Are you thinking about switching to solar energy but are worried about how much it would cost at first? You’re not the only one. If you own a home or a solar business and want to use the power of the sun without spending a lot of money, the good news is that there are several types of financing that have been made just for this purpose.
In this blog, we’ll talk about the basics of solar financing models, breaking down how each one works and looking at what makes them different from each other. In the end, you’ll know more about how to pay for your solar journey in a way that works with your budget and your goals. Why solar makes financial sense in India today electricity bills in India rarely go down. Whether it’s a household running acs in summer or a factory operating heavy machinery, energy costs keep rising year after year.
Solar offers a way out. Instead of paying the utility company every month; you generate your own electricity. And with financing models available, you don’t have to block your savings to make that switch.
The government is also working hard to get people to use solar electricity on their roofs. The Prime Minister’s Surya Ghar Yojana initiative gives families the chance to earn subsidies of up to ₹78,000 and even access to acceptable financing choices. This makes solar energy much cheaper than it used to be. So, the question that needs to be posed is no longer “Can I afford solar?” The question is, “Which model works best for me?” two distinct ways to look about paying for solar energy. In India, solar financing broadly falls into two categories:
1. You own the system (capex / loans). You either pay upfront or take a loan and own the solar setup.
2. Someone else owns it (opex / ppa / leasing). A third party installs and manages the system—you just use the electricity. Each has its own advantages depending on your financial situation and long-term plans.
Option 1: Direct Ownership (Capex & Loans) or Paying Upfront (Capex Model)
This is the simplest approach—you pay for the system and own it completely. At first glance, it may feel expensive. But in India, subsidies significantly reduce the cost.
For Residential Users
Up to 40% subsidy for smaller systems (up to 3 kw). Direct benefit transfer into your bank account after installation. In states like Gujarat, additional state subsidies can further reduce the cost, sometimes bringing down the effective investment dramatically.
al situation and long-term plans.
Why people still choose capex?
- Maximum long-term savings
- No dependency on third parties
- Full benefit of net metering (earn from extra power)
- Faster payback due to subsidies
If you have the funds available, this is often the most rewarding option financially. Solar loans (emi-based ownership). Not everyone wants to pay upfront—and that’s where solar loans come in. Banks in India now offer low-interest solar loans, especially under government-backed schemes. In some cases, financing can cover a large portion of the installation cost. The interesting part? Your emi is often close to (or even less than) your electricity bill savings. So instead of paying the power company, you’re gradually paying off an asset you own.
Why loans are popular?
- Low upfront investment
- Ownership benefits remain
- Subsidies still apply
- Easy entry into solar for many middle-class households and small businesses, this is the most practical route.
Option 2: Third-Party Ownership (Opex Models)
Now let’s talk about options where you don’t own the system. This is especially common in commercial and industrial setups. Power purchase agreement (ppa). In this model, a developer installs the solar system at your premises, and you simply buy the electricity it produces. Usually, the rate is lower than your current electricity tariff.
Why this approach is effective in India
- No initial capital outlay is required.
- You start saving money right away
- Forget about maintenance problems
Long-term tariff stability is a key selling point, particularly for factories, warehouses, and office buildings that consume a lot of energy.
Solar leasing is a slightly different model. Rather than paying for every kilowatt-hour you consume, you simply pay a fixed monthly fee to access the system.
Benefits
- Predictable monthly expense
- No maintenance responsibility
- No capital investment trade-off
Savings may be slightly lower than ppa or ownership. Still, for businesses that prefer stable, predictable costs, leasing is a comfortable option. Opex / resco model (for businesses) this is widely used in India’s commercial and industrial sector.
A third-party company: installs the system operates it, maintains it, you just pay for the electricity consumed.the system.
Why industries prefer this?
- Zero capital investment
- No operational risk energy cost reduction from day one with electricity being a major operational cost, even a small reduction per unit can significantly impact profitability. The role of net metering in India one of the biggest advantages of going solar in India is net metering.
Here’s how it works:
If your system produces more electricity than you use, the extra is sent to the grid
you get credits or compensation for that energy most Indian states now support net metering, allowing users to carry forward credits and settle them annually. In simple terms, your electricity meter can run “backwards”—reducing your bill even further.
What about businesses? (extra benefits)
For commercial and industrial users, there’s an additional financial advantage:
accelerated depreciation businesses can claim depreciation benefits on solar assets, reducing taxable income. This makes ownership models (capex) even more attractive for companies with long-term plans.
On top of that: some states offer waivers on charges or incentives open access policies allow sourcing solar from remote locations all of this improves the overall return on investment.
Government push: why solar is growing fast?
India is actively promoting rooftop solar adoption. The pm surya ghar scheme aims to install solar systems in millions of homes and reduce dependence on traditional power sources.
The idea is easy. Less stress on the grid, lower electricity prices for customers, and a quicker switch to clean energy. This effort is one of the key reasons why solar finance solutions are now more versatile and easier to find.
So, which model should you choose? There’s no one-size-fits-all answer but here’s a simple way to think about it. Go for capex (full ownership) if you have funds available.you want maximum long-term savings. You plan to stay in the same location for years choose loans if:
- You want ownership without upfront cost
- You’re comfortable with emis
Choose ppa / opex if:
- You don’t want to invest capital
- You prefer a hands-off approach
- You want immediate savings
Choose leasing if you want predictable monthly costs & you value simplicity over maximum returns. A small but important reality check while solar financing makes things easier, it’s still important to evaluate:
- Your monthly electricity consumption
- Available rooftop space
- Local discom policies
- Installer credibility. A good installer and proper system sizing matter just as much as the financing model.
Final thoughts
Solar in India has quietly shifted from being an expensive upgrade to a practical financial decision. With solar subsidies, financing options and supportive policies in place, the barrier to entry is lower than ever and perhaps the biggest change is this. You don’t need to think of solar as a cost anymore. It’s an asset.
It doesn’t matter if you own it or just use it through a third-party model; the result is the same: cheaper bills, improved control over energy expenses, and savings over time. The only choice you have left is whatever path to take that is best for you.
Stay ahead in the solar revolution—connect with Vishakha Renewables for the latest insights, innovations, and industry updates.
Vishakha Renewables is one of India’s leading solar materials manufacturers, known for its high-quality EVA encapsulants, solar frame, solar glass and solar backsheets. With a strong focus on innovation, sustainability, and advanced manufacturing, the company plays a key role in powering India’s clean energy transition.