How to Start a Solar Panel Business and Secure Financing for It

Starting your own solar panel business can help you tap into one of India’s fastest-growing industries. With the rising demand for clean energy, you have a golden opportunity to create both profit and impact. You’ll learn how to set up your business, follow all legal steps, and create a solid solar panel business plan. You’ll also discover why financing matters and how to secure the right loan for solar energy business needs. Missing these essentials could set you back—so take control and give your business the strong start it deserves.

Building a solar panel business in India offers great potential—but only if you take the right steps from the beginning. A strong foundation will help you avoid risks and grow faster. Here’s a robust plan to help you get started and stay on track:

Choose Your Business Model

Your first step in understanding how to start a solar energy business is to decide which type suits your goals. Here are the most common models:

• Installation Services: Offer rooftop or ground-mounted solar panel setup for homes, schools, or factories

• Solar Product Dealership: Sell solar panels, batteries, and inverters as an authorised dealer

• Distribution: Act as a wholesale distributor to supply smaller retailers or installers

• Manufacturing: Produce solar panels or components (requires large investment)

• Solar Leasing or Financing: Provide solar systems on lease and earn through monthly payments

Prepare a Simple Solar Energy Business Plan

A clear solar energy business plan helps you stay focused, attract investors, and get funding. It should include goals, market insights, service details, and a breakdown of initial costs. Here’s what to include:

• Business goals and vision

• Description of services or products

• Target customer segments

• Competitor overview

• Marketing and sales strategy

• Cost estimates and revenue plan

• Required licences and permits

• Loan or funding needs (if any)

Conduct Market Research for Your Target Region

Before you start, understand the local demand and competition. This helps you offer the right services at the right price. Here’s what to research:

• Residential, commercial, or industrial demand in your area

• Existing solar players and their pricing

• Customer pain points (e.g., power cuts, high bills)

• Local government policies or subsidies

• Climatic conditions (sunlight hours, panel efficiency)

Select Reliable Vendors and Equipment Partners

Using high-quality equipment helps reduce maintenance issues and build customer trust. Here’s how to find the right partners:

• Choose MNRE-approved solar panel manufacturers

• Compare warranties, efficiency, and after-sales service

• Build a network of electricians, engineers, and certified installers

• Test products where possible before committing to bulk orders

• Negotiate rates for better margins on large projects

Estimate Initial Costs and Plan Your Budget

Knowing your startup expenses is key to financial planning. Use this to estimate how much money you need to start a solar panel business. Here are the major expenses to consider:

• Business registration and legal fees

• Initial stock or equipment purchases

• Office space or warehouse rent

• Salaries for technicians or sales staff

• Marketing, advertising, and digital setup

• Transport or logistics needs

Register Your Business and Complete All Licensing

Proper registration keeps your business legally safe and opens doors to government schemes. Learn more about how to start a solar panel business in India by ensuring your legal setup is complete and compliant. Here’s what you need to do:

• Register as a sole proprietorship, partnership, or private limited company

• Apply for GST registration

• Get a current account for your business

• Obtain any state-level power or energy-related licences (if applicable)

• Apply for Udyam registration to benefit from MSME schemes

Promote Your Services and Start Building a Client Base

Marketing your solar business is essential for attracting new customers and building long-term visibility in your local area. Here are some low-cost and effective ways to promote your services:

List Your Business on Online Platforms

Register your business on local listing websites and digital directories. This helps people in your area find you when they search for solar solutions online.

Run Targeted Social Media Ads

Create ads for your business and show them to people in your region using basic targeting options. Even a small ad spend can help you generate interest and enquiries.

Offer Referral Rewards to Customers

Encourage your satisfied customers to refer others by offering small rewards or discounts. This builds trust and helps you gain reliable leads with minimal effort.

Collaborate With Local Communities and Organisations

Connect with housing societies, schools, or small businesses that may need solar installations. These partnerships can lead to bulk orders or long-term contracts.

