Solar Loan Schemes in Sri Lanka
If I ask you “What is the barrier to put up a solar PV system on your roof?“. You would say IT’S THE COST. It’s true! But we know we really need a solar PV system on our roofs, WHY??? Because the benefits we get after installing a solar PV system is way higher than what we spend. In technical terms, the return for our investment is quite high. Well, you can stop worrying now. There are some insanely awesome solar loan schemes with interest rates as low as 6.75%!!!
Who gives solar loans at 6.75% interest rate? Too good to be true?
IT IS TRUE! Well, it turns out that government of Sri Lanka is helping out to install solar panels on roof tops to make it affordable. Going for a solar loan is really easy and worth it under these circumstances! Today I’s going to share more of these amazing solar loan schemes with you. Keep reading…
Solar Loan Schemes Makes Solar Power Systems Affordable to Public
As you know, the hype for solar PV system installations is still prevailing in the country. I believe it will continue to prevail in the country with the tax reliefs given for solar products. The price of a solar PV systems (including the installation costs) have reduced drastically over the last few years because the government waived the taxes imposed on solar panels.
This gives an opportunity for a lot of solar companies in Sri Lanka to reduce their installation costs. Also, it has helped to startup many solar companies who install solar PV systems to enter into the green energy market since the prices of solar power components was an entry barrier to them.
Competition Between Solar Companies in Sri Lanka is Good – Rates Go Low
The competition between the solar companies have dropped solar installation prices to a minimum. Solar power systems have become more affordable to the common public. But still, the cost of installation takes several lakhs which is not readily available at the hands of most of the people in Sri Lanka.
Now, I’m going to tell you the REASON why I told that IT IS WORTH GOING FOR A SOLAR LOAN. Proceed…
To make things possible, a lot of banks have introduced solar loan schemes which makes it possible to install a solar PV system on their roof. Then the electricity bill becomes zero.
With the low interest rates, the monthly installment is less than the electricity bill that the customer paid before. Profitable investment! Don’t you think?
OK! I’ve been beating around the bush all this time. Lets find out more about these amazing solar loan schemes and what they offer.
RIVI BALA SAVI Solar Loan Scheme – [6.75% Interest Rate per Annum]
As you know, government of Sri Lanka introduced Sooryabala Sangramaya program to promote solar generation in Sri Lanka. Waiving taxes of the solar power equipment is an initiative that the government took to promote solar generation in the country. The government also reduced the taxes for inverters as well.
Government introduced a solar loan scheme where,
government pays a half of the interest and the customer pays only the other half of the interest, which is amazing!
This is another initiative the government took to promote roof-top solar PV systems in Sri Lanka. This solar loan scheme is named “Rivi Bala Savi”. Customers can apply for this solar loan which is under “Enterprise Sri Lanka” program that the government conducts currently. 13.5% per annum is the usual interest rate of state banks . In Rivi Bala Savi solar loan scheme, government pays half of the interest. Therefore, the customer is able to take the solar loan at an interest rate of 6.75% for 5 years. The maximum that the customer can acquire from this solar loan is scheme is Rs. 350,000.00.
How much can we obtain through this solar loan?
The amount of Rs. 350,000.00 is sufficient to install a 1.5kW system (5 solar panels and 1.5kW inverter) from a solar PV service provider registered in Sustainable Energy Authority (SEA) of Sri Lanka. A 1.5kW system, on average generates 180 units per month. Therefore, electricity is free for the customer up to 180 units. The monthly installment will be exactly Rs. 6,500.00 which is quite affordable for most of the people in Sri Lanka. After 5 years, the customer does not have to pay the loan nor the electricity bill. Usually the guarantee for a solar PV system is of 25 years.
How can we obtain this solar loan?
Obtaining this solar loan is relatively easy. In order to receive the solar loan, the customer has to reach out to a solar company. The solar company should be registered in the Sustainable Energy Authority of Sri Lanka. Customer has to get a proposal for the system of the solar PV system from the solar company. Then, the customer has to apply for the solar loan from any state bank (Bank of Ceylon – BOC, Regional Development Bank-RDB or Peoples Bank). Once the bank grants the approval, the customer is able to start installing the solar PV system on the roof. After that, customer needs to enter into an agreement with the CEB (Ceylon Electricity Board) or LECO (Lanka Electricity Company) who are regulating bodies of electricity distribution in Sri Lanka.
LECO Solar Loan Scheme – [8% Interest Rate per Annum]
This solar loan scheme is sort of limited for the regions where LECO supplies electricity. If LECO provides electricity to your regions you can obtain this solar loan. LECO solar loan scheme is applicable only to the customers of Lanka Electricity Company (Private) Limited. This is also an initiative of Sooryabala Sangramaya in collaboration with LECO and NSB (National Savings Bank) bank.
To Obtain This Solar Loan, You Have to Fulfill Some Requirements
The customer needs to own the roof. The electricity account should be under customer’s name. This is applicable for both single phase and three phase connection holders.
The customers who have already installed solar PV systems under “Net Metering” for the same premises will not be eligible for the solar loan scheme unless there is an upgrade in the original system.
