Solar Project Loan in India: Rooftop and Open Access Plants

On 2 November 2026, the Prime Minister opened the Bharat Renewable Energy Summit and Expo in New Delhi. The numbers shared there were large: India's solar capacity has grown from 2.8 GW to 171 GW in twelve years, according to the Minister for New and Renewable Energy. For a factory owner, a warehouse operator or a commercial building owner, the more useful number is closer to home: a date. Net-metering and open access solar projects that are commissioned on or before 31 December 2026 can still use solar cells that are not on the government's ALMM List-II. From 1 January 2027, they cannot.

That leaves about eight weeks for businesses planning a rooftop or open access plant this year. Many of these plants are funded with a loan, so the deadline is also a financing question. This guide explains how solar plant loans work for businesses in India, how lenders size and secure them, where RBI's priority sector rules fit, and what the ALMM cut-off means for your timeline and budget.

Solar project loan: the short answer

A solar project loan for a business is usually one of two things. For a plant on your own roof or land that supplies your own premises, it is a term loan to your company, assessed on your company's cash flow and balance sheet, with the plant as security. For a larger plant built in a separate company (a special purpose vehicle, or SPV) that sells or wheels power to one or more users, it is project finance, assessed mainly on the plant's own contracted cash flows.

	Captive rooftop or ground plant (company balance sheet)	Open access or group captive plant (SPV)
Typical user	A factory, warehouse, hospital, hotel or commercial building using the power on site	One or more businesses buying power from a plant located elsewhere, through the grid
Borrower	Your operating company	A project company set up for the plant
Main repayment source	Your business cash flow, helped by lower electricity bills	Payments from the power buyers under a long-term agreement
What the lender studies	Your financials, existing debt, power bills and the plant's generation estimate	The power purchase agreement, the buyer's credit quality, generation estimates, grid approvals and open access charges
Security	The plant, plus your usual business security	The plant and its land rights, the project's accounts and contracts, often with sponsor support
Product on our site	Capex finance	Project finance

Each lender sets its own loan amount, margin, tenor and rate after its own credit assessment. None of the figures in this guide are loan terms.

Why the ALMM deadline matters for your solar plan

ALMM stands for the Approved List of Models and Manufacturers, kept by the Ministry of New and Renewable Energy (MNRE). List-I covers solar modules. List-II covers solar cells, the parts inside the module.

MNRE extended a limited exemption from ALMM List-II for net-metering and open access renewable energy projects, so that such projects commissioned up to 31 December 2026 can use solar cells not on List-II, according to its PIB release of 18 July 2026. Earlier, that window had been due to end on 31 May 2026. The same release said there would be no change in the ALMM policy itself and no blanket extension for solar projects in general. Module sourcing from List-I continues to apply.

What it means in practice:

• Commissioning date is what counts. The test is when the plant is commissioned, not when you sign the order or draw the loan. A plant that is half built on 31 December 2026 does not benefit.
• From 1 January 2027, cells must come from List-II makers. Your engineering, procurement and construction (EPC) contractor will need to quote modules that use List-II cells. Ask for both quotes now and compare.
• Lenders read the same calendar. If your plan relies on the exemption, a lender will want an EPC schedule, a module delivery date and a realistic commissioning date before it sanctions. A tight date with no buffer is a risk in its eyes, not just yours.
• Scheme rules are separate. The exemption does not change any domestic content rule that a government scheme or tender imposes. Check the conditions of any subsidy or scheme you plan to use.

We have not found any MNRE notice extending the window beyond 31 December 2026 as of 3 November 2026. Check the latest position with your EPC contractor before you commit.

How lenders look at a captive rooftop plant

For a rooftop plant that supplies your own premises, a lender treats the loan much like any other capex loan. It starts with your business: revenue, profit, existing borrowings and repayment record. The plant adds a second layer of analysis.

• Generation estimate. How many units the plant will produce each year, usually from the EPC contractor's design report. Lenders tend to discount optimistic estimates.
• Savings. Units you will use on site multiplied by the grid tariff you will avoid, less operation and maintenance cost. Your last 12 months of power bills are the starting point.
• Roof and site. Ownership or lease of the roof, the structure's condition and the remaining lease period. A lease that ends before the loan does is a problem.
• Approvals. Net-metering or grid connectivity approval from your distribution company (DISCOM), and any state approval needed. Net-metering limits are set by central rules and your state regulator, so confirm them with your DISCOM for your connection.
• Your contribution. Lenders usually ask the business to fund part of the cost from its own money. The share varies by lender and profile.

Most lenders will also look at how the loan fits with your current working capital limits and term loans. Our guides to DSCR and working capital vs term loans explain the ratios they use.

How lenders look at an open access or group captive plant

A plant built away from your premises and connected through the grid is a different structure. Under the Green Energy Open Access Rules, as amended in May 2023, a consumer with a contracted demand or sanctioned load of 100 kW or more, through one connection or several in the same DISCOM electricity division, can buy green power through open access. Captive consumers have no load limit.

