Solar Power Loan in India: Compare Banks and Rates

When you're ready to install rooftop solar panels on your home, financing matters. A solar power loan can make a 1-3 kW system affordable. The PM Surya Ghar government scheme backed by PSU banks offers rates starting at 5.75% p.a., the lowest retail loan rates available. But every bank works differently. SBI has one rate structure, Canara Bank a different one, and if you prefer private banks, HDFC won't have a dedicated scheme. That's why comparing side by side saves you money.

Key Takeaways

• PM Surya Ghar, launched February 2024, is the main financing framework for residential solar loans in India with a ₹75,021 crore fund.
• PSU banks offer solar loans at 5.75-7.90% p.a. with zero processing fees and no credit score requirement for smaller loans.
• Government subsidy ranges from ₹30,000 for 1 kW to ₹78,000 for 3 kW, added to your loan account after installation.
• You need age 18-65, a credit score of 650+ for larger loans (or no score needed for SBI up to ₹2L), and proof of rooftop ownership.
• The two-step application: register at pmsuryaghar.gov.in, then apply via jansamarth.in.

How do solar power loans work?

A solar power loan pays for rooftop panel installation. Unlike a regular personal loan, your bank sends money straight to your solar contractor, not to you. The government subsidy gets added to your loan account after installation.

Here's how it works. You get a quote from an MNRE-registered installer. You register at pmsuryaghar.gov.in to unlock the subsidy. You apply for a loan through jansamarth.in, where banks compete for your business. Your bank approves and sends money straight to your contractor. Once installation passes inspection, you request the government subsidy. That subsidy reduces your loan balance.

The result: you don't pay the full project cost upfront. You finance it, your monthly payment starts after a 6-month wait, and the subsidy credit lowers your principal, cutting total interest.

Which banks offer the best rates?

This is where comparison saves money. Every bank posts different terms on different pages. Here's what major PSU banks offered in 2026.

SBI wins for affordability. It waives credit score requirements for loans up to ₹2 lakh. This makes it the entry point for first-time borrowers installing 1-2 kW systems. Canara Bank also accepts borrowers with no credit history for smaller amounts.

Two notes. First, Bank of Baroda targets business borrowers, not homeowners. Second, Ecofy is an NBFC that doesn't participate in PM Surya Ghar subsidy. Borrowers using Ecofy lose the government credit.

Want to see current rates for your area? Use our comparison tool to filter by lender and check your eligibility.

How do you apply for a solar loan?

The PM Surya Ghar scheme has a two-step process. It's simple once you know the steps.

Step 1: Register at pmsuryaghar.gov.in. You need your Aadhaar, electricity bill to prove your address, and your installer's MNRE registration number. This locks in your subsidy eligibility before you contact any bank.

Step 2: Apply via jansamarth.in. This portal lists all participating PSU banks with side-by-side rates. Pick your bank, submit your application, and upload: Aadhaar, PAN (for loans above ₹2L), electricity bill, income proof (tax return or Form-16 for loans above ₹2L), and your installer's quote plus MNRE certificate.

Step 3: Bank sends the money. Your bank sends money straight to your contractor, not to you. Installation happens, and once the system passes MNRE inspection, you get a completion certificate.

Step 4: Claim your subsidy. Upload the completion certificate at pmsuryaghar.gov.in. Within 30-60 days, the subsidy is added to your loan account. Your loan balance drops, and remaining payments are recalculated lower.

Step 5: Start paying back. From when your bank sends the money, you get a 6-month break. You pay only interest. No principal is due. In month 7, your first full payment starts. For a ₹2 lakh loan at 7.90% p.a. over 10 years, that's about ₹2,225 per month. After the ₹60,000 subsidy is added, your balance drops to ₹1.4 lakh, and remaining payments adjust lower.

What you need: Aadhaar, PAN (for loans above ₹2L), latest electricity bill, income proof (2 years of tax returns or latest Form-16 for loans above ₹2L), installer's quote from an MNRE-registered company, and proof you own the rooftop.

Frequently Asked Questions

Is a solar loan interest-free?

No. Solar loans charge interest like any other loan. SBI Surya Ghar starts at 5.75% p.a., the lowest rates in India. Regular personal loans at SBI start around 9.99% p.a. After the government adds the subsidy, your balance is lower, so you pay less total interest.

What is the government subsidy?

PM Surya Ghar gives you a fixed amount: ₹30,000 for 1 kW, ₹60,000 for 2 kW, and ₹78,000 for 3 kW. For a 2 kW system costing ₹1.30-1.40 lakh, the subsidy covers about 43-46% of cost. This is why people say it's "about 50%." The subsidy is added after installation, not upfront.

Do I need a credit score?

It depends on the bank and amount. SBI Surya Ghar waives the score requirement for loans up to ₹2L. Canara Bank accepts borrowers with no credit history for smaller amounts. For loans above ₹2L, both banks need a score of 650-680. If your score is low but you need more money, a co-borrower with good credit can help you get approved.

What is the loan term?

Most PSU banks offer 5, 7, and 10-year terms. SBI's standard is 10 years, which lowers your monthly payment. You can pay off early with no penalty.

Is there a waiting period?

Yes. All PM Surya Ghar solar loans include a 6-month wait from when your bank sends the money. You pay only interest during this time. Your first full payment starts in month 7. This gives you time to see savings on your electricity bill before full repayment.

Can I apply if I rent my home?

No. You must own the rooftop or have written permission from the owner. Rented homes don't qualify. Most PSU banks need rooftop ownership as loan security.

What if my installer disappears?

The MNRE inspector checks installation on their own. Once your system passes inspection, you get the certificate from the MNRE inspector, not your installer. If the installer vanishes later, it doesn't affect your subsidy claim because the check is done. Choose your installer carefully, as they're responsible for workmanship and warranty.

Can I upgrade later from 2 kW to 3 kW?

You'd need a new loan application. Each PM Surya Ghar subsidy claim applies to one system per home. If you upgrade, file a new application and claim a new subsidy for the added capacity.

Ready to compare?

A solar power loan under PM Surya Ghar is the fastest, most affordable way to go solar in India today. Rates are low (starting at 5.75%), the subsidy is big (up to ₹78,000), and the application is simple once you know the two-step flow. But every bank's terms are different.

Use our loan comparison tool at BankCreds to see all PSU solar loans side by side. Check your eligibility instantly, compare rates, and apply straight to your bank. You'll find rates, terms, and qualifications for SBI, Canara, PNB, and other banks in seconds. Read real reviews from other borrowers before you decide.

Start with our free eligibility checker and see which bank and rate works for your project today.