In 2026 a Gujarat household can install rooftop solar with little or no upfront cash by combining the PM Surya Ghar ₹78,000 central subsidy with a collateral-free bank loan priced at "repo rate + 0.50%" — currently about 5.75% per annum for loans up to ₹2 lakh (the RBI's Monetary Policy Committee held the repo rate at 5.25% on 5 June 2026, a third consecutive pause). Repayable over up to 10 years, with a monthly EMI typically lower than the electricity bill it replaces.
The short version
- For a typical 3 kW home system (about ₹1.65–1.95 lakh before subsidy, roughly ₹1 lakh after the ₹78,000 subsidy), the EMI works out to roughly ₹1,100/month over 10 years or ₹1,920/month over 5 years at 5.75%, against electricity savings of ₹2,000–2,500/month — so the system largely pays its own bill.
- Businesses and factories choose between CAPEX (finance and own the system, claim 40% accelerated depreciation, best lifetime returns) and OPEX/RESCO (a developer owns the system on your roof and you buy the power at a fixed per-unit rate under a 15–25 year PPA — zero upfront cost but lower long-term savings).
1. PM Surya Ghar collateral-free loan (residential)
The scheme provides a collateral-free loan up to ₹2 lakh for systems up to 3 kW, and up to ₹6 lakh for systems above 3 kW and up to 10 kW (cost assumed around ₹70,000/kW). Key verified terms:
- Interest rate: Officially "repo rate + 0.50%." At the current 5.25% repo rate this is about 5.75% p.a. for loans up to ₹2 lakh (per SBI's published rate sheet). For loans above ₹2 lakh up to ₹6 lakh, SBI charges 7.90% p.a. cost-free home-loan customers; their home-loan rate, for above, Rates are floating and reset with the RBI repo rate, usually within 90 days.
- Collateral: None required up to ₹2 lakh. Between ₹2–6 lakh the solar system itself is hypothecated (pledged) as security.
- Tenure: Up to 120 months (10 years). SBI applies a moratorium of up to 6 months.
- Processing fee: Nil at SBI, Bank of Baroda, and Canara Bank under the scheme.
- Margin / down payment: 10% of project cost for systems up to 3 kW; 20% above 3 kW to 10 kW. For a 3 kW system this means roughly ₹18,000–20,000 of your own money upfront.
- No income documents are required for loans up to ₹2 lakh.
- How to apply: First register on pmsuryaghar.gov.in (the National Portal), get DISCOM feasibility approval, then apply for the loan through jansamarth.in (the government's single-window loan portal, integrated with the scheme). Loan disbursement goes directly to the MNRE-registered installer. Per Mercom India citing the Ministry of Finance, as of September 2025, public-sector banks had "approved more than 579,000 loan applications worth ₹109.07 billion (~₹1.23 billion)" under the scheme via the Jan Samarth Portal — evidence the loan route is widely used.
- Participating lenders: 12 public-sector banks including SBI, Canara Bank, Union Bank of India, Bank of Baroda, Punjab National Bank, Bank of India, Indian Bank, and Central Bank of India.
2. Specific bank solar loan products (2026)
- SBI Surya Ghar: Loan up to ₹6 lakh; 5.75% for ≤₹2 lakh and 7.90% for ₹2–6 lakh (RLLR/EBLR-linked, floating); tenure up to 120 months with up to 6-month moratorium; nil processing fee. SBI also runs a Surya Shakti solar finance scheme for MSME businesses. Apply via SBI's site or Jan Samarth.
- Canara Bank (CRTS – PM Surya Ghar): Reducing-balance rate, no processing charges, no collateral up to ₹2 lakh; finances the up-to-₹2 lakh and ₹2–6 lakh tiers.
- Bank of Baroda: "PM Surya Ghar Yojana – Standalone" and a "Composite" version bundled with a home loan; up to 90% of project cost; nil processing fee; maximum tenure 120 months.
- PNB, Union Bank, Central Bank of India offer comparable PM Surya Ghar products at repo/EBLR-linked rates.
- Most rates fall in the roughly 5.75%–8.5% band depending on loan size, lender, and credit profile. All are floating (repo-linked), so EMIs can move with RBI rate changes.
3. EMI examples (3 kW home system, Gujarat)
Assume net cost after subsidy ≈ ₹1,00,000 (3 kW system ~₹1.65–1.95 lakh before the ₹78,000 subsidy).
- At 5.75% over 10 years: EMI ≈ ₹1,100/month.
- At 5.75% over 5 years: EMI ≈ ₹1,920/month.
- If you only qualify for a higher rate (say ~8%), the 5-year EMI is closer to ₹2,030/month.
A 3 kW system in Gujarat generates roughly 360 units/month, worth about ₹2,000–2,500/month in avoided electricity bills at residential tariffs. So the EMI (₹1,100–1,920) is broadly offset by the monthly savings — you genuinely solar for itself while you repay. After the loan ends, electricity is essentially free for the remaining 15–20 years of system life (panels typically last 25+ years).
4. Commercial & industrial financing (2026)
- CAPEX (buy/own): Pay upfront (own funds or a business/term loan). For C&I rooftop above 100 kW, installed cost is about ₹38–50 per watt. You own a 25-year asset, claim 40% accelerated depreciation in Year 1 (plus 20% on written-down value thereafter) and 5% GST input tax credit, and keep 100% of savings. Best ROI (commonly an 18–22% internal rate of return) but needs capital and you handle O&M. Note: residential homeowners cannot claim depreciation; only businesses can.
