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					</table>As India accelerates its clean energy goals, financing has become a critical enabler for commercial and industrial (C&amp;I) entities adopting solar. Structured funding options, ranging from MSME-focused bank loans to lease-based and turnkey financing, are making solar adoption more accessible and cost-effective.
At the recent C&amp;I Clean Energy Meet hosted by Mercom India in Mumbai, leading financial services companies and solar solution providers came together to share details on obtaining green loans for rooftop and captive open-access solar systems. The panel discussion featured representatives from SIDBI, Siemens Financial Services, IDBI Bank, Credit Fair, and Oorjan Cleantech.
Loan Products 
Sheetal Sherke, Deputy General Manager, <a href="https://www.sidbi.in/en/" target="_blank" rel="noopener">SIDBI</a>, said the bank has two dedicated programs for clean energy financing—the End-to-End Energy Efficiency (4E) and the Green Finance programs.
“Both are aimed at MSMEs. Applicants can submit documents online. The 4E program offers up to ₹150 million (~$1.75 million), while Green Finance is available up to ₹500 million (~$5.84 million),” said Sherke.
Poonam Pawar, AGM Asset, <a href="https://www.idbibank.in/" target="_blank" rel="noopener">IDBI Bank</a>, spoke about the IDBI’s dedicated offering under the “IDBI Surya Shakti” program tailored for farmers, as well as commercial and industrial units. “We prioritize clients who have maintained a consistent relationship with the bank over the last two to three years,” she added.
<a href="https://www.siemens.com/in/en/company/about/businesses/financial-services.html" target="_blank" rel="noopener">Siemens Financial Services</a> has expanded its financial services arm in India over the past 14 years. Abhay Dixit, Vice President of Business Development Siemens Financial Services, stated that the company offers loans and leasing models tailored for solar and clean energy projects. “We offer rental-based solutions that don’t require collateral or no objection certificates (NOCs) from existing banks. These products allow clients to retain their working capital lines,” he explained.
Gautam Das, CEO of <a href="https://www.oorjan.com/home" target="_blank" rel="noopener">Oorjan Cleantech</a>, outlined the company’s comprehensive turnkey model: “We provide full-cycle project execution from land acquisition and engineering to funding and maintenance. Our financial offerings include loans, leases, and PPAs with buyout options.”
Vikas Aggarwal, CEO of <a href="https://www.creditfair.in/" target="_blank" rel="noopener">Credit Fair</a>, said Credit Fair focuses on small commercial and residential rooftop solar projects. He said, “We have already financed over 9,000 rooftop systems, amounting to around 16 MW of capacity across India. Applications are processed digitally through our EPC partners.”
Interest Rates and Loan Tenure
SIDBI offers loans at interest rates ranging from 8.75% to 10%. The 4E program’s repayment period is up to seven years with a 12-month moratorium. The Green Finance program offers repayment terms of up to 10 years. “We calculate ratings internally, based on GST data, CIBIL scores, and borrower history,” said Sherke.
Siemens Financial Services does not offer standard interest rates for all clients but provides monthly rentals based on the project, down payment, and tenure. Dixit said, “We are a triple-rated company and offer competitive rentals tailored to each client. We usually see tenures between 4 and 5 years, but can extend this if necessary.”
Oorjan’s Das clarified how the cost of capital impacts interest rates. He said, “If you’re taking loans from a large NBFC with a Triple-B-Plus or better rating, you can expect interest rates below 10%. But small NBFCs often lend at 14–15% due to the higher cost of funds.”  Financial leasing with depreciation and GST set-offs for high-quality projects can lower the effective cost.
Pawar said the IDBI Bank offers rates ranging between 9.10% and 13.84%, depending on project appraisal and credit rating. The tenure extends from seven to ten years.
Credit Fair’s rates are higher, with unsecured loans priced between 12% to 14% and 15% to 18% on a reducing balance basis. “Our tenure is typically two to three years, especially after accelerated depreciation benefits,” said Aggarwal.
Siemens also provides a customized strategy. Dixit said the company aligns its internal ratings with available external scores and creates bespoke financing solutions without relying on the client’s primary banking limits.
Collateral and Credit Rating Mechanisms
Collateral requirements and credit evaluation processes vary among the participating organizations.
Siemens’ leasing model offers financing without needing collateral or NOCs. “The equipment acts as the asset, and the repayments come through rental structures. It’s tax-efficient and avoids interfering with banking limits,” said Dixit.
