Know, Solar Subsidy of Water Pumps by NABARD & its guidelines.

MNRE has revised its guidelines for procuring subsidy from NABARD for Solar PV systems and Solar Water Pumps in OCT 2014, below are few highlights from the revised guidelines

Eligibility

Only individuals, SHGs, NGOs and Farmer Groups are eligible under this scheme

Benchmark Costs / Subsidy Percentage – Minimum available subsidy is Rs 24 / Wp

Rs 75 / watt Subsidy for systems up-to 300Wp
Rs 39 / watt with Battery Power Plant
Rs 24 / watt without battery bank
Rs 28800 / HP for solar water Pumping system

Loan and Margin Money

20% of system cost has to be paid as margin money
40% cost of the system can be financed from the bank in minimum rate with term of 5 years
Remain 40 % Subsidy

Procedure

Submit an application to procure a loan for Solar home lighting system/Solar water pumping available from NABARD at your local bank
After your loan application is approved, you would have to deposit 20% of the margin money, depending on the size of your solar system/solar water pumping system
Your Bank Manager forwards your application to an approved Vendor/Channel Partner
Channel Partner completes the installation process
Bank Manager/Field Officer inspects your installation to ensure that only MNRE approved components are installed
Your application will be sent to NABARD to release the subsidy amount
After Subsidy amount is released from NABARD, Bank keeps the subsidy amount as a collateral towards your loan
If you default on the loan, you will not be eligible for subsidy amount, you will be responsible for repaying entire loan amount for your system

Practical IssuesAs you are aware there are several practical issues involved in getting your loan application approved, your system installed and your subsidy application is submitted/approved and subsidy amount procured from NABARD, below are few practical issues and solutions to circumvent those issues

Local BankIf you are living in an urban or semi-urban area, your local bank manager might not respond favorably to your request for solar loan, most urban and semi-urban banks are overloaded and they would not be interested in processing your loan application for following reasons

Your local bank is not aware of the procedure involved in processing your solar loan application under NABARD Scheme
Your local bank is not sure if they would be able to get your subsidy approved from NABARD
Your local bank is not interested in processing solar loans as there is a lot of paperwork involved and there is no incentive for the banks to process your loan
Your local bank does not have any directive from their regional or corporate office to offer solar loans
Your local bank does know/have any NABARD approved vendors to install these solar systems

Solution

Reach out to other interested parties in your area who are interested in these solar systems
Form a group of 10 to 15 interested parties approach your bank as a group
Reach out to one of the approved vendors/manufactures and let them know that you have a big group of interested individuals
Approved vendors will advice your local bank on the process involved and they will handle necessary paperwork

Authenticity of Vendors

There are several individuals and companies who claim to be authorised dealers and sub-dealers of NABARD approved manufacturers and you are not sure which of these individuals and companies are authentic

Solution

All NABARD approved manufactures provide a letter of approval to their authorized dealers for NABARD program, request a copy of approval letter from the individuals/companies

Warranty

NABARD program requires 25 years of warranty for Solar Panels and 5 years warranty balance of the system including solar inverter and batteries

Ask for warranty cards for all the components including solar panels, inverter and batteries
Ask these companies to provide references from their previous installations
Make sure that these companies have significant local presence and make sure that they are not fly-by-night companies

Solar Plant Capacity

You are not sure about solar plant capacity that you need to install to support your usage

Visit our website to configure your solar plant size based on your actual usage

You want to become a dealer

You are interested in becoming a dealer for installing solar systems as there are no companies in your area offering these services

Solution

Most NABARD approved manufacturers have their dealer network through out the country, select a manufacturer whose dealer network is the strongest in your area, approach the local dealer and express your interest in becoming a sub-dealer, ask the dealer to provide you with necessary training on the solar products and technology

Build a team of electricians and get them trained on how to install and wire solar panels, inverter and battery banks
Rent a physical location and offer a service point and post installation support for up-to 5 years

Other issues

If you have any other questions/issues in getting these NABARD systems installed let us know, we will add additional sections to this article addressing those questions/issues