Solar Financing in India Simplified: Best Interest Rates and Your Trusted Partners
Investing in solar energy is a smart, sustainable choice, but financing the initial cost remains a challenge for many. Fortunately, India’s growing clean energy market offers multiple solar financing options with competitive interest rates and reliable financial partners to support residential, commercial, and industrial solar projects.
Why Opt for Solar Financing?
Solar systems often involve substantial upfront costs. Loans and financing allow you to:
Spread the cost over time
Reduce reliance on upfront capital
Benefit from government subsidies and incentives
Increase return on investment through energy savings
Best Interest Rates on Solar Loans in India (2025)
Interest rates for solar financing vary based on loan type, lender, borrower profile, and project size, but here are typical ranges to expect:
Home solar loans (residential): 8% – 12% per annum
Commercial & industrial solar loans: 7.5% – 11% per annum
Government-subsidized loans: Rates can be as low as 6% – 9%, depending on schemes
Types of Solar Financing Options
Bank Loans and Personal Loans
Traditional banks and NBFCs offer dedicated solar loans or personal loans that can be used to purchase solar panels. These loans could be secured or unsecured, with varying interest rates.
Government Schemes and Subsidies
Programs like the Ministry of New and Renewable Energy’s (MNRE) subsidy schemes, and priority-sector lending by banks, help reduce financing costs for solar projects.
Solar Equipment Financing
Some solar manufacturers tie up with financial institutions to offer easy EMI plans, solar leases, or Power Purchase Agreements (PPAs).
Green Loans
Specialized green or environment-friendly loans with preferential rates for renewable energy installations.
Trusted Solar Financing Partners in India
State Bank of India (SBI): Offers solar loans for home and commercial projects with competitive interest rates and easy application.
Bajaj Finserv: Provides personal loans and solar-specific financing with quick approval and flexible terms.
Tata Cleantech Finance: Specialized in renewable energy project financing with customized solutions.
HDB Financial Services: Known for green loans targeting small and medium solar businesses.
LIC Housing Finance: Offers housing loans inclusive of solar installations under home improvement schemes.
Government-linked financial institutions: NHB, SIDBI for MSME solar projects and large-scale financing.
Tips to Secure the Best Solar Financing
Check your credit score: Better scores get better rates and faster approvals.
Compare lenders: Evaluate interest rates, tenure, processing fees, and prepayment options.
Leverage subsidies: Apply for central and state government subsidies to reduce loan principal.
Choose the right loan tenure: Balance affordable EMI with total interest cost.
Opt for digital application: Many lenders provide 100% online processes for convenience.
FAQ – FREQUENTLY ASKED QUESTIONS
What is the typical tenure for solar loans in India?
Loan tenures usually range from 1 to 10 years, depending on the loan amount and lender policies.
Are solar loans secured or unsecured?
Both options are available; secured loans require collateral and usually have lower interest rates, while unsecured loans are faster but costlier.
Can I avail government subsidies along with solar loans?
Yes, many government subsidy schemes run parallel to financing options, reducing the net cost of solar installations.
Is solar loan interest tax-deductible in India?
Currently, interest on solar loans is generally not tax-deductible, but check for any regional tax benefits or incentives.
How do I choose the best lender for solar financing?
Compare interest rates, loan terms, customer service, and read reviews. Consider lenders specialized in renewable energy for better expertise.
Can MSMEs avail solar loans easily?
Yes, MSMEs are eligible for various government schemes and priority-sector lending with attractive solar loan products.
Is there a minimum loan amount for solar financing?
Minimum loan amounts vary but start as low as ₹50,000 for residential systems; commercial loans typically start higher.
Published on: July 24, 2025
Published by: PAVAN
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