Solar Panel Loan in India 2026: Interest Rates, Schemes, EMI and How to Apply

Most people who want rooftop solar stop at the quotation. A 3 kW system costs around ₹1,80,000. That is a lot to hand over at once, even when the savings are real.

A solar panel loan removes that wall. Under PM Surya Ghar: Muft Bijli Yojana, a home borrower can get up to ₹2 lakh with no collateral, at a solar loan interest rate of roughly 5.75% a year. That is cheaper than almost any other retail loan in India, and in many homes the EMI is lower than the electricity bill the system replaces.

This guide covers what the loan costs, which banks lend, how the subsidy and loan fit together, the documents you need, and how to apply through pmsuryaghar.gov.in and jansamarth.in. It also covers commercial and industrial financing, where the lenders and numbers are entirely different.

Note: All bank figures here are indicative as of September 2026. Rates move with the repo rate and with internal bank policy. Confirm the current number before you sign anything.

Quick Answer

Under the PM Surya Ghar scheme, residential borrowers can get a collateral-free solar panel loan of up to ₹2 lakh at about repo rate + 0.50% = 5.75% a year (RBI repo has been 5.25% since June 2026 and was held there again in August 2026), repayable over up to 10 years. Above ₹2 lakh, rates rise to roughly 7.90% and banks lend up to ₹6 lakh. Apply on pmsuryaghar.gov.in, then continue to jansamarth.in for the loan. Rates change: check with your bank.

Why financing a rooftop system usually makes sense

Rooftop solar is one of the few things you can borrow for where the asset pays the instalment. The panels replace units you would otherwise buy from the DISCOM. If those units are worth more than the EMI, the loan is cash-flow positive from month one.

In India, 1 kW generates roughly 4 to 4.5 units a day, about 1,500 units a year. Gujarat and Rajasthan sit at the top of that band; coastal and eastern states lower. Upper-slab residential tariffs run around ₹7 to ₹9 per unit in most cities, higher in parts of Maharashtra.

A worked example. A family in Ahmedabad uses about 400 units a month at roughly ₹8 per unit in the slabs that matter, so around ₹3,200. They install 3 kW at ₹60,000 per kW, or ₹1,80,000 all in, and borrow the full amount for 10 years at 5.75%.

The EMI is ₹1,976. The system generates about 375 units a month, worth roughly ₹3,000. Even before the subsidy arrives the household is ahead by about ₹1,000 a month. Once the ₹78,000 subsidy is credited and the principal drops, the EMI falls to about ₹1,120 and the monthly gain approaches ₹1,900.

EMI versus the electricity bill it replaces

Two caveats. This works only if you consume most of what you generate, or your state gives full net metering credit for exported units. Some states credit export below the retail tariff, which weakens the maths for oversized systems. Also, the loan ends in 10 years but panels carry 25 to 30 year performance warranties, so years 11 onward are pure savings.

The PM Surya Ghar collateral-free loan: exact terms

This is the solar panel loan scheme that matters for homes. It was built so a household with no property to pledge and no formal income proof can still finance a small system. The core terms, as they stand in September 2026:

• Amount: up to ₹2 lakh, for systems up to 3 kW.
• Rate: repo + 0.50%. With the repo at 5.25%, that is 5.75% a year, floating.
• Collateral: none. The system is hypothecated to the bank, but no separate property or guarantor is required.
• Tenure: up to 120 months, usually including about a 6-month moratorium while the system is installed and commissioned.
• Margin: typically nil up to ₹2 lakh; 10% or 20% of project cost above that.
• Processing fee: nil at most public sector banks for this scheme.
• Prepayment: no penalty at the major lenders.

Above ₹2 lakh the concession stops. Banks lend up to ₹6 lakh, but at ordinary retail rates, with income proof, a credit score and a margin contribution required.

One point trips people up: 5.75% is a floating rate tied to the repo. If the RBI raises the repo, either your EMI or your tenure changes. Ask which one the bank adjusts.

Bank-by-bank comparison of solar loan rates

The table below is indicative as of September 2026, drawn from bank product pages and scheme documents. Treat it as a shortlist, not a quotation. Every number can change without notice, and branch-level practice varies.

