GRID-CONNECTED ROOF TOP

SOLAR PV SYSTEM

MNRE SUBSIDY SCHEME

CONCEPT PAPER

PRESENTATION BY
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
PAPER)

Eligible beneficiaries

Institutions
(Schools, Health Institutions
Residential Buildings including Medical Colleges and
( All types ) hospitals, Universities, Educational
Institutions (applicable to not-for-
profit registered organizations

Note: Buildings of Central, State Government and local government covering all
Government offices, Government Institutions, Public Sector Undertakings, all buildings
owned by Government directly or by any Government owned Societies, companies,
corporations, institutions or organizations, Government Educational / Health institutions
, and all types of buildings of Private, Commercial and Industrial sector are not eligible
for Central Financial Assistance under the Scheme.
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
PAPER)
Scope of the • Minimum capacity: 1.00 kWp per project/ system.
Programme & Size of
• Maximum capacity: 500.00 kWp per project/ system.
Projects
• Programme mode : Projects upto 50 kWp

• Project mode : Projects above 50 kWp

• 30% of the benchmark cost or the actual project

cost, whichever is less, for general category
Amount of Subsidy States/UTs.

• 70% of the benchmark cost or the actual project

cost, whichever is less, for special category
States/UTs i.e. North Eastern States, Sikkim,
Uttarakhand, Himachal Pradesh, Jammu &
Kashmir, Lakshadweep, Andaman & Nicobar
Islands.
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
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Project cost, • The benchmark cost is subject to revision by
Benchmark cost MNRE on yearly/half yearly basis, and the
same will be made available on
http://mnre.gov.in by MNRE.
Pattern of •
The pattern of assistance to meet project cost
Assistance for both will be as under:
Programme mode
and Project mode  Applicable in general States
• Margin from beneficiary : 30%
• Subsidy under CFA : 30%
• Bank loan : 40%
 Applicable in special category States
• Margin from beneficiary : 10%
• Subsidy under CFA : 70%
• Bank loan : 20%
(Bank Loan will comprise Loan plus subsidy)
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
PAPER)
Eligible Loan Residential: Under the eligibility criteria of
amount Home Loan as per extant guidelines, cost of
rooftop project should be part of project cost of
Home Loan. Excising Home Loan borrowers
whose repayments are in order may also be
targeted.

Institutions: Based on viability of project.

Facility Term Loan comprising Bank loan and subsidy
amount.

Repayment Period Maximum: 10 years, including moratorium

period of 1 year for Institutions.
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
PAPER)
Business  The borrower sets up rooftop solar project with the intent to
Model reduce his own power costs. Residual power, if any, can be feed to
(CAPEX) the grid.

 The Borrower would approach an EPC contractor for the installation

of the project. The O&M contract may be given to the same EPC
contractor or some other person.

 Debt servicing is dependent on the main business activity of the

Borrower.

 Financial appraisal would be like any other asset (e.g. machinery)

financing proposal.
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
PAPER)
• MNRE has given in-principle approval to SBI for installation of
Modalities aggregate capacity of 500 MWp under the scheme.
for
handling
subsidy • MNRE has opened a Current Account with our New Delhi Branch
(Nodal Branch) for maintaining subsidy under the Scheme for all
SBI branches across the country).

• MNRE will release subsidy amount in advance and continue to

maintain adequate balance in the Subsidy Account with the Nodal
Branch so that the scheme could be implemented by SBI branches.

• No lock-in-period for subsidy. Subsidy amount will be adjusted as

the last instalment towards liquidation of outstanding loan
amount.

• In case of default or account becoming NPA, the Bank reserves the

right to adjust subsidy amount immediately on occurrence of such
event simultaneously with pursuing legal recourse against the
defaulting borrower for recovery of Bank’s dues
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
: PAPER)
• The Nodal officer will co-ordinate with MNRE for seeking their
financial sanction for releasing subsidy in advance in a phased
manner so that the Scheme could be smoothly implemented by
SBI branches.

• Nodal Branch will release upto 30% of the eligible subsidy amount
after receiving the subsidy claim form (Annexure I) from the
respective branch.

