Uttar Bihar Gramin Bank Capital Subsidy Scheme for Installation of Solar Off Grid

Thinking about switching to solar but worried about the upfront cost? The Uttar Bihar Gramin Bank (UBGB) Capital Subsidy Scheme for Installation of Solar Off-Grid systems is a practical way to go green without straining your cash flow. You get bank finance on MNRE-approved solar models, a hefty government subsidy to shrink the ticket size, and a repayment plan that can match your income pattern. Here’s a clear, human-friendly guide to help you decide confidently.

What the scheme does—in plain words

This scheme helps households, small businesses, and community groups install off-grid solar systems (think rooftop panels with batteries, solar lights, pumps, and small stand-alone systems) that reduce electricity bills and diesel dependence. Because it’s off-grid, it’s especially helpful where grid power is unreliable or expensive. The bank finances your system, the government contributes a capital subsidy, and you repay the rest in comfortable installments.

Who can apply (Eligibility)

It’s intentionally broad so more people can benefit:

• Individuals setting up solar at home or a small shop
• Self-Help Groups (SHGs), Joint Liability Groups (JLGs), and Farmers Clubs
• Other eligible community groups as per bank norms

The basic expectation: you should not be a loan defaulter with any bank or financial institution. Your branch will do the usual due diligence before sanctioning.

What qualifies (MNRE approval is key)

Loans are available only for models approved by the Ministry of New and Renewable Energy (MNRE). That keeps quality high and ensures your system is subsidy-eligible. Ask your installer for the MNRE approval stamp/model list or request your UBGB branch to confirm.

How the money part works (Margin + Subsidy + Loan)

• Margin: You bring 10% of the unit cost (your own contribution).
• Subsidy: You receive 40% of the MNRE benchmark cost as a capital subsidy.
• Loan: UBGB finances the remaining amount.

A quick example (for feel, not a quote)

Suppose the MNRE benchmark cost for your chosen system is ₹1,00,000.

• Subsidy (40%) = ₹40,000
• Your margin (10%) = ₹10,000
• Indicative loan ≈ ₹50,000

Your monthly outgo now depends on the interest rate and tenure you pick (details below), but the heavy lifting from the 40% subsidy keeps EMIs light.

Note: Benchmark costs vary by system type and can change. Your loan will be computed against the current MNRE benchmarks and actual invoice as per policy.

Security, lock-in, and disbursement

• Security: The solar system itself is hypothecated to the bank. No separate property collateral is normally needed.
• Lock-in period: 3 years. This discourages quick sell-offs and ensures the system remains in use.
• Disbursement: UBGB pays the supplier directly by cheque/draft once documentation is complete. You get delivery and installation without handling large cash transfers yourself.

Interest rate and tenure (cost you can plan for)

• Rate of interest: 11% p.a., applied/charged monthly (rate subject to change as per bank policy).
• Repayment period: Up to 5 years.
• Installment frequency: Monthly, quarterly, or semi-annual—you can match this to your income stream (salaried, seasonal business, farm cycles, etc.).

EMI feel (illustrative only)

For a ₹50,000 loan at ~11% p.a. over 5 years, the EMI is roughly ₹1,080–₹1,100 per month. Your sanction letter will show the exact figure for your case and date.

Why this is genuinely useful

• Lower upfront burden: The 40% subsidy reduces the financed amount immediately.
• Predictable savings: Solar can cut diesel use and grid units. Many users find monthly savings offset a good part of the EMI.
• Reliable power: Off-grid storage handles outages, protecting perishables or small machinery and keeping your home/business running.
• Green impact: Lower emissions and noise; better indoor air quality if you’re replacing a genset.

How to apply (step-by-step)

1. Choose your system & installer: Ensure the model is MNRE-approved. Collect a formal quotation with capacity, components, and warranty details.
2. Visit UBGB: Share your plan, quotation, and any preliminary site info (roof area, load profile).
3. File the application: The branch will help with the loan + subsidy paperwork and confirm eligibility.
4. Sanction & documentation: Review sanction (amount, rate, tenure, frequency), sign hypothecation, and complete documentation.
5. Disbursement to supplier: UBGB pays the vendor. Installation, testing, and commissioning happen per schedule.
6. Start repayments: Pick monthly/quarterly/semi-annual installments to match your cash flow. Keep invoices and warranty cards safe.

What to keep ready (documents checklist—typical)

• ID & address proof (standard KYC as guided by the branch)
• Bank account details with UBGB
• Installer’s MNRE approval evidence or model code, quotation/proforma invoice
• Any existing loan details if the bank requests them

Your branch will give the exact checklist for your profile and system type.

Tips to get the most value from your solar

• Size for your real load: Oversizing raises cost with little extra benefit; right-sizing improves payback.
• Prioritize efficiency first: LED lights, efficient fans, and appliance discipline reduce the capacity you need.
• Protect your batteries: Follow charging/discharging guidelines; it’s key to long life and stable performance.
• Insist on warranties: Panels, inverter, and batteries should carry clear, written warranties; log service contacts.
• Keep records: File your purchase, subsidy, and loan documents neatly—useful for service and any future upgrades.

Quick FAQs (straight answers)

Is the scheme only for rooftop panels?
It’s for off-grid solar systems approved by MNRE—this includes stand-alone kits, small rooftop setups with storage, and similar solutions.

Do I need property collateral?
The solar system itself is hypothecated as security—no separate property mortgage is typically required.

How is the subsidy paid?
The 40% capital subsidy is applied as per MNRE/Bank process against the benchmark cost; your branch and installer will coordinate the paperwork and timing.

Can I prepay early?
UBGB generally allows prepayment as per policy. Ask your branch about any current rules or charges; with short tenures, early prepayment can save meaningful interest.

What if rates or benchmarks change?
They’re subject to change. Your sanction letter and the current MNRE list at the time of sanction/disbursement are the source of truth.

The bottom line

UBGB’s Capital Subsidy Scheme for Solar Off-Grid is a practical path to clean power: MNRE-approved systems, 40% capital subsidy, just 10% margin, up to 5-year repayment, and 11% p.a. indicative pricing with security limited to the equipment itself. If you’re serious about cutting electricity costs, gaining outage resilience, and doing right by the environment, walk into your nearest UBGB branch with an MNRE-approved quotation and your KYC. You’ll walk out with a financing plan that turns sunshine into steady savings.