Use Brochures and WhatsApp Catalogues

Design simple brochures or digital catalogues to showcase your services and contact information. Share these in person or through messaging apps to expand your reach.

Collect and Share Customer Testimonials

Ask happy customers to provide feedback that you can use in your marketing. Positive reviews and testimonials build credibility and increase trust among new prospects.

Improve Your Local Search Presence

Use relevant keywords, location-based phrases, and service categories in your website or listings. This helps your business appear in local search results and attract nearby customers.

Registering your solar energy business adds credibility and opens the door to funding, tenders, and government incentives. Here’s what you need to complete:

• Register your business structure as a sole proprietorship, partnership, LLP, or private limited company to ensure legal recognition

• Apply for a GST registration number to comply with tax laws and enable input tax credit

• Secure local municipal permits or trade licences if required by your city or state authority

• Obtain MNRE certification to gain access to central and state-level solar subsidy programmes

• Open a current account in your business name for smooth financial transactions and professional credibility

Opening a solar panel business in India can be promising amid the growing demand for clean energy. The start-up costs depend on your business model—dealer, installer, or small-scale assembly unit—and vary significantly by city tier. A clear understanding of these cost components aids budgeting and planning. 

Tier Classification and Cost Factors

Tier 1 Cities (e.g., Mumbai, Delhi, Bengaluru):

• Dealership Fees: ₹50,000–₹1,50,000 for authorised dealership contracts. 

• Inventory: ₹2,00,000–₹8,00,000 for demo panels and inverters. 

• Office Setup & Tools: ₹1,00,000–₹2,00,000 for basic workspace and demonstration tools. 

Tier 2 & Tier 3 Cities (e.g., Jaipur, Kochi, Tier-3 towns):

• Lower real estate and labour costs, making overall setup more affordable. 

• Business model choice (installer vs dealer) greatly impacts the scale of inventory and equipment needed. 

Estimated Total Setup Costs

(Estimates include dealership fees, demo inventory, tools, and modest office setup; installer/assembly cost reflects additional equipment and working capital.)

Summary

• Tier 1 Cities: Higher investment driven by dealership costs and premium inventory.

• Tier 2 Cities: More balanced setup, favourable for local-scale operations.

• Tier 3 Cities: Most affordable, ideal for grassroots expansion with lean capital. 

Disclaimer: These cost figures are indicative and meant for illustrative purposes only and do not guarantee actual expenditure patterns. Actual investment needs may vary significantly depending on location, business model, inventory size, and infrastructure. It is important to consider consulting experts for precise budgeting.

Good financial planning gives your business the stability it needs to grow and survive during slow periods. Here’s how to build a strong financial foundation and secure the funding you need:

Create a Basic Cost Sheet

List all startup expenses including equipment, labour, transport, permits, and marketing. This gives you a clear picture of how much capital you need before you start operations.

Plan Cash Flow for 6–12 Months

Map your expected income and expenses month by month. This helps you manage your funds better and avoid cash shortages in the early stages.

Identify Collateral for Loan Applications

If you're applying for a secured loan, assess what business or personal assets you can offer as collateral This improves your chances of approval and may help reduce your interest rate.

Compare Lenders and Loan Options

Don’t settle for the first offer—compare interest rates, repayment terms, and processing fees from multiple lenders. Look for the best loan for solar energy business needs that matches your budget and repayment capacity.

Allocate an Emergency Fund

Set aside funds for unexpected costs like equipment failure, delayed payments, or sudden demand spikes. A buffer ensures your operations stay on track even during financial stress.

Starting a solar energy business often involves upfront costs that can’t be delayed or ignored. Here are the most common ways in which financing can support your business goals:

Bulk Purchase of Solar Equipment

Buying solar panels, inverters, and batteries in bulk helps lower costs per unit. However, this requires a significant upfront investment that a loan can easily cover.

Tools and Transport for Installation

Essential tools and reliable transport are needed to complete on-site solar installations efficiently. Financing helps you invest in quality equipment and delivery vehicles from day one.

