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					</table><p>Financial institutions are offering micro, small, and medium enterprises (MSMEs) longer loan tenures, flexible repayment structures, and specialized financing products to support rooftop solar adoption and reduce upfront investment barriers.</p>
<p>However, lenders say weak financial discipline, missing regulatory approvals, and unrealistic project cost estimates can delay or affect loan approvals. They advise businesses to assess project viability, equipment costs, and repayment capacity before seeking financing.</p>
<p><strong>Rooftop Solar Financing</strong></p>
<p>Syed Farman Imam, AGM at Small Industries Development Bank of India (<a href="https://www.sidbi.in/en/" target="_blank" rel="noopener">SIDBI</a>), said the institution has supported green investments for more than two decades, initially through energy-efficiency financing for MSMEs. It has collaborated with institutions including KfW and the Japan International Cooperation Agency to provide concessional funding.</p>
<p>SIDBI offers financing covering 100% of rooftop solar project costs against a fixed deposit equivalent to 25%–30% of the project cost, which serves as the borrower&#8217;s contribution and security.</p>
<p>Imam said rooftop solar installations can generate electricity cost savings over time, helping businesses offset their investment.</p>
<p>MSMEs can apply for financing online or through SIDBI branches, with assistance available for digital applications.</p>
<p><strong>Longer Loan Tenures</strong></p>
<p>Rohit Kumar, Chief Manager at <a href="https://bankofmaharashtra.bank.in/" target="_blank" rel="noopener">Bank of Maharashtra</a>, informed that the bank offers repayment tenures of up to 20 years for eligible renewable energy projects, with extensions to 25 years possible in certain cases.</p>
<p>The bank also offers ballooning repayment structures, allowing borrowers to make smaller initial payments that increase over time as project savings materialize. Loan tenures must take into account the useful life of the assets.</p>
<p>The bank also finances eligible solar vendors, including those serving residential customers.</p>
<p><strong>Interest Rates and Credit Assessment</strong></p>
<p>Imam said SIDBI’s marginal cost of funds-based lending rate stood at 8.3%, with indicative lending rates ranging from 8.5% to 9.5%, depending on the borrower’s credit assessment.</p>
<p>Kumar said Bank of Maharashtra’s lending rates started at approximately 8.4% but could reach double digits for higher-risk borrowers. Final rates depend on individual credit profiles.</p>
<p><strong>Loan Approval Challenges</strong></p>
<p>Banks assess whether proposed equipment costs align with the selected technology and prevailing market benchmarks. They also evaluate suppliers and contractors, as poor project execution can affect system performance and repayment capacity.</p>
<p>Kumar advised businesses to consult lenders before finalizing detailed project reports, noting that both inflated and underestimated project costs can complicate financing.</p>
<p>He cautioned MSMEs against investing in solar projects solely because subsidies are available or neighboring businesses have adopted the technology. Instead, they should evaluate their electricity requirements, equipment quality, system efficiency, asset life, and ability to repay loans.</p>
<p>Imam encouraged MSMEs to identify their financing requirements and compare available lending products before selecting a lender..</p>
<p>Industry experts shared these insights at Mercom India’s recent C&amp;I Clean Energy Meet held in <a href="https://www.mercomindia.com/event/c-and-i-clean-energy-meet-2026-lucknow" target="_blank" rel="noopener">Lucknow</a>.</p>
<p>The next C&amp;I Clean Energy Meet will be held in <a href="https://www.mercomindia.com/event/c-and-i-clean-energy-meet-2026-pune" target="_blank" rel="noopener">Pune</a> in November 2026. Click <a href="https://www.mercomindia.com/event/c-and-i-clean-energy-meet-2026-pune/brochure" target="_blank" rel="noopener">here</a> to register.</p>


