Homeowners Guide to a Solar Loan: Everything You Should Know

Going green does not only make sense, and that is now to switch to solar energy not only as an environmentally friendly action, but as a good financial one among homeowners in India. As electricity rates keep climbing, and with higher power usage among households, families are resorting to the rooftop solar facility to be placed in charge of their monthly payments.

But there is one more question, which people are retarded with:

Solar sounds attractive, however do I really need to pay the entire amount at the first hand?

No, and this is where solar loans are entered.

Here in this blog, we shall take you through, in a manner that is easy to understand and practical such that you make the right decision as a homeowner when it comes to needing a solar loan.

What Is a Solar Loan?

A solar loan can be described as a kind of financing that enables the homeowners to install rooftop solar equipment without necessarily paying the full cost. Rather, you deposit a minimal down payment (and even none at all) and pay off the rest of the amount in comfort in form of monthly EMIs over a stipulated period.

In simple words:

You install solar today. You pay for it gradually. You begin to save on bills of electricity immediately.

To most residents, the EMI is always less than the monthly residential electric charges and thus, solar remains a cheap addition instead of an investment.

Why is Solar loan gaining popularity in India?

The residential power consumption in India is rising at a high rate. Most households have elevated power consumption through appreciation of air conditioners, electric cars, work at home systems, and smart appliances.

At the same time:

●     The tariffs of electricity are growing annually.

●     Still common in most areas are power cuts, and voltage fluctuations.

●     There is increased awareness regarding clean energy.

●     Solar loans fill that intent to action divide by eliminating the inhibitor, the initial cost barrier.

How Does a Solar Loan Work?

The following is a step-by-step breakdown of the way a typical solar loan works among home owners:

●     System Assessment

Your solar installer examines the amount of electricity used in your home and the size of the roof and availability of sunlight to suggest which size system to install (e.g. 3kW, 5kW, etc.).

●     Loan Application

You also take a solar loan the terms of which are supplied by a partner bank or NBFC. Bezd achievements offer the services of different solar firms such as Solnce Energy who help homeowners with this process.

●     Approval & Disbursement

Upon approval, the amount loaned out is given straight to the solar installer.

●     Installation- Commissioning

Your rooftop solar system is up and running, and it is tied into the grid.

●     EMI Repayment

You make the payments on the loan in installments monthly as you enjoy reduced electricity bills since day one.

Forms of Solar Loans that home owners can obtain.

• Bank Solar Loans

Provided by banks of the public and private sector, they are typically competitive in interest rates and are of more expanded tenure.

• NBFC Solar Financing

NBFCs could provide a quicker approval and lightened paperwork, which is suitable in the case of the homeowner who is self-employed or receives a salary.

• Collateral-Free Loans

There is an option of most residential solar loans being unsecured, which implies that you do not have to mortgage your residence or assets.

• Interest Rates & Loan Tenure

Although the rates can differ based on who you lend with, and your own credit report, in India average solar loans can come with:

• Interest rates: 8%–12% per annum
• Holding period of loan: 3 to 7 years (and in some cases, 10 years)

The idea is to design EMIs in a manner that they save your electric money every month in case of solar, it is virtually budget-neutral.

Solar Loans: Can the Government Subsidize?

Yes. Under the MNRE rooftop solar scheme, residential rooftop solar systems can be subsidized by the government provided that they satisfy some conditions.

Key points:

• Subsidy is only applicable to homeowners in residential houses.
• The system should be connected to the grid.
• Specifications and approved vendors have to be observed.
• The subsidy helps in cost reduction of the entire system hence lowering the loan amount and EMIs.

Advantages of Taking a Solar Loan:

●     Zero or Low Upfront Cost

●     You do not have to commute to the savings account or hold your solar plans.

●     Immediate Bill Savings

●     The money you save on electricity bills begins within the first month only.

●     Hedging against Rises in Tariff.

●     Solar shields will save you increasing electricity bills, 25 years and more, once in place.

●     Increased Property Value

●     Solar systems are considered energy efficient and future ready.

●     Clean & Sustainable Living

●     You save on carbon footprint and get financial benefits.

Whether a Solar Loan is superior to Paying in Cash or Not?

Use of cash is fine when you have more in the hand and would need to make quicker ROI. Nevertheless the solar loan is best in case:

●     You would like to have your savings in the form of liquidity.

●     You like budgeting on a monthly basis.

●     You are already paying too high on electricity.

●     You require high returns than conventional investments.

Solar loans provide a superior cash-flow solution to a large number of homeowners.

The Things to Be Checked Before a Solar Loan.

It is very important to know before you are registered:

●     Principal and interest rate of loan.

●     EMI amount and tenure

●     There are prepayment or foreclosure fees.

●     Maintenance and warranty

●     violent crime coverage.

Net metering process

All this will be made clear initially by a transparent solar partner.

The easy way of Solar Loans by Solnce Energy. The vision of the company is that solar is uncomplicated, convenient, and hassle-free to the customers at Solnce Energy.

Here’s how we help:

●     Individualized size of solar systems.

●     Solar loan advising and subsidy advising.

●     Availability of creditworthy business partners.

●     Net metering and end to end installation services.

The India solar is the first solar app that allows easy monitoring. It is our ambition, which means that money is never an obstacle on the way to clean energy assimilation.

Final Thoughts

Solar loan will transform rooftop solar desirable as a one-day plan into a today's decision. You can spend the same money that you would spend on electricity bill every month which yields no results on something that:

●     Pays for itself

●     Saves money long-term

●     Supports a cleaner future

Solar loans are not just a financing tool to home owners, but they are the reason behind energy independence.

A solar loan can offer you the right time to go solar, it was the period in your mind you were waiting to get the right time to do it.

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