Solar Financing in India is catching up as more and more homeowners want to power their homes with clean energy. With the increasing importance of sustainable living and soaring costs of conventional electricity, there is no better way to achieve this than by using solar energy. Nonetheless, the upfront cost of installing a solar power system can be a deterrent to many homeowners. This is where solar financing comes in the picture. Solar financing ensures that homeowners have access to cheap finance and that they save more money by going solar than what they spend in loan repayment. With numerous government subsidies and easy loan schemes, it’s time for you to step towards a green and super economical future.
What is a Solar Loan?
Solar loan is a financial product wherein you can borrow money from banks, financial institutions like U-Gro Capital, NBFCs, or lenders to install rooftop solar systems. Different institutions have different EMI(options), solar loan interest rates, period of loan repayment and (sometimes) collateral requirements for giving solar loans. The structure of solar loans that vary among lenders i.e. U-Gro Capital. Some offer solar loans as part of home loans or home improvement loans, while others provide them as loans for solar installation. This way, you can choose the best that suits your financing needs.
Why Homeowners Should Consider Solar Financing in India
Switching to solar energy offers several long-term advantages, including substantial savings on electricity bills and contributing to a cleaner environment. However, the high upfront cost of solar panels can deter homeowners. This is why solar financing is essential. Here’s why you should consider it:
- Cost-Effective: Financing allows you to spread the installation cost over time.
- Lower Energy Bills: Solar panels lead to significant long-term savings on electricity.
- Increased Property Value: Homes with solar panels generally have higher resale values.
- Government Incentives: The Indian government offers various subsidies and incentives, making solar panel financing even more appealing.
Key Factors That Can Affect Solar Financing in India
Several elements influence the final loan terms, and it’s essential for homeowners to evaluate these factors before choosing the right solar rooftop loan:
- Loan Amount: Choose a lender that offers the highest solar loan amount to help you cover the cost of your rooftop solar installation.
- Solar Loan Interest Rates: Go for a competitive solar loan interest rate loan so that you pay lower monthly payments and get quicker returns through energy savings.
- EMI Structure: First, consider the equated monthly installment (EMI) that includes the principal, interest and in some cases a processing fee. Lower interest rates imply faster payback through savings.
- Repayment Tenure: You can select a repayment tenure per your monthly income. It ranges from 1 to 20 years depending on the lender.
- Foreclosure Policies: Watch out for the prepayment terms. Specific lenders levy fees if you repay the loan in part or in whole.
Solar Financing Options for Homeowners in India
There are several solar panel loan options in India available for homeowners. Let’s explore some of the critical choices:
- Rooftop Solar Loans
A rooftop solar loan is designed to cover the installation cost of solar panels. Ruloans, in partnership with over 275 banks, NBFCs, and residential solar financing companies, offers attractive solar panel loan options with flexible repayment terms and competitive interest rates.
- Eligibility: Homeowners with a stable income and a good credit rating.
- Loan Amount: Covers 80-100% of the installation cost.
- Repayment Tenure: Ranges from 3 to 7 years.
- Benefits: Allows homeowners to save on electricity bills while repaying the loan.
- Solar Leasing
In a solar leasing agreement, homeowners lease solar panels from a financing company rather than buying them outright; the company maintains ownership of the panels while the homeowner has lower electricity bills.
- Minimal Upfront Cost: Typically, no down payment is required.
- Fixed Monthly Payments: Homeowners pay a leasing fee instead of buying the panels.
- Maintenance Included: The leasing company handles all maintenance.
- Power Purchase Agreements (PPAs)
A Power Purchase Agreement (PPA) enables the installation of solar panels with no upfront cost- install and pay only for the electricity generated at a fixed rate.
- No Upfront Cost: Installation costs are covered by the solar company.
- Pay for Energy: Homeowners pay for the power generated, often at a lower rate than their regular utility bills.
Government Solar Subsidies and Incentives
The Indian government, through the Ministry of New and Renewable Energy (MNRE), offers subsidies for residential rooftop solar systems. In certain states, these subsidies can cover 30-40% of the total installation cost, making solar energy more affordable for homeowners. Additionally, some states offer their own incentives, making solar panel installations an even more viable option.
Final Words
Solar financing in India is now more accessible than ever, with a range of options available through Ruloans. Whether you’re a homeowner looking to install solar panels or someone interested in becoming a DSA agent to facilitate solar loans, there’s something for everyone. With Ruloans’ vast network of lenders and seamless processes, transitioning to solar power is both easy and affordable.
Partner with Ruloans today and take advantage of our solar panel loan options and other financial products to contribute to a greener, more sustainable India while enjoying financial rewards. For more information, download the Ruconnect App—India’s first B2B Loan Distribution Channel Partner App—and explore the endless possibilities of solar financing with Ruloans!
