As commercial and industrial (C&I) consumers, particularly micro, small, and medium enterprises, seek to transition to sustainable energy solutions, the upfront capital required to set up projects is often a key barrier. However, banks and non-banking financial companies (NBFCs) are increasingly addressing this challenge by offering customized financing solutions for the C&I segment.

Shifting to solar can provide C&I consumers with a competitive edge by lowering power costs, improving operating margins, and enabling long-term tariff certainty. It can also help MSMEs access international markets more easily and obtain green certifications.

Industry experts note that consumers can secure financing of up to ₹300 million (~$3.18 million) from public-sector banks for rooftop solar and open access projects, while private-sector banks are also offering more competitive lending options.

Ease of Financing

Industry experts noted that financing solutions are now available across a wide spectrum of energy-efficiency, climate-mitigation, and clean-energy initiatives.

Vikas Agarwal, Founder and CEO at SKCA, said that while loans for renewable energy projects are typically offered with tenures of five to seven years, financing for battery storage projects can extend to 10 years. “NBFCs generally offer these loans at higher interest rates, up to 15%, compared to 9% to 12% from traditional banks.”

Hussain Hakimuddin, Key Account Manager at KM Global Credit (formerly Credit Fair), pointed out that NBFCs’ service segments, such as schools and hospitals, are often underserved by traditional banks.

He added that Credit Fair offers financing for projects up to ₹10 million (~$106,093), with interest rates ranging from 14% to 16%.  Projects exceeding ₹10 million (~$106,093) are also considered and executed in collaboration with co-lending partners.

He said loans of up to ₹1 million can be disbursed within 24 hours, while larger loans exceeding ₹1 million are typically disbursed within 48 to 72 hours.

Experts pointed out that NBFCs can offer MSMEs and their EPC partners access to loans for sustainability projects through streamlined processes and minimal documentation requirements.

Explaining the process of applying for finance, Hakimuddin said that only basic documentation, such as KYC documents, financial statements, GST filings, and electricity bills, is required. Further, credit history assessments are conducted through credit bureaus, and approved loan amounts are disbursed directly.

While traditional banks offer lower interest rates, NBFCs play a critical role in expanding access to finance.

Agarwal said that NBFCs are also increasingly structuring loans so that project savings can be used to repay loan installments, reducing the financial burden on MSMEs.

Experts noted that NBFCs are better positioned to serve customers without formal credit ratings and can process loans much faster, typically within two to four days, compared to the one to two months taken by traditional banks.

Overcoming Credit Ratings Limits

A lack of formal credit ratings remains a significant barrier for many MSMEs seeking financing for sustainable projects.

Experts said public-sector banks are now offering loans of up to ₹100 million (~$1.06 million) without requiring a credit rating, an amount broadly aligned with the financing needs of a typical MSME installing a 2 MW solar project.

Agarwal highlighted that even if there are challenges with the balance sheet, consumers can avail funding from NBFCs at higher interest rates of 15% to 18%. “In such cases, lenders rely on GST filings and bank statements to conduct due diligence.”

He added that financial institutions are increasingly adopting cash flow-based underwriting models, assessing repayment capacity through banking transactions rather than balance sheet strength.

However, experts emphasized that MSMEs must maintain proper financial records, including audited balance sheets, GST filings, and registration certificates, as gaps in documentation can hinder access to financing.

Hakimuddin noted that although solar is a mature technology, systems may still require repairs and replacements over their lifespan. To mitigate such risks, he recommended pairing financing solutions with insurance coverage.

These issues were discussed at Mercom India’s C&I Clean Energy Meet held in Mumbai recently.

Mercom India organizes nationwide ‘C&I Clean Energy Meets’ to connect solar developers with businesses exploring clean energy adoption. These events are designed to bring key stakeholders together on a single platform and promote awareness of the advantages of transitioning to solar energy among commercial and industrial consumers. The next event will be held in Jodhpur on May 15, 2026.