A note on the HDFC solar loan interest rate: HDFC Bank does not run a repo-linked PM Surya Ghar retail product the way SBI or PNB do. Solar is usually funded as a standard personal loan, faster to disburse but far more expensive over 10 years. The BOB solar loan interest rate and the PNB solar loan interest rate sit in the same concessional band as the widely quoted SBI solar loan interest rate for the first ₹2 lakh, because all three price off the same repo-linked formula.

If you qualify for the scheme, a public sector bank will almost always beat an NBFC or personal loan on total interest. The trade-off is paperwork and time.

How the subsidy and the loan interact

This is the part that causes the most confusion, so here is the sequence in plain order.

1. You register on the national portal and get DISCOM feasibility approval.
2. You pick a registered vendor and get a quotation for the full system cost.
3. You apply for the loan. The bank sanctions against the full project cost, not the post-subsidy cost.
4. The system is installed and commissioned.
5. The DISCOM installs and certifies the net meter (the meter that counts units you send back to the grid) and issues a commissioning certificate.
6. You upload the certificate and bank account details on the portal.
7. The subsidy is released by DBT (Direct Benefit Transfer), typically within about 30 days of a clean submission.

The important word in step 3 is full. You borrow the whole amount up front, because the subsidy does not exist yet. It arrives only after commissioning and net metering, and any vendor who promises it earlier is guessing.

What happens when it lands depends on the bank. Most lenders take your loan account number so the DBT credit goes straight into the loan account and cuts the principal. Some credit your savings account instead and expect you to prepay. Either way, ask before signing: after the subsidy is credited, do you reduce my EMI or shorten my tenure? Lower EMI helps cash flow; shorter tenure saves more interest.

Subsidy amounts are fixed: ₹30,000 for 1 kW, ₹60,000 for 2 kW, and ₹78,000 for 3 kW and above, with ₹78,000 the hard ceiling. Group housing societies and RWAs get ₹18,000 per kW for common facilities, up to 500 kW.

Eligibility and documents checklist

Eligibility for the residential scheme is narrower than most people assume:

• An Indian resident with a valid, active electricity connection, ideally in your own name.
• A roof that is yours to use, structurally sound and largely shade-free.
• No central subsidy already claimed for a rooftop system at the same connection.
• ALMM-listed modules and, for subsidised residential projects, DCR (domestic content requirement) cells and modules.
• Age usually capped at 65 for a single borrower, or 75 with a co-borrower.

Documents for a loan up to ₹2 lakh are deliberately light: Aadhaar and PAN for KYC, the latest electricity bill, bank account details and recent statements, a passport-size photograph, the vendor quotation or proforma invoice, and property or occupancy proof where the bank asks for it.

Above ₹2 lakh, add income proof (Form 16 or two years of ITR, salary slips or business financials) plus a credit check. Several banks look for a CIBIL score of roughly 650 to 680 and above, and some require the system to be insured.

How to apply: step by step

The solar loan for home application runs across two government portals, and they are linked.

1. Register on pmsuryaghar.gov.in. You will need your state, DISCOM, consumer number and mobile number linked to Aadhaar.
2. Apply for feasibility approval from your DISCOM. This is a technical check on your connection and transformer capacity. It usually takes a few days to a couple of weeks.
3. Choose a registered vendor from the portal’s list of 34,000-plus vendors. Compare at least three quotations.
4. Apply for the loan. The portal directs you to jansamarth.in, the government’s single-window credit portal hosting fourteen credit-linked schemes including rooftop solar. Fill the form, pick your bank, and it runs an eligibility check and generates an in-principle sanction.
5. Complete bank formalities at the branch: signatures, hypothecation, standing instruction for the EMI.
6. Get the system installed and submit plant details on the portal.
7. Apply for net metering. The DISCOM inspects and installs the bi-directional meter.
8. Upload the commissioning certificate, then submit bank details for the DBT subsidy.

From registration to subsidy in hand takes two to four months in most states. The DISCOM inspection and net meter installation are the slowest steps, and they sit outside your vendor’s control.

How EMI is calculated, with a worked table

Any solar panel loan calculator or solar loan EMI calculator runs the same standard formula:

EMI = \frac{P \times r \times (1 + r)^n}{(1 + r)^n - 1}

Where P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly instalments.

