Guidelines to get Subsidy on Solar PV Systems and Solar Water Pumps for 2015

MNRE has revised its guidelines for procuring subsidy from NABARD for Solar PV systems and Solar Water Pumps in May 2014, below are few highlights from the revised guidelines
Eligibility

• Only individuals, SHGs, NGOs and Farmer Groups are eligible under this scheme

Subsidy Percentage – Maximum available subsidy is ₹108/Wp

• 40% Subsidy for systems up-to 300Wp
•  30% subsidy for systems from 300Wp to 1KWp
• 40% Subsidy for solar water pumping systems up-to 5KWp

Loan and Margin Money

• 10% of system cost has to be paid as margin money
• Remaining 50% cost of the system can be financed from the bank at an on-going interest rate for up-to a term of 5 years

Benchmark Costs

• Benchmarks costs for 2014 is ₹270/Wp and Subsidy is ₹108/Wp

Procedure 

• Submit an application to procure a loan for Solar home lighting system/Solar water pumping available from NABARD at your local bank
• After your loan application is approved, you would have to deposit 10% of the margin money, depending on the size of your solar system/solar water pumping system
• Your Bank Manager forwards your application to an approved Vendor/Channel Partner
• Channel Partner completes the installation process
• Bank Manager/Field Officer inspects your installation to ensure that only MNRE approved components are installed
• Your application will be sent to NABARD to release the subsidy amount
• After Subsidy amount is released from NABARD, Bank keeps the subsidy amount as a collateral towards your loan
• If you default on the loan, you will not be eligible for subsidy amount, you will be responsible for repaying entire loan amount for your system

Practical Issues
As you are aware there are several practical issues involved in getting your loan application approved, your system installed and your subsidy application is submitted/approved and subsidy amount procured from NABARD, below are few practical issues and solutions to circumvent those issues
Local Bank
If you are living in an urban or semi-urban area, your local bank manager might not respond favorably to your request for solar loan, most urban and semi-urban banks are overloaded and they would not be interested in processing your loan application for following reasons

• Your local bank is not aware of the procedure involved in processing your solar loan application under NABARD Scheme
• Your local bank is not sure if they would be able to get your subsidy approved from NABARD
• Your local bank is not interested in processing solar loans as there is a lot of paperwork involved and there is no incentive for the banks to process your loan
• Your local bank does not have any directive from their regional or corporate office to offer solar loans
• Your local bank does know/have any NABARD approved vendors to install these solar systems

Solution

• Reach out to other interested parties in your area who are interested in these solar systems
• Form a group of 10 to 15 interested parties approach your bank as a group
• Reach out to one of the approved vendors/manufactures and let them know that you have a big group of interested individuals
• Approved vendors will advice your local bank on the process involved and they will handle necessary paperwork

Authenticity of Vendors
There are several individuals and companies who claim to be authorised dealers and sub-dealers of NABARD approved manufacturers and you are not sure which of these individuals and companies are authentic
Solution
All NABARD approved manufactures provide a letter of approval to their authorized dealers for NABARD program, request a copy of approval letter from the individuals/companies
Warranty
NABARD program requires 25 years of warranty for Solar Panels and 5 years warranty balance of the system including solar inverter and batteries

• Ask for warranty cards for all the components including solar panels, inverter and batteries
• Ask these companies to provide references from their previous installations
• Make sure that these companies have significant local presence and make sure that they are not fly-by-night companies

Solar Plant Capacity
You are not sure about solar plant capacity that you need to install to support your usage
You want to become a dealer
You are interested in becoming a dealer for installing solar systems as there are no companies in your area offering these services
Solution
Most NABARD approved manufacturers have their dealer network through out the country, select a manufacturer whose dealer network is the strongest in your area, approach the local dealer and express your interest in becoming a sub-dealer, ask the dealer to provide you with necessary training on the solar products and technology

• Build a team of electricians and get them trained on how to install and wire solar panels, inverter and battery banks
• Rent a physical location and offer a service point and post installation support for up-to 5 years

 Important Links
MNRE approved manufacturers for NABARD subsidy scheme

• List of MNRE approved Solar Panel Manufacturers for NABARD – List I
• List of MNRE approved Solar Panel Manufacturers for NABARD – List II