Customers whose connections were disconnected for more than two times due to not settling the bills in the past 12 months will not be eligible for the LECO solar loan scheme.
Customer who have taken any loans for solar installations will not be eligible for the solar loan scheme.
This solar loan scheme is only for roof-top solar installation. For ground mounted solar installations, this solar loan scheme is not valid
There are two types for this solar loan scheme.
Maximum loan amount is 90% of the cost of the solar PV service provider for the solar PV system installation and can go up to a maximum of Rs.500,000.00 (5 Lakhs).
Maximum loan amount is 75% of the solar PV service provider’s cost for the installation of solar PV system. The maximum loan amount under type B is Rs.1,000,000.00 (10 lakhs).
The interest rate for this solar loan is 8% which is drastically less compared to other solar loans given by banks and the loan repayment period is 7 years (84 months). However, if the customer wishes to shorten the repayment period, there is an option to shorten the repayment period for 5 years (60 months or less). The monthly installment will depend on the repayment period and the interest rate. There is a charge of Rs. 1,500.00 as the loan processing fee from National Savings Bank (NSB).
How to apply for the LECO solar loan scheme?
The customers can either visit the nearest NSB in LECO operating areas or the LECO itself and get the solar loan application form. The basic procedure for solar loan application and reception is given below.
Below I have given the procedure to obtain this solar loan step by step. If you are hoping to obtain this solar loan, I recommend you to not to do it all by yourself. You don’t have to go through the pain of going here and there wasting your precious time. It’s a government funded solar loan scheme, so I hope you can understand 🙁 .
Let your solar company go through this burden. Most of the solar companies in Sri Lanka like Suntek Industrial Solutions Pvt Ltd. will go through all the burden of approvals and stuff. They will finally get you your solar loan. That’s a tip for you.
The procedure is a bit lengthy. If you are not interested in getting this solar loan, skip this part!
Initial Steps Before Installation
Customer has to fill the LECO solar loan application form and visit LECO for the loan prequalification process. If eligible, LECO will issue a letter to NSB. A copy is given to the customer.
Under the consent of the customer, solar PV service provider can collect this letter from LECO as well.
Then Customer needs to visit NSB with the filled form certified by LECO and produce it for approval along with supporting materials.
Customer needs to provide proof of ownership of the premises to NSB.
Customer also needs to get a proposal from the solar PV service provider who is certified by the Sustainable Energy Authority (SEA) of Sri Lanka and produce it to LECO for approval. Along with the proposal.
customer should give his/her consent to LECO by signing a form that he/she gives consent to
Add the monthly installment of the solar loan to electricity bill
Allow LECO to give priority to loan installment in the event of an underpayment
Allow payments to the customer under Net accounting or Net plus scheme and under the same electricity account is transfer to the customer’s savings account at NSB
After completing the above, the customer can request connection by applying under net metering, net accounting or net plus schemes.
Steps After Installation
After LECO and NSB approves the solar loan, NSB releases the first part payment of the loan to the customer. That is 40% of the full amount. It is an advance to place with solar PV service provider. Then the customer can ask the service provider to do the installation as proposed.
Once the installation is complete, the customer has to get a report from a chartered electrical engineer about the installation and provide it to LECO. Service provider handles this part usually.
If the installation is as in the proposal, LECO gives the connection estimate to the customer. Once the customer pays the estimate, LECO gives the connection to the customer and NSB will release the rest of 60% to the customer.
Customer has to pay the first installment right after the disbursement of the total loan amount.
Thereafter, the electricity bill received by the customer will include the payment for electricity (if any) and the monthly installment of the solar loan.
When the customer is paying the electricity bill, it is first considered as the settlement of the monthly installment and then the rest as the payment for electricity (if any).
- NSB transfers the earnings of the customer from the solar generation under net accounting and net plus schemes to the savings account opened in NSB at start.
Customer need not to go through all this burden. Call Suntek customer support for assistance. Experienced professionals in Suntek will handle the burden and go through this process on behalf of the customer under the consent of the customer.
Sampath Bank Solar Loan – [11% Interest Rate per Annum]
According my research on solar loans, Sampath bank has the third best solar loan.
The customer should prove the fact that this solar loan will be used to set up a solar PV system or any other green energy initiative by submitting a proposal
The customer can receive up to 75% of the total cost for the implementation of a solar PV system on his/her roof.
Sampath bank gives up to Rs.7,000,000.00 as a loan to the customers under this solar loan scheme.
The loan repayment period is from 1 to 7 years.
The annual interest rate is a fixed rate of 11%
The monthly installment will depend on the repayment period.
NDB Solar Vantage Solar Loan
NDB solar loan for domestic solar installations are provided only to the solar installations with the net metering schemes.
This solar loan scheme is applicable for customers who consume electricity more than 200 units per month (incurring over Rs.15,000.00 electricity bill per month). This limitation is to ensure the efficiency of the payback for the investment.
The solar PV service provider should be a certified solar company in sustainable energy authority of Sri Lanka (SLSEA).