For ₹2,00,000 at 5.75% over 10 years: r = 0.0047917, n = 120, EMI = ₹2,195.

The table below covers common loan sizes. The 5.75% rows are the concessional slab up to ₹2 lakh; larger loans are shown at 7.90%, a typical above-₹2-lakh solar panel loan rate.

Note the trade-off. Stretching ₹3,00,000 from 5 to 10 years cuts the EMI from ₹6,069 to ₹3,624 but roughly doubles the interest paid. If the 7-year EMI is already below your electricity bill, take 7 years.

2026 update: what changed this year

Three changes matter for anyone borrowing in 2026.

GST fell from 12% to 5% on solar devices, effective 22 September 2025. PIB says that made a 3 kW rooftop system roughly ₹9,000 to ₹10,500 cheaper. A smaller cost means a smaller loan.

ALMM List-II came into force on 1 June 2026. Approved domestic solar cells are now mandatory for government-supported, net-metered and open-access projects commissioned after that date. Non-listed panels are rejected at inspection, which stalls both subsidy and loan disbursement. MNRE allows case-by-case relief through the DCR portal. List-III, covering ingots and wafers, is due 1 June 2028.

Rates have been stable. The RBI held the repo at 5.25% at both the June and August 2026 MPC meetings with a neutral stance, keeping the 5.75% solar slab steady. The next MPC is in early October 2026.

Adoption has been fast: by early August 2026, 50.06 lakh households had installed rooftop solar under PM Surya Ghar, totalling 14.8 GW, with ₹28,024 crore disbursed by DBT. The target is 75 lakh households by December 2026.

Loans for commercial and industrial solar

C&I financing is a different market. The scheme rate does not apply, amounts are larger, and the lender looks at your business, not your electricity bill.

Bank term loans are the default: roughly 9% to 12.5%, 5 to 7 year tenures, 70% to 75% funding, sanction in 30 to 45 days. SIDBI runs concessional MSME lines, often 7% to 8% with a 6 to 12 month moratorium, for 100 kW to 2 MW projects. IREDA, the state-owned renewable lender, funds larger C&I projects from around 8.5%, with rooftop products nearer 10% to 11%; ticket sizes are large, so it suits MW-scale plants rather than a 50 kW factory roof. NBFCs and fintech lenders charge 10% to 16% but move faster.

Two routes avoid a loan entirely:

• OPEX / RESCO. A developer builds, owns and maintains the plant on your roof and you pay only for units consumed, typically ₹4.50 to ₹5.80 per kWh. Zero capex and no debt, but you do not own the asset and the savings are smaller.
• Lease. A fixed monthly rent for the system while you keep the generation. Simpler than a PPA, but the tax treatment differs, so check with your accountant.

The contract behind most OPEX deals is a PPA (Power Purchase Agreement), usually 15 to 25 years with a pre-agreed tariff and an annual escalation clause. Read that clause closely: 3% escalation over 25 years is a very different deal from a flat tariff.

At C&I turnkey prices of roughly ₹35,000 to ₹45,000 per kW above 100 kW, a capex system on a bank loan usually beats OPEX on lifetime cost, provided the business is profitable enough to use the tax benefit below.

Tax treatment for businesses

Solar power generating systems attract accelerated depreciation of 40% on written down value under the Income Tax rules, Appendix I. The Income-tax Act, 2025 reorganisation effective FY 2026-27 did not change the substance of this.

If the plant runs less than 180 days in the year of commissioning, only half the rate applies in year one, so 20%. Commissioning in September rather than November can be worth real money.

The additional 20% depreciation under the old Section 32(1)(iia) provision is often advertised as a universal solar benefit. It is not. It applies only to businesses in manufacturing, production, or generation and distribution of power, and companies under the Section 115BAA concessional regime cannot claim it at all. None of this applies to a residential borrower: homes get the subsidy, businesses get the depreciation.

What hurts your loan application

• A low or thin credit score. Below ₹2 lakh many banks skip the check; above it, a score under roughly 650 gets you declined or repriced.
• An electricity connection in someone else’s name. The commonest rejection reason. Transfer it first, or add that person as co-borrower.
• Unpaid electricity dues on the connection.
• A vendor not registered on the national portal. No registration, no subsidy, and often no loan.
• Non-ALMM or non-DCR panels. The system fails inspection, so the subsidy never arrives.
• Existing EMIs eating your income. Banks check total obligations against income above ₹2 lakh.
• Mismatched documents. Name spelling differences across Aadhaar, PAN and the electricity bill delay files for weeks.