• Nodal officer will release the remaining 70% of subsidy amount

only after receipt of claim on the prescribed format (Annexure II)
from the operating unit on COD.

• Join Verification Report (Annexure III) signed by the authorised

branch official and the borrower about successful commissioning
of the project to be submitted to Nodal Branch.

• Nodal Branch will keep all records of subsidy claims by the

operating units and make available for scrutiny / audit by the
officials designated by MNRE/ Bank’s Internal Audit
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
PAPER)
Role and • Branches will start disbursement of loan only after receipt of
Responsibilities of 1st Tranche of subsidy i.e. 30% of total eligible subsidy.
Operating units (
SBI branches):
• Subsidy amount will be kept in the same CIF of loan account
as non- interest bearing Term Deposit so that system will
automatically ensure that no interest is charged on the subsidy
portion of the loan sanctioned to the borrower.

• Branches will submit subsidy Utilisation Certificate to the

Nodal Branch after receipt of total eligible subsidy amount.

•Operating units will keep all records of subsidy claims sent to

Nodal Branch and make available the same for scrutiny / audit
by the officials designated by MNRE/ Bank’s Internal Audit.
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
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Track Record of EPC Only empanelled by MNRE with at least one year experience
Contractor in installation of RE projects
Building Borrower must have legally valid possession of the house/
building on which roof top solar plant is installed
Primary Security Hypothecation of Plant & Machinery.
Collateral Security Residential Borrowers: Extension / creation of EM charge
over house on which roof top solar plant is installed in existing
as well as new housing loan borrowers.
Institutional Borrowers: FACR is 1.25 and above. However,
where it is felt necessary as a risk mitigant and/or where it is
forthcoming, collateral security may be explored on case to
case basis.
(Assignment of PPA entered into with Discom if surplus power
is supplied to grid.)
Equity At least 10%/ 30% of project cost for borrowers in respect of
(Minimum) Special State category and general category States
respectively.
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
PAPER)
Interest Coverage Ratio Min - 2 (Acceptable Level – Min 1.75)
Fixed Asset Coverage Ratio Above 1.25 (Acceptable level - 1.25 Min)
(FACR) in a year
Net Debt (Long Term 4:1
Debt)/EBITDA)-Maximum
Rate of Interest As per MCLR with spread as per CRA/ ECR
Concession of 10 bps on effective interest rate.
Loan Tenor Door to Door tenor at Max 15 Years (comprising
(Maximum) construction, moratorium and repayment period).

Moratorium Maximum 12 months post DCCO.

Debt Service Reserve Account Equivalent to 3 months principal and interest

(DSRA) (Minimum)
Credit Risk Assessment (CRA) Applicable as per Bank’s instructions
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
PAPER)
Pre-setup Pre-set up clearance/approval from State Agency/State
clearance/Approvals Electricity Board/Discom, as the case may be, to be in
place.
Statutory Clearances & The required clearances/ approvals should be in place,
PPA before disbursement of 1st tranche of the sanctioned
credit facility. Any credit proposal sanctioned based on
MoU, first disbursement should be made only after
receiving PPA duly vetted by Bank’s legal Cell/LLC.
Power Purchase Long term off take arrangement with a Discom / a
Agreement procurer should be in place. The project should have
Must Run Status accorded by DISCOM/ Off taker.
Evacuation Facility Prior approval from DISCOM is to be in place for setting
up Grid Connected Rooftop Solar PV Project.
Disbursement Direct disbursement of term loan to suppliers/contractors
on verification of supporting documents/certificates/site
visit etc,
 MNRE SUBSIDY SCHEME FOR BANKS (CONCEPT
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• A separate guidelines on Grid Connected Rooftop Small Solar PV Power

plants under MNRE Subsidy Scheme to be issued by MNRE to have
uniformity of approach .

• As per the scheme, eligibility is restricted to residential buildings and

institutions registered under Not for Profit Organization. We have been
receiving query from Channel Partners empanelled from MNRE as to
whether they are eligible for subsidy under this scheme, if they put up
Rooftop Solar projects on the roofs of eligible category of benefiaries.
Please clarify.
APPLICATION FORMATS

•FORM B

•FORM C