Many such plants are built as group captive projects. Under rule 3 of the Electricity Rules, 2005, a plant qualifies as captive only if captive users hold at least 26% of its ownership and consume at least 51% of the electricity it generates, determined on an annual basis. Captive status matters because it affects the open access charges the users pay, so lenders check it closely.

For these projects, the lender looks mainly at the plant's own economics:

1. The power agreement. Tenor, tariff, lock-in, exit terms and who bears the risk of changes in charges.
2. The buyers. Their credit quality and payment record. A strong plant with weak buyers is a weak loan.
3. Generation and grid risk. Independent generation estimates, connectivity approval, curtailment history in the area and open access charges.
4. Cash flow cover. Projected debt service coverage ratio across the loan's life, with a debt service reserve and a cash flow waterfall through a designated account.
5. Sponsor support. Equity committed up front and, often, support until the plant has run for a period.

Our guide to how lenders evaluate project finance proposals covers these tests in more detail.

Where priority sector lending fits

RBI's Priority Sector Lending (Targets and Classification) Directions, 2025, updated as on 11 September 2026, treat bank loans of up to ₹35 crore to borrowers for renewable energy-based power generators as priority sector lending. For individual households, the limit is ₹10 lakh per borrower.

Priority sector status matters because banks have priority sector targets to meet, so many banks actively look for eligible renewable energy loans. It does not, by itself, set your rate or guarantee approval. Each bank still runs its own credit assessment. The ₹35 crore limit applies to the loan per borrower, so very large plants may sit outside it. NBFCs are not bound by these targets, though some lend to the sector.

Worked examples

Example 1: a rooftop plant on your own factory

Illustrative example, assuming a 500 kW rooftop plant costing ₹50,000 per kW, generating 1,400 units per kW a year, replacing grid power at ₹8 per unit, with ₹3 lakh a year of maintenance and a 70% term loan at 10% a year over 7 years:

Item	Working	Amount
Plant cost	500 kW x ₹50,000	₹2.5 crore
Units a year	500 x 1,400	7 lakh units
Bill savings a year	7 lakh x ₹8	₹56 lakh
Net savings after maintenance	₹56 lakh less ₹3 lakh	₹53 lakh
Loan (70%) and own contribution (30%)		₹1.75 crore and ₹75 lakh
Monthly instalment	84 months at 10% a year	about ₹2,90,521
Annual debt service	x 12	about ₹34.86 lakh
Net savings over annual debt service	₹53 lakh / ₹34.86 lakh	about 1.52 times

In this example, the savings alone cover the instalments about 1.52 times, and the simple payback on the plant cost is about 4.7 years. A lender would still assess your whole business, not just the savings, because the savings depend on the factory running and using the power.

Example 2: what a missed deadline could do to the same plant

Illustrative example, assuming the same plant commissions after 31 December 2026 and the List-II-compliant quote is ₹10 lakh higher, with the same 70% loan, rate and tenor:

Item	Before	After
Plant cost	₹2.5 crore	₹2.6 crore
Loan (70%)	₹1.75 crore	₹1.82 crore
Own contribution (30%)	₹75 lakh	₹78 lakh
Monthly instalment	about ₹2,90,521	about ₹3,02,142
Net savings over annual debt service	about 1.52 times	about 1.46 times

The ₹10 lakh figure is an assumption, not a market estimate. Ask your EPC contractor for both quotes. The point is that the date moves your cost, your loan size and your own contribution, so build the commissioning plan and the loan application together.

Example 3: an open access plant in an SPV

Illustrative example, assuming a 5 MW open access plant costing ₹4 crore per MW and funded 75% by debt: the plant costs ₹20 crore and the loan is ₹15 crore. A bank loan of that size is within the ₹35 crore priority sector limit for renewable energy generators. The lender will still size the loan on the power agreement, the buyers and the projected cash flow cover.

A checklist before you approach lenders

1. Last 12 months of power bills for every connection the plant will serve.
2. EPC proposal and design report with the generation estimate, module and cell make, and a dated commissioning schedule.
3. Roof or land documents: ownership, or a lease longer than the loan.
4. DISCOM approvals for net-metering or connectivity, or the application status.
5. For open access or group captive: draft power agreement, buyer details and the ownership structure of the SPV.
6. Financials: three years of audited accounts, current year provisional figures, and your existing loan schedule.
7. Two EPC quotes if there is any chance of missing 31 December 2026: one with exempt cells and one with List-II cells.

How MoneyKarma helps

MoneyKarma is a loan distribution platform for Indian businesses and real estate developers, with 90+ lenders. Not a lender. We help businesses compare solar plant funding through capex finance and project finance structures from public sector banks, private banks, NBFCs and financial institutions, including loan amount, own contribution, tenor and security. Every credit decision, limit and rate is set by the lender. Our team responds within 24 hours on average, with ₹2,500+ Cr facilitated to date. Apply here to start.

This guide is general information, not financial, legal, tax or technical advice. Rules are as notified or announced up to 3 November 2026. Illustrative examples are not loan offers. Confirm current rules with MNRE, your DISCOM and your state regulator, and current terms with your lender.