The customer can choose either of fixed or floating interest rate. The repayment period is 8 years maximum.
Customer can get the total cost of installation as the solar loan amount (100%) or 75% of the total cost of the installation.
Here Is The Application Procedure For NDB Solar Vantage Solar Loan
In order to apply for this solar loan, first customer needs to contact NDB bank and request a basic eligibility check. No documents (No CRIB) required for this process. Then the customer will receive an email with all the registered suppliers with the NDB bank. The customer has to select a good supplier for the installation and get a quotation. Then the customer has to submit the proposal with the other required materials and open an NDB account.
Once NDB bank approves the solar loan, the solar PV service provider (Installer) will receive an offer letter and acceptance of same. Solar PV Service provider (Installer) will issue a notice accepting the offer. Supplier should also send a copy to the customer as well. Then the supplier completes the net metering connection. After the installation, the loan will be disbursed immediately to the customer’s account and the pay order will be issued immediately and will be handed over to the customer.
NSB ECO Solar Loan – [13% Interest Rate per Annum]
Customer should be a Sri Lankan citizen of age between 18 – 60 years
The monthly salary or the pension should be remitted to NSB
The interest rate is 13% per annum
The customer is able to get a maximum of Rs.1,500,000.00. The amount depends on the repayment capacity as assessed by the bank. The repayment period is a minimum of 5 years and a maximum of 7 years.
No security guarantee required for this solar loan scheme.
Commercial Bank Solar Loan
Commercial bank green energy loan is a personal loan issued for roof-top solar PV systems installed domestically.
The customer should be less than the age of 60. The customer should have been in permanent employment at least for one year and his/her salary should be greater than Rs.50,000.00 to apply for the solar loan.
Self-employed professionals should be registered members of a professional awarding body and should have at least Rs.50,000.00 as disposable income. The customer’s age should be between 18-60 years.
The bank will issue a solar loan covering 75% of the total cost of installation of the solar PV system.
For small and medium enterprises (SME) and entrepreneurs who wish to invest on solar energy, Commercial bank offers solar loans up to Rs.25,000,000.00 which is repayable in 7 years. Commercial bank offers the solar loans for the purpose of energy saving, energy efficiency and total off-grid renewable energy solutions.
In order to apply for these solar loans, organizations must comply with the national environmental standards like,
- Waste management systems
- Waste water treatment systems
- Air pollution control systems
- Solid waste recycling plants
- Sound pollution control systems etc.…
PAN Asia Bank Solar Loan – [13.95% Interest Rate per Annum]
Your should fulfill the following for you to be eligible for this solar loan.
- The customers who are applying for the solar loan should be Sri Lankan citizens
- The age of the customer who is applying for the solar loan should be between 19-65 years
- The customer should be a salaried employee, self employed entrepreneur, business personnel or any other professional who is registered in a recognized professional body.
Following are the solar loan scheme details of Pan Asia Bank
- Interest rate of 13.95% per annum
- The solar PV system service provider (Installer) should be a registered company in Sustainable Energy Authority of Sri Lanka
- The repayment period is up to 7 years
- Guarantors not required
- Installments are calculated on reducing balance basis
- Capital recovery grace period of 2 months after the date of the disbursement of the loan
- Can make early or partial settlements
The Documents required to be submitted to the bank
- Performa invoice from solar PV service provider (installer)
- Solar Loan application completed
- National Identity card, driving license or passport
- Employment details from the employer
- Recent Salary slip given by the employer (If variable allowances are considered, 6 months’ salary slips are required)
- Electricity bills of last three months prior to the date of application (electricity account should be under the name of the applicant)
- For self-employed personnel and businessmen, the current account statement for the last 6 months is required
- SI with Irrevocable undertaking / EMI / DSA assignment confirmation
That’s it! To wrap this up, let me share with you some important TIPS when you search for a solar loan.
Some TIPS For You To Know Before You Obtain a Solar Loan
- Always check if you can get a solar loan with lesser interest rate. You can earn more profit in that way.
- Always let the solar company or your solar service provider handle the burden
- Check you monthly installment and compare it with what you gain from solar pv system
- Calculate how much you have to pay as interest
- Most of all, do a research and find out it its worth for you to install a solar pv system on your roof!
If you find it difficult to find out whether going for a solar pv system is profitable or not, click this link and read the article on how to find out the profitability of a solar PV system. It is not for technical guys. I have given everything plain and simple!
If you need more help, you can directly contact Suntek Industrial Solutions who is one of the reputed suppliers who can help and guide to acquire any solar loan. Customers can make a call to the number 071-30737125, and get in contact with the experienced professionals and ask for assistance. Friendly and helpful customer service of Suntek Industrial Solutions (Pvt) Ltd. will help until the customer receives the full solar loan and until the project finishes. Suntek guides and supports customers providing all the necessary information with less burden.Sustainable Energy Authority of Sri Lanka recognizes Suntek Industrial Solutions as a qualified company, therefore feel free to ask for any assistance. Suntek will help the customers to acquire any of the above mentioned solar loans, hassle free!