The 5.75% solar loan is not a fixed rate — it is the repo rate plus 50 basis points

Alongside the capital subsidy, PM Surya Ghar: Muft Bijli Yojana carries a financing arrangement that is easy to describe and frequently described wrongly.

The terms, as stated in Press Information Bureau material on the scheme, are:

• Collateral-free loans for installing residential rooftop solar
• Up to ₹2 lakh without collateral, guarantor or security
• At an interest rate of the repo rate plus 50 basis points, which works out to 5.75 per cent per annum
• Tenure of up to 10 years
• Applied for through the JanSamarth portal, integrated with the national PM Surya Ghar portal

Why "5.75%" is the wrong way to remember it

The rate is not a promotional number a bank chose. It is a formula: the Reserve Bank of India's repo rate, plus half a percentage point. At the repo rate prevailing when this was published, that formula produces 5.75 per cent.

If the repo rate moves, the rate on these loans moves with it. That is what a floating, externally benchmarked rate means, and it is the standard structure for retail lending linked to an external benchmark.

The practical implication is straightforward and worth stating because sales material rarely does: your EMI can change during the loan. A household budgeting on the assumption of a fixed 5.75 per cent for ten years is budgeting on something nobody promised. Over a ten-year tenure, the repo rate will almost certainly not sit still.

This is not an argument against the loan. At repo plus 50 basis points it remains substantially cheaper than an unsecured personal loan, and materially cheaper than most consumer finance a household would otherwise use for a capital purchase of this size. It is an argument for understanding what you are signing.

The collateral-free part is the real innovation

For a household, the more consequential term may not be the rate at all. A ₹2 lakh unsecured loan, without a guarantor and without pledging security, is unusual for a home improvement in India. It removes the step at which many rooftop projects previously stalled: the household that wanted solar, qualified for the subsidy, and could not raise the balance.

Because the subsidy arrives by Direct Benefit Transfer only after commissioning, the household has to fund the full cost first. The loan is designed to bridge exactly that gap.

Take-up so far

Public sector banks had sanctioned over 5 lakh loan applications amounting to ₹10,907 crore under the scheme, according to Press Information Bureau reporting.

Set against roughly 4.19 million installations reported as of 5 August 2026, that indicates a minority of installing households have used the scheme's own loan route. Most have funded the purchase another way. Whether that reflects households with the cash in hand, unfamiliarity with the product at branch level, or friction in the application is not something the published figures resolve.

What this means for a household

Ask the branch which benchmark your rate is linked to and what the current spread is. The scheme's stated formula is repo plus 50 basis points; individual banks publish their own rooftop solar products, and terms above ₹2 lakh are different.

Model the EMI at a higher rate than today's. If a one-percentage-point rise would make the EMI uncomfortable, borrow less or extend the tenure now rather than discovering it later.

Do not let the loan set the system size. A larger loan is easy to arrange and hard to unwind. The subsidy stops at 3 kW and your consumption is what justifies capacity — neither of those changes because more credit is available.

Apply through JanSamarth rather than through a vendor's finance partner unless you have compared the two. A vendor-arranged loan may be perfectly good; it may also be a different product at a different rate, and the comparison is yours to make.

Sources and references

Official government data.

• Press Information Bureau — "PM Surya Ghar: India's Solar Revolution", pib.gov.in. Source for the collateral-free loan terms, the repo-plus-50-basis-points formula, the 5.75 per cent figure and the 10-year tenure. Accessed 23 August 2026.
• Press Information Bureau — "Over 5 Lakh Loan Applications amounting to ₹10,907 crore Sanctioned by PSBs under PM Surya Ghar Muft Bijli Yojana", pib.gov.in. Accessed 23 August 2026.
• Akashvani News (Prasar Bharati) — "PSBs sanction over 5 lakh loans worth ₹10,907 crore under PM's Surya Ghar Muft Bijli Yojana", newsonair.gov.in. Source for the JanSamarth portal integration. Accessed 23 August 2026.

Independent trade reporting.

• Business Standard — installation figures as of 5 August 2026, 11 August 2026, business-standard.com. Accessed 23 August 2026.

A note on what is not stated here. Individual banks publish their own rooftop solar loan products with their own rates, spreads and terms above ₹2 lakh. This article deliberately does not list bank-by-bank rates: they change, and several widely circulated comparison tables originate from installers rather than from the lenders. Confirm terms with the bank.

ISB interpretation. The explanation of floating-rate risk over a ten-year tenure, the observation about loan take-up relative to installations, and the guidance in the final section are Indian Solar Bazar's own analysis.