Banks Offer Longer Loan Tenures and Flexible Repayments for MSME Solar Projects


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					</table><p>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) has rejected a developer’s petition seeking extension of the start date of connectivity for a 700 MW solar power project in Maharashtra from March 31, 2026, to September 30, 2027.</p>
<p>The Commission held that the Connectivity and General Network Access (GNA) Regulations do not permit the postponement of the connectivity start date.</p>
<p>However, CERC granted limited relief on the project’s financial closure requirement after observing that the Central Transmission Utility of India (CTUIL) delayed issuing the final grant of connectivity by more than seven months following receipt of the required connectivity bank guarantees.</p>
<p><strong>Background</strong></p>
<p>The petitioner, Waaree Forever Energies, is developing the 700 MW Salgar Solar Power Project in Solapur, Maharashtra. The company originally applied for connectivity for a 1,000 MW solar project on September 17, 2024, under the Land Bank Guarantee route.</p>
<p>The application specified March 31, 2026, as the start date of connectivity and included commissioning schedules of 300 MW by March 31, 2026; 300 MW by September 30, 2026; and 400 MW by March 31, 2027.</p>
<p>On October 29, 2024, CTUIL informed the company that only 700 MW of capacity was available at Power Grid Corporation of India’s Solapur substation. The project capacity was subsequently reduced to 700 MW.</p>
<p>Waaree later requested that connectivity for the revised 700 MW project be arranged in two phases, with 300 MW to be connected from September 30, 2026, and 400 MW from March 31, 2027.</p>
<p>CTUIL issued the in-principle grant of connectivity on December 4, 2024, and the final grant of connectivity on August 28, 2025. Both grants specified March 31, 2026, as the start date of connectivity.</p>
<p>Waaree argued that the final grant was issued only one month before the financial closure deadline of September 30, 2025. It submitted that financial closure depended on factors including final connectivity approvals and power purchase agreements. It also cited delays in power sale arrangements across the renewable energy sector.</p>
<p>The company had acquired approximately 1,600 acres of land by February 2026, completed around 50% of the engineering drawings, mobilized its engineering, procurement, and construction contractor, and commenced civil and infrastructure works.</p>
<p>It had also issued a letter of award for EPC and power evacuation infrastructure works worth approximately ₹11.4 billion (~$120.58 million) and invested about ₹957.2 million (~$10.12 million) in the project while committing approximately ₹41.32 billion (~$437.04 million) toward its development.</p>
<p><strong>Commission’s Analysis</strong></p>
<p>CERC observed that under the GNA Regulations, financial closure must be achieved at least six months before the scheduled commercial operation date or the firm start date of connectivity, whichever is later.</p>
<p>It noted that Waaree’s connectivity application clearly specified March 31, 2026, as the start date of connectivity. It observed that the associated transmission system and augmentation requirements for the project were listed as “Nil,” leaving no basis under the regulations to postpone the connectivity date.</p>
<p>At the same time, CERC found that CTUIL did not adhere to the timeline prescribed under the regulations for issuing the final grant of connectivity. It noted that CTUIL received the required connectivity bank guarantees on January 2, 2025, and should have issued the final grant by January 17, 2025. Instead, the final grant was issued on August 28, 2025.</p>
<p>The Commission rejected CTUIL’s explanation that Waaree’s request to revise the connectivity date justified the delay, observing that the request was made after the deadline by which the final grant should have been issued.</p>
<p>CERC directed CTUIL to follow the GNA Regulations “in letter and spirit.”</p>
<p>As a relief measure, the Commission granted Waaree 30 days from the date of the order to submit financial closure documents for 300 MW of the project. If the documents are submitted after the initial 30-day period but within the following 60 days, delay charges equal to 5% of the connectivity bank guarantee amount on a pro rata basis for the 300 MW capacity will apply.</p>
<p>If the company fails to submit the documents within 90 days of the order, CTUIL will proceed under Regulation 11B(2) of the GNA Regulations.</p>
<p>For the remaining 400 MW capacity, the Commission noted that the financial closure deadline remains September 30, 2026.</p>
<p>Recently, CERC <a href="https://www.mercomindia.com/cerc-allows-withdrawal-of-grid-connectivity-request-for-250-mw-hybrid-project" target="_blank" rel="noopener">directed</a> CTUIL to process the application of a renewable energy project developer to withdraw connectivity for its proposed 250 MW wind-solar hybrid power project in Bidar, Karnataka.</p>
<p>Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates </a>to ensure you don’t miss any critical updates from the renewable industry.</p>


CERC Rejects Connectivity Extension for 700 MW Solar Project


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					</table><p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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).</p>
<p>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.</p>
<p>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).</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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).</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p><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.</p>


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

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