How do I apply for a solar loan?

How do I apply for a solar loan

Solar is free, but the installation isn’t. Falling short of cash? Don’t have enough capital to go Solar? Are these things holding you back from owning a long term valuable asset? Then don’t worry you are in the right place. Shortly you are going to discover that these situations are no longer the obstacles for your monetization of the energy in future. Now you can easily maximize your profit by opting for Solar Loan without actually side-tracking or worrying about the liquidity of your own capital. The process is much more simplified now just like buying a home loan policy for you. 

Apparently, the Indian Government is uplifting the solar sector by providing Solar financing through many organizations, private institutions, banks, and Solar EPC companies at reasonable costs. They are readily available to offer a complete financially feasible solution for your solar project. This is in accordance with the statutory instruction by the Ministry of Finance. The usual cost of setting a plant is nearly 50 million/MW in India. 30% of the cost is through equity and the rest is covered by debt financing. If this high budget bothers you, read along because we are going to discuss the option of solar loan or solar finance in detail. 

When you decide to embark on your solar journey you should always prefer solar quotes tailored to your needs. Choosing a good solar EPC company such as Soleos renders multiservice options under one roof so your process is undisturbed and requires low upkeep. In addition to providing solar EPC services, they also provide funding for your projects in the form of Debt for project financing which is typically larger around 70-85% of the total cost, or Equity for an initial capital requirement which is around 15-30% of the total project investment cost, and some provide debt-equity mix type. You need to define your route if you want a secured loan or an unsecured loan.

A secured loan typically involves collateral for the loan while an unsecured loan doesn’t have any such clause. However, there are different implications for the borrower for the respective type. Also, you need to look for the duration of the loan that would determine your monthly installments for repayment. It is advised to keep the repay span shorter in order to enjoy the benefits of energy-saving and also you pay considerably less interest over time. Such an option might provide value-added services quite soon. India has comparatively low installation costs for solar PV systems than other countries. Precisely India has twice the sunlight and half the costs. 

Now how do you apply for a loan? Let us explore the various domestic and international options of institutions available for Solar financing in India.c

Indian public sector and private banks :

Debt finance for the solar projects is provided by many public sectors and private banks like State Bank of India, Central bank, Bank of Baroda, ICICI, at an interest rate of 11% – 13%. They are usually for 7-8 years and can be extended up to 15 years. A public release by the Indian government stated that among public sector banks, the State Bank of India would be financing the biggest capacities of 15,000 MW with a cost of 75,000 crores trailed by IDBI bank 3000 MW

Private sector NBFCs :

are involved in Debt financing and are obliged for financing Renewable energy projects of 76,352 MW capacity with an expense of 3.82 lakh crore over 5 years through green commitment certificates.

IREDA :

Indian Renewable Energy Development agency is a NBFC under the administration of MNRE- Ministry of New and Renewable Energy. They provide term loans for renewable energy-efficient projects up to 75% coverage of the total project cost. They provide loans at a comparatively lower rate of interest and it is mediated through either direct lending or financial intermediaries. Also, the collateral that has to be provided in securing the loan is only 10%-33% of the total repayment amount.

International Finance Corporation :

a division of the World Bank is involved in financing solar undertakings in India. It offers services under one roof for equity debt and organized funds for companies looking for a good time with renewable energy. It is one of the first global financers in India

Asian development bank

is emerging as a leader in financing solar projects in India. Many funds are also available that provide equity at a considerable rate and supports solar projects.

The Rural electrification company

aids in solar installation through its financing by debt-equity mix which is 70:30 for private sectors.

Kreditanstalt fuer Wiederaufbau German’s bank

also supports the solar projects in India through financing by KFW Development Bank.

International Financing

is also an active option but the time to process the loan is longer than usual and hence it delays the beginning of the installation. However, the interest rates are lower in International Financing. It is available for the tenure of 16- 18 years.

Solar EPC Companies

are one-stop solutions for the needs of all the involved stakeholders involved that provide solar project financing through the debt-equity mix. Right from Project Development,  solar EPC, and Storage O&M to financing, they offer a streamlined process for end-users. They offer CAPEX as well OPEX projects in accordance with the needs. These are the scope of Solar Finance in India. Now there are various parameters that are looked for before you are sanctioned the loan.

Steps Involved In Financing Of A Solar Project:-

Loans are the most convenient and inexpensive solutions when it comes to solar projects. They are reliable when you need the working capital for continuous workflow and also at the same time you cannot liquefy your capital to go for an energy-efficient solution. Financing your solar project gives you complete ownership of your PV system and then it just has to be maintained routinely by your EPC companies. 

However, you have the option of going with solar EPC companies for all your energy needs. Independent power producers, Developers, manufacturers, EPC, contractors and investors, the industrial and commercial end-users engage in the financing of the projects in different time frames. Debt and equity financing go hand in hand because the projects at some point of their life cycle are under debt and that is obliged to be repaid by the borrower.

What Makes Soleos Different?

Solar Finance has always been the core of our business development activities. Soleos works on the principle of risk mitigation for your solar projects, sharing the financial burden of the customers and providing additional benefits of providing solar loans thus fulfilling commitments made by us. We understand the massive requirement of capital for the projects according to the needs and thus provide comprehensive assistance to our customers. Soleos is more inclined to provide cash equity finance to our customers. Solar project finance is not merely a deal or negotiation of financial restructuring, it’s much more that which necessarily involves scrutiny of procedures, due diligence, EPC contracts, legal permits, cash management, tax analysis, and the list continues. Soleos is known for providing satisfaction to all its stakeholders through well-defined streamlined process flow.

Soleos highlights some distinguishable features :-

Let us take a tour of our process flow. By and large, we follow a clear and legible 8 step process which includes:-

With such predefined strategies and expertise in the industry, we are here to offer you a holistic package that you can’t resist for your solar projects and growing energy demands. We are a trusted and acclaimed solar EPC Company in India to help you redefine your future with renewable energy. 

So this time give a chance to Soleos for your Solar Finance.