Office or Storage Space Rental

Renting an office, storage unit, or warehouse is vital for inventory management and business operations. A loan can help cover rental deposits and setup costs without straining your budget.

Hiring Skilled Staff

Trained technicians and support staff are key to delivering quality service and handling installations. Financing ensures you can hire the right talent without compromising on other costs.

Marketing and Customer Acquisition

Building your customer base requires strategic digital and offline marketing efforts. With a loan, you can launch ads, create brochures, and attend trade events to boost visibility.

A business loan can give you the financial freedom to grow, adapt, or stabilise your operations when needed. Here are the key features and benefits you can enjoy:

High Loan Amount

Get access to loan amounts of up to ₹50 Lakhs to suit your specific business needs. Use the funds to boost working capital, expand operations, or hire essential staff.

Quick Approvals

Experience instant approval on your loan application without visiting a branch. Eligibility-based checks ensure the process is quick and completely online.

Zero Collateral

Apply for a secured or unsecured business loan depending on your requirements. You can access funds without pledging your valuable personal or business assets.

Competitive Interest Rates

Enjoy interest rates starting from just 14% per annum to keep your repayment affordable. You can choose flexible repayment tenures of up to 96 months based on your cash flow.

Variants of Business Loan

Choose between a term loan for a fixed borrowing amount or a flexi loan with a flexible withdrawal facility. Both options are available on Bajaj Markets to match your business needs and repayment style.

Here’s a quick comparison to help you choose the most suitable lender available on Bajaj Markets based on interest rates and repayment tenures:

Disclaimer: The interest rates, loan tenures, and offers listed are indicative and may vary based on lender discretion and applicant eligibility.

To qualify for a business loan, you need to meet a few basic eligibility requirements. These ensure that your business is financially stable and eligible for credit. Here’s what lenders typically look for:

• You must be an Indian citizen

• You should have a healthy CIBIL score

• You must be self-employed—either as a professional (like a doctor or CA) or a non-professional (like a trader or manufacturer)

• Your age should be between 21 and 60 years

• Your business must be registered as a partnership, LLP, or private limited company

• Your business should be operational for at least 1 year

• Your business must have a minimum annual turnover of ₹1.5 lakhs (as per ITR)

While checking your eligibility is important, keeping your documents ready can make the application process much smoother. Here’s a list of documents you may need to provide:

• Identity Proof: PAN card, Aadhaar card, passport, driving licence, or Voter ID

• Address Proof: Aadhaar card, passport, utility bill, or lease agreement

• Income Proof: Last 6 months’ bank statements, ITR, and certified financials (P&L, balance sheet, and income computation for the past 2 years)

• Business Proof: Sole proprietorship declaration, partnership deed, or certified copy of Memorandum and Articles of Association

Seeking a business loan to launch a solar panel business in India requires a sound credit profile—both personal and corporate. Financial institutions evaluate your credit standing to assess risk and finalise loan terms.

Your personal credit score (CIBIL) is a primary factor that lenders check. Most lenders expect a score of 750 or above for business loans, with 750+ considered excellent, leading to improved approval odds and better rates. Some financial institutions may offer tailored solar panel financing schemes where applicants need to have a strong CIBIL score. 

Meanwhile, the Company Credit Report (CCR) evaluates your business’s creditworthiness through repayment history and credit exposure. A stronger CCR improves your chances of securing solar project funding. A robust personal CIBIL score and favourable CCR significantly enhance your prospects of obtaining a business loan on attractive terms. 

To apply for a business loan, you do not need to visit a physical branch. Instead, navigate to the official website or use the Bajaj Markets app. The steps to apply for a business loan include:

• Click on the ‘Check Loan Eligibility’ button at the top of the page

• Fill in your basic personal information in the application form

• Choose your desired loan amount and repayment period

• Submit the form to proceed with verification

The Indian government offers a variety of central and state-level schemes to support MSMEs, including those in the solar energy sector. These schemes deliver financial support, subsidies, and incentives to ease business setup and growth. 

Central Government Schemes