Due to the increasing trend towards renewable energy in India, solar power is becoming the favoured energy option for commercial and industrial energy usage. The government is promoting further aspects of sustainability and cost savings, which is leading commercial and industrial organisations across India to consider investing in solar.
However, it is often the financial element that is the most indicative and takes the lead. The guide provides a complete financial analysis of solar panel financing in India 2026, focusing on cost, financial models of financing, ROI of solar and all the options for industries available.
For Indian enterprises, energy expenditures typically represent substantial portion of their operating costs. Meanwhile, electricity prices from the grid continue to increase while solar energy can provide a affordable, stable and sustainable option for business energy needs. That said, the initial cost of solar panel installation in India can be expensive and therefore, financing options are becoming important.
Why financing matters in 2026:
Reduces upfront capital burden.
Allows companies to transition to renewable energy faster.
Offers predictable cash flow management.
Provides better ROI with tax benefits and subsidies.
Businesses in India, like any other place, have multiple solar financing options for businesses in India. All these depend on their budget, ownership preference, and long-term goals. Some of the leading models include:
Business pays the entire upfront cost.
Owns the solar system and enjoys tax incentives.
Best for companies with strong liquidity and long-term focus.
Higher ROI over the system’s life (usually 20–25 years).
No upfront investment.
Solar developer owns and maintains the system.
Business pays only for the electricity consumed (Power Purchase Agreement or PPA).
Ideal for businesses that want savings without ownership responsibilities.
Third party owns the solar system and leases it to the business.
Business pays fixed monthly/annual rental.
Lower financial risk compared to CapEx.
Many banks and NBFCs in India offer loans specifically for renewable projects.
Interest rates are competitive with longer repayment tenures.
Eligible for priority sector lending (PSL).
The prices of both rooftop and ground-mounted solar panels in India for commercial projects vary depending on several factors. These include the system size, region, and technology used by the contractor. However, the average prices in 2026 (rough estimates) are as follows:
Rooftop solar for industries: ₹35,000 – ₹45,000 per kW
Ground-mounted solar for large factories: ₹32,000 - ₹40,000 per kW
Utility-scale projects (greater than 1 MW) ₹30,000 - ₹38,000 per kW
There are other factors affecting prices:
Type of panel: Mono PERC, bifacial, thin film
Quality of inverters: string inverters vs. central inverters
Type of structure and installation: rooftop vs. ground-mounted
Location: if it is in a state where there are solar policies, and net metering is available
Project scale: larger projects reduce costs due to economies of scale
Additional costs:
There are ongoing costs for
Operation and Maintenance (O&M)
Insurance costs for solar assets
Evacuation costs for larger projects
For a moderate sized industrial plant installing a rooftop solar system of 500 kW in 2026, the investment may be in the range of ₹1.7–2.2 crore.
For Indian businesses, calculating the ROI of solar panels is essential to justify the investment. In 2026, solar energy stands out as a top-performing asset due to enhanced panel efficiency, declining module costs, and supportive government incentives.
Key ROI factors:
Energy savings (replacement of costly grid electricity).
Subsidies and tax benefits.
O&M expenses.
Inflation in grid tariffs (average 4–6% annually).
Typical payback periods in 2026:
Rooftop solar (CapEx): 3–4 years.
Ground-mounted industrial solar: 4–5 years.
RESCO/OpEx model: Immediate savings with no payback period.
ROI estimates:
Businesses can expect 18–22% internal rate of return (IRR) in 2026.
Over 20–25 years, solar saves 60–80% in electricity costs.
Declining cost trends – Costs faced by companies for modules and inverters are falling.
Policy support – The MNRE and the policies at the state-level support the commercial missions of solar.
Decarbonization agenda – Solar adoption is advantageous for companies that wish to comply with their ESG commitments.
Technology shift – High efficiency bifacial panels and AI monitoring helps to minimize the downside risk of solar over a long period.
Financing alternatives – There are now significant numbers of solar financing products available for companies in India, so that even small businesses can access solar.
Lower electricity bills: Long-term hedging against rising grid tariffs.
Tax Benefits: Accelerated depreciation under the Income Tax Act.
Increased ESG Ratings: Continued brand protection and compliance with sustainability standards.
Access to Green Capital: Investors interested in renewable or sustainable portfolios.
Increased Competitiveness: Reducing operating costs increases profits.
KPI Green Energy is one of India's top renewable energy companies that provides complete solutions for industrial solar projects. KPI Green Energy makes certain the company applies its knowledge and expertise from EPC (Engineering, Procurement & Construction), finance consultation, and O&M to ensure businesses get the maximum ROI of solar panels for industries in 2026.
As a strategic partner, KPI Green Energy ensures thoroughness from customized project design to helping industries look for solar panel financing in India 2026.
Sustainable, reliable & affordable energy systems
Ans: Businesses can select based on preference of ownership model whether CapEx, operation expenditure (OpEx), leasing, bank loans, and/or Government subsidies all have specific benefits depending on ownership preference and cash flow constraints.
Ans: Ultimately, the savings appreciated will depend on the scale of the project, location, and electricity tariff. But on average, based on solar system lifespan, industry projects can save between 50% and 80% on electricity bills.
Ans: For CapEx and ground-mounted solar projects, the payback period is normally 3-5 years, with an OpEx model paying back immediately.
Ans: Yes, banks and Non-Banking Financial Companies (NBFCs) have solar financing options and loans specifically for companies. However, the OpEx model allows SMEs to install solar without any upfront costs.
Ans: Most of the subsidies related to commercial solar still go to residential and agricultural projects. Businesses can avail various benefits, including accelerated depreciation, GST benefits, and state incentives.
