Ref. No. NB.DPD-NFS/ SHLS.

1 / 1116 /2010-11

Circular No. 199 /DPD-NFS/ 04 /2010

01 November 2010

The Chairman/ Managing Director

All Commercial Banks/ Regional Rural Banks

Dear Sir,

Capital Subsidy-cum-Refinance Scheme for Installation of Solar Off-grid

(Photo- voltaic and thermal) & Decentralised applications under the
Jawaharlal Nehru National solar Mission of the Ministry of New and
Renewwable Energy, Government of India

1. The Ministry of New and Renewable Energy (MNRE), Government of India has
introduced a subsidy linked credit scheme for Solar Off-grid (Photo-voltaic &
thermal) and decentralized applications to promote commercial marketing of
solar energy systems and devices by extending financial incentives in the form of
capital and interest subsidy on loans availed from financial institutions by the
target clientele. The scheme provides for routing the capital subsidy and the
interest subsidy on bank loans availed of by the clients from the banking system
for solar energy conversion/ user systems and devices under this scheme
through National Bank for Agriculture and Rural Development (NABARD). “The
Capital Subsidy – cum- Refinance Scheme for installation of solar off-grid
(photovoltaic & thermal) and Decentralised Applications” is being introduced to
enable the Banking system (Commercial Banks and RRBs eligible for drawing
refinance from NABARD) to avail of the financial resources including the
subsidies on behalf of their borrowers for creation of relative assets (technically
termed as phot-voltaic and thermal systems).
2. The details regarding the objectives, scope of the scheme, eligible institutions
and other terms and conditions governing the Scheme have been listed in the
guidelines appended hereto.

3. You are requested to give wide publicity to the scheme through all your
branches and to prefer drawal applications for claiming the capital subsidy/
subsidised refinance under the scheme as per the scheme stipulations to the
respective regional offices of NABARD and thus help the objective of the Scheme
to promote off-grid applications of solar energy (both PV and Solar Thermal) ,
create a paradigm shift needed for commorditization of off-grid solar applications
and to encourage replacement of non-renewable energy sources like fossil fuels,
kerosene and diesel with solar energy to meet the energy requirements.

4. MNRE, IREDA and NABARD would be providing web and non-web based
technical support besides training to the field level functionaries of the financing
banks.

5. Please acknowledge receipt.

Yours faithfully,

(J.C.Mishra)
Chief General Manager

Encl: as above
 CAPITAL SUBSIDY-CUM-REFINANCE SCHEME FOR
INSTALLATION OF SOLAR OFF-GRID (PHOTO-VOLTAIC AND
THERMAL) & DECENTRALISED APPLICATIONS UNDER THE
JAWAHARLAL NEHRU NATIONAL SOLAR MISSION –
GUIDELINES

1. Background

1.1. Ensuring affordable, adequate and uninterrupted power supply to domestic

and other consumers, remains one of the major challenges before the country.
There is also an increasing concern and growing interest to reduce reliance on
fossil fuel and other non-renewable sources of energy. Time is now ripe to opt
for cleaner and greener fuel. With over 300 clear sunny days available annually
in India, there is a huge potential to tap, store and retrieve solar power – much
more than the current power requirements. However, the actual exploitation of
solar power to meet the energy requirements of the country is insignificant when
compared to other energy resources. Government of India has launched the
Jawaharlal Nehru National Solar Mission (JNNSM) as a major initiative to promote
ecologically sustainable growth while addressing India’s energy security
challenges. The immediate focus of the Mission is on setting up an enabling
environment for solar energy penetration in the country through a multi agency
approach for centralized and decentralized applications of solar energy.

1.2 The use of solar powered systems and devises through application of Solar Photo
Voltaic (PV) and Solar Thermal methods have remained underutilized due mainly to
high unit costs. The key challenge is, thus, to provide an enabling framework for
expanding solar energy markets by bringing down the costs. Against this background,
the Ministry of New and Renewable Energy (MNRE), Government of India has
introduced a Scheme for Solar Off-grid (Photo-voltaic & thermal) and decentralized
applications to promote commercial marketing of solar energy systems and devises
by extending financial incentives in the form of capital and interest subsidy on loans
availed from financial institutions by the target clientele. Thus the scheme provides
 for routing the capital subsidy and the interest subsidy on bank loans availed by the
clients from the banking system for solar energy conversion/ user systems and
devises under this scheme through National Bank for Agriculture and Rural
Development (NABARD). “The Capital Subsidy – cum- Refinance Scheme for
installation of solar off-grid (photovoltaic & thermal) and Decentralised
Applications” is being introduced to enable the banking system (Commercial Banks
and RRBs eligible for drawing refinance from NABARD) to avail of the financial
resources including the subsidies on behalf of their borrowers for creation of relative
assets.

2. Objectives

The main objectives of the scheme are to:

- promote off-grid applications of solar energy (both PV and Solar Thermal)
- create a paradigm shift needed for commorditization of off-grid solar applications
- encourage replacement of non-renewable energy sources like fossil fuels,
kerosene and diesel with solar energy to meet the energy requirements.

