Setting up a solar power plant in India right now comes with one of the most generous subsidy structures available for any renewable energy project — up to 60% of your project cost covered between central and state government support under the PM-KUSUM scheme. But accessing that subsidy and the accompanying bank loan depends entirely on one document most applicants underestimate: a properly prepared project report.
At Sharda Associates, we prepare CA-certified project reports for solar power plant projects — whether under PM-KUSUM, rooftop solar financing, or standard bank term loans — and the process is built to be simple for you. Share your project details over a call or WhatsApp, and we handle the technical and financial structuring banks and MNRE-linked schemes expect, delivered within 24 to 48 hours for ₹2,999.
Understanding MNRE and the Schemes That Apply
The Ministry of New and Renewable Energy (MNRE) is the central government body responsible for solar, wind, and other renewable energy policy in India. Under MNRE, several distinct schemes support solar installations, and it’s important to know which one applies to your specific project:
PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan) — designed specifically for farmers, FPOs, cooperatives, and panchayats to set up decentralized ground or stilt-mounted solar power plants, generally between 500 kW and 2 MW capacity, on barren or fallow agricultural land. The electricity generated can either be used for irrigation or sold to the local DISCOM under a feed-in-tariff arrangement.
PM Surya Ghar: Muft Bijli Yojana — aimed at residential rooftop solar, offering a central subsidy of up to ₹78,000 for households, with the system size capped around 3 kW for maximum benefit.
Grid-Connected Rooftop Solar Programme — covers commercial and institutional rooftop solar installations, with subsidy percentages varying by system capacity.
For anyone setting up a power-generation-scale solar plant for commercial purposes — rather than a small rooftop residential system — PM-KUSUM Component-A is typically the relevant scheme, and this is where a bank loan and detailed project report become essential.
What PM-KUSUM Component-A Offers
Component-A of PM-KUSUM specifically supports setting up Renewable Energy Power Plants (REPP) of 500 kW to 2 MW capacity by individual farmers, groups of farmers, cooperatives, panchayats, FPOs, or water user associations.
- Central Financial Assistance (CFA) of 30% of the benchmark or tender cost of the solar PV component, whichever is lower
- State government subsidy of at least 30%, with the farmer or developer contributing the remaining amount
- Bank financing available for up to 30% of project cost, meaning the farmer’s own upfront contribution can be as low as 10% in many cases
- Higher subsidy support (up to 50%) in North Eastern states, Sikkim, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Lakshadweep, and Andaman & Nicobar Islands
The electricity generated is purchased by DISCOMs at a feed-in-tariff approved by the respective State Electricity Regulatory Commission, giving project owners a long-term, predictable revenue stream over the typical 25-year project period.
Why Banks Require a Detailed Project Report for Solar Plants
Even with substantial subsidy support, the loan portion of your project still goes through standard bank credit appraisal. Banks evaluate solar power projects much like any other infrastructure loan — they want to see that the project will generate sufficient, reliable revenue to service the loan over its tenure.
A solar power plant project report typically needs to demonstrate:
- Technical specifications — solar PV capacity, panel type, expected generation output based on location-specific solar irradiance data
- Project cost breakdown — land, solar panels, inverters, mounting structures, grid connection infrastructure, and any battery storage if applicable
- Revenue model — the feed-in-tariff rate applicable in your state, expected annual generation, and resulting revenue projections
- Subsidy and means of finance — how much comes from central CFA, state subsidy, your own contribution, and the bank loan
- Financial projections — multi-year P&L, balance sheet, and cash flow, reflecting the 25-year typical project life and degradation in panel efficiency over time
- DSCR calculation — particularly important here, since revenue depends on actual generation, which varies seasonally and can be affected by weather patterns
Common Mistakes in Solar Project Reports
Overestimating generation output. Solar panel efficiency naturally degrades by roughly 0.5-0.8% per year, and actual generation depends heavily on local irradiance, shading, and maintenance. Project reports that assume constant peak output for the full loan tenure tend to raise questions during bank appraisal.
