Eligibility and Documents for Applying for a Solar Loan

With rising electricity costs and growing environmental awareness, more individuals and businesses are turning to solar energy. However, the upfront cost of installing solar panels can be significant. That’s where a solar loan comes in—a financing option designed to make clean energy affordable and accessible. But before you apply, it’s essential to understand the eligibility criteria and required documents to ensure a smooth approval process.

In this blog, we’ll guide you through the key eligibility requirements and the documents you’ll need to apply for solar loan in India.

What is a Solar Loan?

A solar loan is a type of financing that helps individuals, housing societies, or businesses install rooftop solar systems. It enables you to spread the cost over monthly installments, making it easier to go green without a large upfront investment.

Banks, Non-Banking Financial Companies (NBFCs), and even specialized green financing institutions offer solar loans with competitive interest rates and flexible tenures.

Eligibility Criteria for Solar Loan

The exact eligibility conditions may vary slightly depending on the lender, but here are the common requirements:

1. Age

  • Applicants must be at least 21 years old at the time of application.
  • Maximum age at loan maturity is typically 65 years.

2. Employment/Income Source

  • Salaried individuals, self-employed professionals, business owners, farmers, and housing societies are generally eligible.
  • Regular and stable income is a must to ensure timely EMI payments.

3. Credit Score

  • A good credit score (usually 650 or above) improves your chances of approval.
  • Some green lenders may consider lower scores based on overall financial behavior.

4. Property Ownership

  • You must either own the property where the solar installation will be done or have legal occupancy rights.
  • In the case of joint properties, consent from co-owners may be required.

5. Location

  • The property should be within the serviceable area of the lender and suitable for solar panel installation.

Documents Required to Apply for a Solar Loan

The documentation process for a solar loan is relatively simple and can often be done online. Below are the standard documents you’ll need:

1. Identity Proof (any one)

  • Aadhaar Card
  • PAN Card
  • Voter ID
  • Passport
  • Driving License

2. Address Proof (any one)

  • Aadhaar Card
  • Utility Bill (electricity, water, etc.)
  • Rental agreement (if applicable)
  • Passport

3. Income Proof

For Salaried Individuals:

  • Last 3 months' salary slips
  • Bank statements (last 6 months)
  • Form 16 or Income Tax Return (ITR)

For Self-Employed:

  • ITR of last 2 years
  • Business proof (GST certificate, registration)
  • Bank statements (last 6 months)

4. Property Documents

  • Ownership proof or No Objection Certificate (NOC) from the landlord
  • Latest property tax receipt
  • Site photographs may also be required

5. Quotation for Solar System

  • A formal quote or proforma invoice from the solar vendor or EPC (Engineering, Procurement, and Construction) company detailing the system size, cost, and installation plan.

Final Thoughts

Installing a solar system is a long-term investment that pays off through reduced electricity bills and positive environmental impact. With various lenders offering specialized solar loans, financing your solar project has become more straightforward and accessible.