April 06 2015 0Comment

Commercial Solar System Finance Options

What are financing options available for the solar system in Gujarat?

Are you planning to install a commercial solar system in Gujarat? Then you should know about the financing options available to you.

There are many types of financing options such as cash, bank loan, a business loan from any private or public financial institution, or installing a rental solar system.

Generally, the financing of solar commercial systems is done according to two models in India – the CAPEX model and the RESCO model.

In the CAPEX Model, the customer pays 100% of the cost of the solar power installation upfront. This model is great for small residential solar power installations which cost only Rs. 50,000 to Rs. 1 lakh. This amount can be earned back in about 4 years. Such amounts are paid by cash.

For large commercial solar installations, taking a bank loan is a common option. While many businesses to pay by cash, bank loans are the preferred option because banks encourage solar installations.

 This is due to a directive from the Department of Financial Services, of the Ministry of Finance of the Indian government in 2014, which issued this: advisory to all banks in the public sector: “All banks are advised to encourage the home loan/home improvement loan seekers to install rooftop solar PVs and include the cost of such equipment in their home loan proposals just like non solar lighting, wiring, and other such fittings”.

Under RBI mandated Priority Sector Lending, a company or business can avail a loan of up to Rs 15 crore for larger renewable energy projects.

Contact us for a list of banks that provide solar energy financial for commercial businesses at excellent rates.

 In the RESCO Model, you have a third party that finances and installs the solar plant.  This means you don’t have to make an upfront payment. The RESCO model is done in two ways…

Rooftop Leasing – Here a third party pays a fixed amount to the owner of a building or land on a monthly basis for giving them the space to install the solar PV system.

Power Purchase Agreements (PPAs) – The owner of the premises gets solar energy for low costs from the developer for providing them with space for the installation.

You are welcome to contact us to know more about the financing options available to you for your commercial solar installation. We are also happy to provide you with the best quotes from the 3 best solar installers in Gujarat.

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