific policies.
Are solar loan EMIs tax deductible?
If the solar system is used for a business, the interest and depreciation can be claimed as business expenses. For residential systems, there is no specific income tax deduction available as of FY2025-26, though the electricity savings reduce your overall household outgo.
What is the payback period for a rooftop solar loan?
A typical residential system (3 kW) costs Rs 1.5 to 2 lakh after subsidy. With monthly electricity savings of Rs 1,500 to Rs 2,500, the system pays back in 5 to 7 years. The panels last 25 years, so the net savings are significant.
