The sun shines abundantly on India, casting its warm glow and holding immense potential for clean energy. Recognizing this, the government launched the ambitious PM Surya Ghar Muft Bijli Yojana, aiming to empower 1 crore households with rooftop solar panels by providing free electricity for up to 300 units per month. While the scheme offers attractive subsidies, some upfront costs might remain. This is where bank loans come in, making your journey towards solar power smoother and more accessible.

Understanding the Subsidy:

The PM Surya Ghar Muft Bijli Yojana offers generous subsidies based on the capacity of the solar panels you install:

  • Up to 2 kW: Rs. 30,000 per kW
  • Additional capacity up to 3 kW: Rs. 18,000 per kW
  • Total subsidy for systems larger than 3 kW: Maximum Rs. 78,000

Remember, these subsidies are directly credited to your bank account, reducing your out-of-pocket expenses significantly.

Exploring Bank Loan Options:

If the remaining cost after the subsidy is still a concern, several banks offer attractive loan schemes specifically designed for rooftop solar installations. Here are some popular options:

  • State Bank of India (SBI): The Solar Roof Top Finance Scheme for residential purposes provides loans up to Rs. 10 lakh with a 5-year repayment tenure. Interest rates range from 9.65% to 10.65% based on your credit score.
  • Union Bank of India: The Union Roof Top Solar Scheme (URTS) offers loans up to Rs. 15 lakh or 80% of the project cost (whichever is lower) for individuals with independent houses.
  • HDFC Bank: The Green Home Loan Scheme provides loans up to Rs. 50 lakh for various green initiatives, including rooftop solar installations. Interest rates are competitive and vary based on loan amount and tenor.
  • ICICI Bank: The Solar Finance Scheme offers customized loans for individuals and businesses looking to install solar panels. Loan amounts and interest rates are determined based on individual profiles.

Choosing the Right Loan:

Before applying for a loan, carefully compare different options and consider the following factors:

  • Loan amount: Ensure the loan amount covers the remaining cost after the subsidy and any additional expenses like installation charges.
  • Interest rate: Opt for a loan with a competitive interest rate to minimize overall costs.
  • Repayment tenure: Choose a repayment tenure that aligns with your budget and financial comfort.
  • Processing fees: Compare processing fees charged by different banks and factor them into your decision.
  • Prepayment charges: Understand any prepayment charges associated with the loan, as you might want to pay it off early with the savings from your electricity bills.

Additional Tips:

  • Check your credit score: A good credit score can help you secure better interest rates.
  • Negotiate terms: Don’t hesitate to negotiate the interest rate and processing fees with the bank.
  • Compare online portals: Several online platforms compare loan options from different banks, making it easier to find the best deal.
  • Avail tax benefits: Remember that the interest paid on your solar loan is eligible for tax deduction under Section 32 of the Income Tax Act.

Embrace the Sunshine, Empower Your Home:

By leveraging the PM Surya Ghar Muft Bijli Yojana and exploring bank loan options, you can harness the power of the sun to generate clean energy, reduce your electricity bills, and contribute to a sustainable future. So, take the first step towards a brighter, greener tomorrow – light up your home with solar power.

Please note:

  • GrowWise is not registered with the Securities and Exchange Board of India (SEBI) as an investment advisor, research analyst, or portfolio manager.
  • The information published on this blog is presented for educational purposes only and should not be construed as financial advice.
  • We strongly recommend that you seek the advice of a qualified financial advisor before making any investment decisions.