Common mistakes to avoid

Assuming the subsidy cuts your loan up front. It does not. You borrow the full cost and the subsidy arrives months later.

Oversizing to chase a bigger loan. Subsidy is capped at ₹78,000 regardless of size, and export credit is often worth less than the retail tariff. Size to your consumption.

Taking a personal loan because it is faster. ₹2 lakh at 14% over 5 years costs about ₹78,000 in interest; the same amount under the scheme over 10 years costs about ₹63,000, with a far lower monthly outgo.

Ignoring the moratorium. Six months is convenient, but interest usually accrues. Ask whether it is added to the principal.

Not asking what happens after the subsidy lands. EMI reduction versus tenure reduction is a real choice with real money attached.

Choosing the cheapest quotation. A ₹45,000 per kW quote for a 2 kW system usually means thin structure, an unbranded inverter or no net metering support. The loan lasts 10 years; the system should last 25.

Not confirming the current rate. Every number here is indicative as of September 2026. Banks reprice. Call the branch.

Disclaimer

This article is general information about solar financing in India, not financial advice. Interest rates, subsidy amounts, eligibility rules and scheme terms change, sometimes without notice. Bank-specific figures are indicative as of September 2026, compiled from bank product pages and government sources. Verify every number with your bank, your DISCOM and, for tax questions, a qualified chartered accountant before deciding.

Frequently Asked Questions

Q1. What is the current solar panel loan interest rate in India?

For residential systems up to 3 kW under PM Surya Ghar, the concessional rate is repo plus 0.50%. With the RBI repo at 5.25% since June 2026 and held there in August 2026, that works out to about 5.75% a year. Above ₹2 lakh, expect roughly 7.90% and upward at public sector banks, and 10% or more from NBFCs and personal loans. These are indicative and floating.

Q2. Is the PM Surya Ghar loan really collateral-free?

Yes, up to ₹2 lakh. You do not pledge property and you do not need a guarantor. The bank does take hypothecation of the solar system itself, which means the equipment is charged to the lender, but that is not a separate asset you provide. Above ₹2 lakh, banks may add conditions such as insurance, a margin contribution and a minimum credit score.

Q3. Can I get a solar loan with no income proof?

For loans up to ₹2 lakh, several banks including SBI do not insist on income documents or a minimum credit score. KYC, an electricity bill in your name and a bank account are usually enough. Above ₹2 lakh you will be asked for Form 16 or two years of ITR, and banks typically look for a credit score of about 650 to 680 or higher.

Q4. How much can I borrow for a rooftop solar system?

Most public sector banks cap the residential scheme at ₹6 lakh, of which the first ₹2 lakh carries the concessional repo-linked rate. Indian Overseas Bank goes up to ₹20 lakh for individuals. Businesses borrow against project cost with no fixed retail cap, typically at 70% to 75% funding, through term loans, SIDBI or IREDA.

Q5. Does the subsidy come before or after the loan?

After. The bank sanctions and disburses against the full project cost. The subsidy is released by DBT only after the system is installed, the DISCOM has installed and certified the net meter, and you have uploaded the commissioning certificate with your bank details. Expect roughly 30 days from a clean submission, and two to four months overall.

Q6. Where does the subsidy money actually go?

Most banks require the DBT credit to land in the loan account so it reduces your outstanding principal. Some credit it to your savings account and expect you to prepay voluntarily. Confirm which applies before you sign, and ask whether the bank then reduces your EMI or shortens your tenure. Both usually save money, but in different ways.

Q7. What is jansamarth.in and do I have to use it?

JanSamarth is the central government’s single-window credit portal, hosting fourteen credit-linked schemes including PM Surya Ghar rooftop solar. After registering on pmsuryaghar.gov.in you are directed there to check eligibility, pick a participating bank and generate an in-principle sanction letter. It is the standard route for the scheme loan, though you can also approach a branch directly.

Q8. What is the SBI solar loan interest rate right now?

