Everything You Need to Know Before Financing and Installing Solar Panels at Home 

Everything You Need to Know Before Financing and Installing Solar Panels at Home 

Adopting solar energy for your home is a long-term investment in a greener, more sustainable future. As electricity costs continue to rise and the environmental impact of fossil fuels becomes more evident, homeowners are increasingly making the switch to solar. But before installing solar panels, it is crucial to understand the financial aspects of the process. Solar financing is a key step in ensuring your solar power system is both affordable and effective.

If you’re planning to install solar panels, you’ll need to consider a range of factors, from your creditworthiness to the available incentives, vendor options, and long-term cost savings. This guide walks you through the top 5 things to consider before financing and installing a rooftop solar energy system.

1. Understand and Assess Your Credit Score

Your credit score plays a vital role in solar financing. Like applying for a home loan, a strong score helps you get better rates and flexible EMIs. Check your credit score before applying, and improve it if necessary to secure favorable terms.

2. Explore Your Solar Loan Options

Solar loans help manage upfront costs with repayable EMIs. You can choose between secured or unsecured loans based on system size and energy needs.

  • Interest rates: Lower rates reduce total cost.
  • Payback period: Understand how soon you’ll see savings.
  • Vendor partnerships: Some installers simplify financing via partner lenders.
  • Reliability: Choose a transparent and credible lender.

Always compare multiple lenders to get the best terms.

3. Documents You’ll Need for Solar Financing

Prepare these for faster loan approval:

  • 3 years’ financials and ITR
  • 12 months’ bank statements
  • Current year GST returns
  • KYC: Aadhar and PAN
  • Proof of residence and factory ownership
  • Last 6 months’ electricity bills

4. Alternative Solar Financing Options You Should Know

  • Leasing: Lower upfront cost, but no ownership or subsidies.
  • Power Purchase Agreements (PPAs): Pay for power, not the system. Ideal for no-maintenance setups.
  • Vendor EMI options: Convenient but compare with independent lenders.

5. Tap into Government Subsidies and Incentives

  • Subsidy programs: PM-KUSUM, Surya Ghar Yojana, state schemes
  • Tax credits & rebates: May vary by location
  • Net metering: Sell excess energy back to the grid
  • Renewable Energy Certificates (RECs): Earn from clean energy contributions

Should You Buy or Lease Your Solar Power System?

Buying:

  • Greater long-term savings
  • Eligible for incentives
  • Boosts property value
  • Full ownership of energy system

Leasing:

  • Lower upfront cost
  • No maintenance hassles
  • Fixed monthly payment

Smart Steps to a Successful Solar Journey

Evaluate your energy needs, verify vendor quality, assess panel durability (minimum 25 years), and check for incentives to maximize ROI. Making informed decisions now ensures long-term energy savings.

Ready to Make the Switch?

Going solar helps the environment, cuts your power bills, and makes your home more resilient. Apply now for solar financing through the EFL Clik App.

FAQs

1. What is the total cost of the solar panel installation?
A 10 kW rooftop system typically costs ₹5–6 lakhs before subsidies, depending on type and installation.

2. How to finance solar panel installation?
You can use personal loans, solar loans, vendor EMI plans, or PPAs. Compare each option carefully.

3. What is a good interest rate for a solar panel loan?
A good rate ranges from 9% to 14% annually. Your credit score and lender type influence the final rate.

Ashutosh P
Ashutosh P

Ashutosh has more than 18 years of experience in commercial banking and SME finance. He heads the branding and marketing for the company and is also the product head for the secured business finance and rooftop solar finance business. Ashutosh boasts over 20 years of extensive experience in the fields of commercial banking and SME finance. Currently, he holds multiple key roles within the organization, including heading the MD's office, overseeing Strategy and Marketing, and serving as the Product Head for the rooftop solar finance division. Additionally, he spearheads various initiatives that have been instrumental in driving the company towards achieving significant impacts in environmental sustainability and financial inclusion.

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