Oorjan uses lease and PPA models, which allow depreciation and GST benefits to be passed on to the customer. “You can save 30% on capital deployed if structured correctly. Even if a customer doesn’t want to buy the asset immediately, our model allows test-and-buy later,” explained Das.
IDBI Bank assesses credit ratings as part of project appraisal and determines collateral requirements based on the proposal’s size and scope.
Credit Fair uses only internal credit evaluations. It relies on cash flow analysis and business viability. “Loans up to ₹5 million (~$58,400) are unsecured,” said Agarwal.
Advice for C&amp;I Units Considering Solar
Experts strongly encouraged MSMEs to adopt renewable energy solutions, particularly solar power, citing its financial and environmental benefits. Sherke recommended rooftop and ground-mounted solar systems, noting that energy cost becomes almost negligible after four to five years, and added that early repayment penalties could be up to 3% plus GST.
Dixit emphasized the cost-effectiveness of lease models over equity, explaining that lease-based financing allows businesses to preserve their banking limits. He also stressed the importance of involving EPC partners early for integrated engineering and financing.
Das pointed out that delayed decision-making hinders progress despite the clear 30% return on capital from solar investments, urging partner-financed and pay-as-you-go models that minimize risk for businesses.
Aggarwal urged immediate action, especially in states like Maharashtra, which are experiencing rising electricity tariffs, stating that rooftop solar energy is key to cost control and decarbonization.
The financial companies emphasized that while the financing landscape for green energy is diverse, businesses must choose partners and models that align with their operational needs and fiscal capacity. With flexible loan products, digital processing, and evolving lease and PPA structures, adopting renewable energy is becoming easier and more efficient for India’s C&amp;I sector.
The next Mercom India C&amp;I Clean Energy Meet event will be held in <a href="https://www.mercomindia.com/event/c-and-i-clean-energy-meet-2025-pune" target="_blank" rel="noopener">Pune</a> on May 16, 2025.
At the last C&amp;I Clean Energy Meet hosted by Mercom in Chennai on March 7, 2025, industry experts from leading financial institutions <a href="https://www.mercomindia.com/attractive-financing-options-rooftop-solar" target="_blank" rel="noopener">discussed</a> multiple lending options, loan structures, and interest rates available for businesses investing in solar energy.
<a href="https://www.mercomindia.com/lead-generation-form" target="_blank" rel="noopener">Contact us</a> if you plan to install solar and need guidance or vendor recommendations.

A Guide to Solar Financing Options for MSMEs at Competitive Lending Rates

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					</table>As businesses increasingly transition toward clean energy, financing options for solar projects have become a crucial discussion topic. At the recent C&amp;I Clean Energy Meet hosted by Mercom in Chennai, industry experts from leading financial institutions discussed multiple lending options, loan structures, and interest rates available for businesses investing in solar energy.
Several financial institutions, including the Small Industries Development Bank of India (<a href="https://www.sidbi.in/en/" target="_blank" rel="noopener">SIDBI</a>), <a href="https://www.idbibank.in/" target="_blank" rel="noopener">IDBI Bank</a>, and the <a href="https://bankofmaharashtra.in/" target="_blank" rel="noopener">Bank of Maharashtra</a>, outlined their diverse lending products tailored for solar and other renewable energy initiatives at the event.
Anburaj C, Deputy General Manager, SIDBI, explained that SIDBI offers loans to micro, small, and medium enterprises (MSMEs) with minimal documentation requirements. Using digital processing, borrowers with a three-year balance sheet can avail of loans up to ₹20 million (~$229,301) within 30 minutes. “Loans exceeding this amount follow a slightly extended but simple approval process, typically completed within seven to ten days. Approvals for smaller loans up to ₹3 lakh (~$3,439) can be completed at the branch level in four days,” he said.
Chandramohan S, Assistant General Manager, IDBI Bank, highlighted that IDBI has financed project-based green energy initiatives, including large-scale solar projects. Recently, IDBI extended ₹1.5 billion (~$17.19 million) to a corporate entity for a clean energy project.
S. Sridhar, Chief Manager at the Bank of Maharashtra noted the bank finances rooftop solar installations and offers specialized loan products for MSMEs, solar engineering, procurement, construction companies, and manufacturers. The bank’s Mahaswagatham program provides loans ranging from ₹50 million (~$573,252) to ₹100 million (~$1.14 million) at competitive interest rates.