- OPEX / RESCO (zero upfront): A Renewable Energy Service Company finances, installs, owns, operates, and insures the system on your roof. You sign a Power Purchase Agreement (PPA) for 15–25 years and buy the solar power at a fixed tariff — typically ₹4.50–5.00/kWh in 2026, well below industrial grid tariffs of ₹8–12/kWh. Pros: no upfront cost, no maintenance, off-balance-sheet, savings from day one. Cons: you don't own the asset, the developer (not you) claims depreciation and GST credit, you're locked into a long PPA, and lifetime savings are lower than CAPEX. RESCOs usually target systems above 200 kW.
- Business loans & MSME schemes: SIDBI's 4E ("End-to-End Energy Efficiency") scheme finances MSME solar, potentially up to 100% of project cost. PSU and private banks offer term loans/equipment finance; NBFCs like Tata Cleantech, Electronica Finance, Sunvest, Metafin, cKers, and Oakridge actively fund C&I solar. Bank/NBFC commercial solar rates broadly run in the high single digits to ~10%.
- IREDA (govt. renewable lender): Its rooftop solar scheme finances 75–80% of project cost; rooftop lending rates are around 10.05–10.90% (project finance for larger plants around 8.55–9.50%), with tenure up to 9 years and a 12-month moratorium; minimum aggregated capacity 1 MW (aggregator or direct).
- Tata Power SunSmart Flexi EMI: Per Tata Power's official media release dated 17 March 2026, this "first of its kind SunSmart Flexi EMI Scheme – 'Pay As you Save'" (with Tata Capital) is for C&I customers and "links customer repayments to estimated solar power generation" — collateral-free EMIs aligned to output.
5. Other financing options
- NBFC / fintech solar loans: Faster approval (2–5 working days vs 7–15 for PSU banks); useful for borderline credit or urgent timelines, usually at higher rates.
- EPC-partnered financing: Many installers (and Tata Power Solaroof) bundle loan tie-ups, documentation help, and EMI plans, sometimes with low/zero down payment.
- Green loans / home-improvement routes: Some banks fund solar under priority-sector or home-improvement lending; Gujarat's residential solar policy notes loans up to ₹10 lakh available to individuals under priority-sector lending.
- State-level (Gujarat) support: A confirmed standing state cash top-up over the central ₹78,000 could not be verified from GEDA/GUVNL; treat installer-blog claims of an extra Gujarat subsidy as unconfirmed and check with GEDA or your DISCOM.
6. Down payment and subsidy strategy
The ₹78,000 subsidy is paid by Direct Benefit Transfer after commissioning and net-meter installation. MNRE indicates the subsidy is "generally processed within 15 days of a valid request," though in practice many homeowners report 30–90 days end-to-end. Two common approaches: (a) finance the post-subsidy amount and put down the 10–20% margin; or (b) borrow the full system cost, then pre-pay the loan with the subsidy when it arrives. Because these scheme loans carry no prepayment penalty, the second sharply cuts the outstanding principal and interest. Plan to cover full EMIs during the 1–3 months before the subsidy lands.
7. Cost context (2026 Gujarat)
- 3 kW: ₹1.65–1.95 lakh before subsidy → ~₹0.9–1.2 lakh after ₹78,000.
- 5 kW: ₹2.5–3.0 lakh before subsidy (subsidy still ₹78,000 for residential, since the cap applies at 3 kW).
- 10 kW: ₹4.75–5.5 lakh before subsidy.
- Commercial: ~₹38–50/watt for systems above 100 kW.
Our recommendations
- Homeowners with steady income but limited cash: Take the PM Surya Ghar collateral-free loan via Jan Samarth, choose a tenure that keeps your EMI at or below your current electricity bill (the 7–10 year option), and prepay with the ₹78,000 subsidy when it arrives. Confirm the live rate (target ~5.75% for ≤₹2 lakh) and nil processing fee at the branch.
- Homeowners who can pay cash: Buying outright is cheapest (no interest) — but if a near-6% loan EMI is fully covered by savings, financing preserves your cash and builds real cost.
- Profitable businesses/factories that own their premises: Prefer CAPEX with a bank/IREDA loan, then stack accelerated depreciation + GST ITC for the fastest payback (often 3–5 years).
- Businesses short on capital, on rented premises, or tax-exempt (schools, hospitals, trusts): Prefer OPEX/RESCO for zero upfront cost — but negotiate the PPA carefully.
- Benchmarks that change the decision: If the RBI repo rate rises materially, lock tenure/rate expectations accordingly; if your roof exceeds ~250 kW potential, solicit RESCO bids; if you can commission a commercial system before the financial year-end, you capture the full first-year depreciation.
Want help arranging finance?
We help our customers register on the National Portal, line up the right PM Surya Ghar loan, and structure the subsidy prepayment — so going solar costs you little or nothing upfront.
Talk to us about financingThis is educational content, not financial advice — compare lenders and read all terms before signing. Rates are floating and verified figures move: the ~5.75% scheme rate is tied to the RBI repo rate (5.25% as of June 2026) and will change; always confirm the current rate, processing fee, and margin at the bank. Source conflict: several installer/aggregator blogs cite SBI PM Surya Ghar at ~7.15%; SBI's official rate sheet shows 5.75% for loans up to ₹2 lakh. "Zero-cost solar" claims usually mean an OPEX/RESCO/PPA arrangement — you save money but do not own the system; read the PPA's escalation clause, tenure, minimum-offtake, and buyout terms. The ₹78,000 cap applies at 3 kW; larger residential systems do not get more central subsidy. A standing Gujarat state top-up subsidy is unconfirmed — verify directly with GEDA/your DISCOM.