Ignoring feed-in-tariff variability. Tariff rates differ by state and can be revised by the State Electricity Regulatory Commission over time. A report that doesn’t account for this with reasonable assumptions can look unrealistic to a credit officer familiar with the sector.
Underestimating maintenance and O&M costs. Solar plants require ongoing operations and maintenance — panel cleaning, inverter servicing, and monitoring — which need to be reflected as recurring costs in your financial projections, not treated as negligible.
Mismatched subsidy assumptions. Since PM-KUSUM funding involves both central and state contributions, a project report that doesn’t clearly separate and correctly calculate each component can create discrepancies that delay loan sanctioning.
How Sharda Associates Prepares Your Solar Project Report
- Share your project capacity, location, and cost estimate over a call or WhatsApp
- A CA structures the technical and financial sections based on realistic generation assumptions for your specific location and the applicable feed-in-tariff
- Subsidy components are calculated correctly — separating central CFA, state subsidy, and your own contribution clearly
- DSCR and multi-year financial projections are prepared, accounting for panel degradation and ongoing O&M costs
- You receive a CA certified, bank-ready report within 24 to 48 hours
Get Your Detailed Project Report →
Conclusion
Solar power projects under MNRE and PM-KUSUM offer one of the strongest subsidy-to-cost ratios available in Indian renewable energy financing right now, but the bank loan component still depends on a project report that reflects realistic generation, tariff, and cost assumptions. A well-prepared, CA certified report is what separates a smoothly sanctioned solar loan from one stuck in revision cycles — and it’s exactly what we focus on getting right at Sharda Associates, quickly and without complication on your end.📞 Call Now: +91 89899 77769
Frequently Asked Questions
1. What subsidy is available for setting up a solar power plant in India?
Under PM-KUSUM Component-A, central financial assistance of 30% of the benchmark cost is available, along with at least 30% state subsidy, meaning farmers and developers may need to fund as little as 10-40% of the project cost themselves.
2. Do I need a project report to get a bank loan for a solar power plant?
Yes. Banks require a detailed project report covering technical specifications, project cost, revenue projections based on the applicable feed-in-tariff, and DSCR calculations before sanctioning a loan for solar power generation projects.
3. What is PM-KUSUM Component-A?
It’s the part of the PM-KUSUM scheme that supports setting up decentralized, ground or stilt-mounted Renewable Energy Power Plants between 500 kW and 2 MW capacity by farmers, FPOs, cooperatives, and similar entities.
4. How is solar power plant revenue calculated for the project report?
Revenue is typically calculated based on expected annual generation (accounting for location-specific solar irradiance and gradual panel efficiency degradation) multiplied by the feed-in-tariff rate approved by the relevant State Electricity Regulatory Commission.
5. Who is eligible for PM-KUSUM Component-A?
Individual farmers, groups of farmers, cooperatives, panchayats, Farmer Producer Organizations (FPOs), and Water User Associations are eligible to set up renewable energy power plants under this component.
6. Is collateral required for a solar power plant bank loan?
This varies by bank and loan amount, though many solar financing schemes are structured to minimize collateral requirements given the subsidy backing and predictable DISCOM-based revenue stream.
7. What documents are needed for a solar project report?
Typically land documents, technical specifications of the proposed solar installation, machinery quotations, project cost estimates, and financial projections including DSCR, prepared as part of the detailed project report.
8. How much does a CA certified solar power plant project report cost?
At Sharda Associates, a complete CA certified project report for a solar power plant project, including financial projections and DSCR, is priced at ₹2,999 and delivered within 24 to 48 hours.
9. How long does a typical solar power plant project run for financial projections?
Most solar power plant financial projections are modeled over a 25-year period, reflecting the typical operational life and performance warranty period of solar panel systems.
10. Can the solar subsidy and bank loan be combined in one project report? Yes, and it’s standard practice — the project report should clearly break down central CFA, state subsidy, the applicant’s own contribution, and the bank loan amount as separate components of the total project financing.