Solar loans in 2026: PM Surya Ghar bank loans and EMIs explained

A home rooftop system is a large payment made once, while the saving arrives a little each month. A loan lets the two line up. Under PM Surya Ghar, public sector banks offer rooftop solar loans at rates well below an ordinary personal loan, and the subsidy then pays part of the loan back. This guide explains how the loans work in 2026, with an EMI example for a typical home in Mohali or Zirakpur.

How PM Surya Ghar loans work

Banks lend for home rooftop solar in two bands. These are the terms on SBI’s and Indian Bank’s own scheme pages in October 2026:

The rates are floating. The RBI raised the repo rate to 5.50% on 7 October 2026, and SBI’s rates rose on 15 October. Each bank sets its own terms, so get the rate and your share of the cost in writing from your bank.

An EMI example for a 3 kW home

Take a 3 kW system with DCR panels costing ₹1.8 lakh including GST.

• Your payment: 10%, or ₹18,000
• Loan: ₹1.62 lakh at 6.00% for 10 years
• EMI: about ₹1,800 a month

After the system is commissioned, the subsidy of ₹78,000 goes against the loan. SBI requires it to be credited to the loan account. That brings the balance down to about ₹84,000. If the bank keeps the ten-year term, the EMI falls to about ₹930 a month. If it keeps the EMI, the loan is paid off in about four and a half years.

SBI and Indian Bank charge no penalty for paying the loan off early, and RBI rules bar prepayment penalties on floating-rate loans to individuals for non-business purposes.

Is the EMI covered by the saving?

That depends on your bills. In Punjab, a home within the 300 free units already pays no energy charges, so solar saves mainly in the summer months, when the bill crosses the limit. A home paying ₹3,000 a month in summer energy charges and little in winter saves most of its year’s money between May and September.

So compare the EMI with your yearly saving, not your June saving. Our savings calculator gives the yearly figure from your bills, and our guide to whether solar is worth it with the 300 free units explains the pattern.

Documents banks ask for

SBI’s list is typical:

• KYC documents. PAN is required for loans above ₹2 lakh
• Proof that you have the right to use the roof
• Income proof for loans above ₹2 lakh: salary slips or Form 16, pension slips, or two years’ income tax returns
• From the vendor: the quotation or invoice, the site feasibility report and the vendor’s agreement with you

SBI does not ask for a paper electricity bill, because the connection details come from your registration on the national portal. The subsidy is paid in the name on the electricity connection, so the loan, the connection and the bank account should all be in the same name.

How to apply

1. Register on the PM Surya Ghar portal and get a quotation from a registered vendor.
2. Apply for the loan on the government’s Jan Samarth portal, or on your bank’s website.
3. Wait for sanction, then the electricity board’s feasibility approval for the system.
4. Installation. The bank pays the vendor directly.
5. Commissioning and subsidy. Once the net meter is fitted, the subsidy goes against the loan.

Our step-by-step subsidy guide covers the portal side of the application.

Larger homes and businesses

Above 3 kW, the loan carries the bank’s own rate: 8.15% at SBI from 15 October 2026, and the home-loan rate at Indian Bank. For a kothi needing 8 to 10 kW, compare the bank’s offer with paying partly upfront. Businesses do not get PM Surya Ghar loans or the subsidy, but banks lend for commercial rooftop solar as an ordinary business loan, and the system can usually be depreciated. Our commercial solar page covers the business side.

Common questions

What is the interest rate on a PM Surya Ghar solar loan?

For systems up to 3 kW, banks lend up to ₹2 lakh at the repo rate plus 0.5%, which is 6.00% a year at SBI from 15 October 2026. Loans of up to ₹6 lakh for systems above 3 kW carry the bank's own rate, 8.15% at SBI. Rates are floating, so confirm the current rate with your bank.

Can I use the subsidy to repay my solar loan?

Yes. SBI requires the subsidy to be credited to the loan account after commissioning, which cuts the balance straight away. There is no penalty for paying the loan off early.

Do I need collateral for a solar loan?

No. SBI and Indian Bank secure the loan on the solar system itself and ask for no other collateral. You pay at least 10% of the cost yourself.

Is a solar loan better than paying upfront?

If you have the money and no better use for it, paying upfront avoids interest altogether. The concessional PM Surya Ghar rate is low, though, so a loan makes sense if paying upfront would mean breaking a deposit earning more, or delaying solar by a year or more.