SBI’s Surya Ghar product is indicatively 5.75% a year up to ₹2 lakh and about 7.90% for ₹2 lakh to ₹6 lakh, with a maximum tenure of 120 months including a six-month moratorium, nil processing fee, no prepayment penalty and a 10% margin above ₹2 lakh. These figures are as of September 2026 and are floating. Confirm at the branch.

Q9. Does HDFC Bank offer a solar panel loan?

HDFC Bank does not run a repo-linked PM Surya Ghar retail product the way SBI, PNB and Bank of Baroda do. Solar purchases are usually funded as an unsecured personal loan, indicatively 10% to 24% a year over up to seven years. It disburses faster and needs less scheme paperwork, but costs far more in total interest.

Q10. How is the EMI on a solar loan calculated?

Using the standard formula:

EMI = \frac{P \times r \times (1+r)^n}{(1+r)^n - 1}

where P is the principal, r is the monthly rate (annual rate divided by 12 and by 100) and n is the number of months. Any online solar loan EMI calculator uses this. For ₹2,00,000 at 5.75% over 120 months, the EMI is ₹2,195.

Q11. Will my EMI really be less than my electricity bill?

Often, but not always. It depends on your tariff, your consumption pattern and your tenure. A 3 kW system generating about 375 units a month offsets around ₹3,000 at ₹8 per unit, against an EMI of about ₹1,976 over 10 years before subsidy. On a 5-year tenure or a low tariff, the EMI can exceed the saving.

Q12. Can I prepay or close my solar loan early?

Yes. The major public sector lenders running this scheme, including SBI and Bank of India, charge no prepayment or foreclosure penalty on floating-rate retail solar loans. That makes it sensible to route the subsidy and any surplus into the loan. Confirm the terms in your sanction letter, because personal loans and NBFC products often do carry foreclosure charges.

Q13. What is the processing fee on a solar panel loan?

Under the PM Surya Ghar scheme, most public sector banks charge nil processing fee. SBI, PNB, Bank of India and Indian Bank all show nil for this product as of September 2026. NBFCs and fintech lenders typically charge 1% to 3% of the loan amount, and personal loans usually carry a fee too. Ask for it in writing.

Q14. Does the loan cover batteries and other add-ons?

Usually only partly. The scheme loan is meant for a grid-connected rooftop system: panels, inverter, structure, wiring, and the net meter arrangement. Batteries are not subsidised and many banks exclude them from the concessional slab. If you want storage, expect to fund it from the higher slab, from your own money or from a separate consumer loan.

Q15. What depreciation can a business claim on solar?

Solar power generating systems attract accelerated depreciation of 40% on written down value under the Income Tax rules. If the plant runs for less than 180 days in the commissioning year, only 20% applies in year one. An extra 20% under the older additional-depreciation provision applies only to specific businesses, and not to companies under the Section 115BAA regime.

Q16. Are there alternatives to taking a loan for a commercial rooftop?

Yes. Under the OPEX or RESCO model a developer builds and owns the plant on your roof and you buy only the units generated, typically at ₹4.50 to ₹5.80 per kWh under a long-term PPA. There are also straight equipment leases. Both avoid debt and capex, but you forgo ownership, the depreciation benefit and most of the long-run savings.

Q17. Can a housing society take a solar loan?

Yes. Group housing societies and RWAs are eligible for subsidy on common-area systems at ₹18,000 per kW up to 500 kW, and banks lend against society resolutions and audited accounts. The lending terms are institutional rather than retail, so the concessional ₹2 lakh individual slab does not apply. Expect a longer sanction process and more documentation.

Q18. How long does the whole process take from application to subsidy?

Plan for two to four months in most states. Portal registration and feasibility approval take a few days to two weeks. Loan sanction through JanSamarth is usually a few days to two weeks. Installation takes two to five days. The slowest steps are the DISCOM inspection and net meter installation, then about 30 days for the DBT subsidy credit.

Talk to a Solnce Expert

Solnce Energy has installed over 100 MW of solar across India and works with 1,500+ customers. We handle residential rooftop, commercial and industrial systems, solar parks and PPAs, including subsidy paperwork and bank loan coordination end to end. Based in Surat, Gujarat, and backed on Shark Tank India Season 4. Get in touch for a site assessment and a clear, itemised quotation.