Interest rates for solar financing are becoming increasingly competitive to make green investments more viable for businesses. Bank of Maharashtra offers interest rates starting at 6.8% for loans up to ₹300,000 (~$3,439) for 3 kW projects and 10.05% for loans above ₹300,000 (~$3,439).
SIDBI offers an interest rate reduction of 25 basis points for green energy projects, bringing their standard rates to between 8.7% and 9.4%. Government subsidies play a significant role in reducing borrowing costs for green energy projects. SIDBI’s Green Investment and Financing for Transformation (GIFT) program provides a 2% interest subvention for micro and small enterprises investing in rooftop solar to reduce interest rates further. This subvention applies to investments of up to ₹20 million (~$229,301) to make financing more attractive for small businesses.
IDBI Bank’s interest rates range from 8.5% to 10%, depending on internal and external credit ratings. IDBI follows internal credit ratings for loans below ₹250 million (~$2.86 million), while loans above this amount require an external credit rating with a minimum threshold of BBB (lower-medium-grade credit rating).
SIDBI is also a nodal agency for the Tamil Nadu Government’s interest subvention program, which provides back-ended interest subsidies for businesses investing in energy-efficient machinery.
Banks have streamlined their loan processing systems, making them faster and more accessible. SIDBI operates a fully digital, end-to-end loan process, enabling MSMEs to apply online and receive sanctions without visiting a branch. Bank of Maharashtra allows customers to apply via government portals such as Surya Ghar and Jan Samarth, reducing approval times to a minimum of seven days for rooftop solar financing.
IDBI Bank follows a similar process but with a turnaround of fifteen days for corporate loans due to additional due diligence requirements. IDBI and other banks conduct thorough credit evaluations, with due diligence reports and financial scoring playing a critical role in determining eligibility and interest rates. While SIDBI does not require a project report for existing companies, larger projects may require a techno-economic viability report to assess financial feasibility.
Collateral-free loans are now available through various government and bank-backed programs. SIDBI provides collateral-free loans up to ₹100 million (~$1.14 million) under the Credit Guarantee Program. Its Mutual Credit Guarantee Program extends collateral-free lending up to ₹1 billion (~$11.46 million).
Credit rating considerations vary across institutions. Bank of Maharashtra relies on the Credit Information Bureau of India (CIBIL) scores, with a minimum threshold of 680. However, loans below this score are assessed on a case-by-case basis. IDBI Bank requires an external credit rating for loans above ₹250 million (~$2.86 million), while loans below this amount follow internal rating parameters. SIDBI does not require external ratings but evaluates management strength, financial health, and industry factors for risk assessment.
Experts at the event strongly encouraged businesses to invest in solar energy to reduce operating costs. Many industries, especially in power-intensive sectors such as textiles, have successfully lowered operating expenses by transitioning to solar. Chandramohan shared an example of a textile company that had previously invested in wind energy but recently installed rooftop solar for its captive consumption to further reduce energy expenses. The company’s management recognized that profit margins were shrinking due to rising raw material costs, making solar a strategic move to cut operating expenses.
Experts also advised businesses to approach banks directly rather than relying on intermediaries to ensure transparency and avoid unnecessary costs. They warned that intermediaries could increase costs and delay financing, making it more beneficial for businesses to apply directly through digital platforms or visit bank branches for assistance. Bank of Maharashtra has 2,500 branches across India, allowing for faster approvals at the local level, with some loans being sanctioned at the branch manager’s discretion.
The discussions underscored how financial institutions increasingly prioritize clean energy investments, making funding more accessible for businesses. With low interest rates, government-backed subsidies, and streamlined digital processing, there has never been a better time for MSMEs and corporates to invest in solar energy. By adopting solar power, businesses can cut electricity costs and benefit from going green.
The next Mercom India C&amp;I Clean Energy Meet event will be held in <a href="https://www.mercomindia.com/event/c-and-i-clean-energy-meet-2025-mumbai" target="_blank" rel="noopener">Mumbai </a>on April 17, 2025.
<a href="mailto:sales@mercomindia.com?subject=Seeking%20Solar%20Installation%20Guidance%20and%20Vendor%20Recommendations%20for%20Business" target="_blank" rel="noopener">Contact us</a> if you plan to install solar and need guidance or vendor recommendations.

Attractive Financing Options for C&I Rooftop Solar with Rates as Low as 6.8%

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