3. Scope/Coverage of the Scheme

3.1 Phasing of the Scheme

The currency of the scheme will be co-terminus with phase-I (initially upto March
2013) of the Jawaharlal Nehru National Solar Mission and would be applicable to
all parts of India and will cover projects specifically approved by the Project
Approval Committee of MNRE.

3.2 Pre-approved Models/ Systems

MNRE in consultations with IREDA and NABARD has finalized a list of 11 model
projects together with technical and financial parameters appended to these
guidelines (Appendix -1) and these models would be deemed to have been
approved by the PAC for financing by the banks.
3.3. MNRE has also approved the financing of Flat Plat and Evacuated Tube
Collector based solar water heating systems manufactured / installed by the BIS
approved manufacturers of the system with the same terms and conditions, by
the banks, with capital subsidy and refinance support from NABARD.
3.4 The systems to be financed under this scheme should conform to the
conditions/ stipulations laid down in the projects and more specifically under the
General Specifications and Terms and conditions (Appendix-2) and can be
financed without seeking prior approval from the PAC. A list of short listed
manufacturers of the Systems for Solar Photovoltaic Lighting systems and the
solar water heating systems eligible to participate in the Scheme alongwith their
geographical spread is also enclosed to facilitate financing under the scheme and
to ensure proper after-sale service to the borrowers. Purchase of systems
manufactured by companies not listed therein will require prior approval by
MNRE.

4. Eligible Institutions

All Commercial Banks (including private commercial banks) and Regional

Rural Banks which are eligible to avail of refinance facilities from NABARD
would be covered under this scheme subject to their satisfying the eligibility
criteria for refinance as may be stipulated by NABARD from time to time. Funds
towards meeting the subsidy and refinance requirements under the scheme
would be provided to NABARD by IREDA. Projects to be eligible for funding
support under the Scheme will need prior approval from the Project Approval
Committee of MNRE. The model projects appended to these guidelines
(Appendix-1) and the Flat Plat and Evacuated Tube Collector based solar water
heating systems indicated above would, however, be deemed to have been
approved by the PAC and the financing banks can finance units conforming the
conditions/ stipulations laid down in the model projects and more specifically
under the General Specifications and Terms and conditions (Appendix-2) without
seeking prior approval from the PAC. A list of short listed manufacturers of the
Systems for Solar Photovoltaic Lighting and solar water heating systems and
meeting other small electrical needs to participate in the Scheme is also enclosed
for the guidance of the participating Banks.

5. Capital Subsidy

The quantum of capital subsidy and refinance would be made available as per the
specifications of MNRE/ IREDA from time to time. Currently the capital subsidy would
be to the extent of 30% of the benchmark cost subject to the boundary conditions
indicated in. For the year 2010-11, the benchmark price for photo voltaic with battery
back-up is considered as ` 300 per Watt Peak (Wp). In respect of the systems which do
not use storage battery such as water pumping systems, the installed PV system cost
would be considered subject to a cap of ` 210 per Wp. Capital subsidy to be released will
have to follow the fresh benchmarks to be indicated by MNRE for this purpose. For
Evacuated Tube Collectors (ETCs) based solar water heating systems, capital subsidy
will be limited to ` 3000 per square metre of collector area while for Flat Plate Collectors
(FPCs) with liquid as the working fluid, the subsidy will be limited to ` 3300 per square
metre. For flat Plate Collectors with air as the working fluid, the capital subsidy is
limited to ` 2400 per square metre of collector area.

6. Release of Capital Subsidy

The eligible capital subsidy would be released upfront to the banks on receipt of the
drawal application format (Annexure-1) after sanction of the loan by the bank. The
capital subsidy component would, however, be released to the suppliers on behalf of the
borrower by the financing Banks only after satisfactory installation and commissioning of
the system. However, in order to enable the borrowers to access the benefit of the capital
subsidy, the loan repayment period would have a minimum lock in period of 3 (three)
years from the date of disbursement of the first instalment of the loan.

7. Margin Money, Loan Period and Rate of Interest on Loan

The borrowers are required to bring in 20% of the cost of the project as the margin
money for accessing credit facilities from banks to acquire the assets. The loans to cover
the balance (within the ceilings specified against each asset) after reducing the eligible
capital subsidy, would be extended with a repayment period not exceeding 5 years and
would carry an interest rate of 5% p.a. No interest will, however, be charged by the
financing banks on the capital subsidy component.

8. Security

The loans extended under the scheme would be secured as per the existing RBI
guidelines in this regard.

9. Release of Refinance and Repayment Schedule

The loan amount as per the eligibility availed by the target participants will be repayable
in suitable instalments not exceeding 5 years. The banks may fix the repayment schedule
of the loan having regard to the household cashflow of the borrowers and the life of the
assets so as to ensure full repayment of the loan alongwith interest thereon within five
years. The banks would be eligible to draw 100% of the loan outstanding (excluding the
capital subsidy) as refinance from NABARD on an automatic basis, (subject to the
maximum loan amount indicated in Annexure I) subject to usual conditions governing
release of refinance from NABARD. The refinance would carry an interest rate of 2%
p.a. The refinance claims under the scheme are to be preferred in the drawal application
formats appended hereto. The financing banks may prefer refinance claims on a monthly
basis (eg. loans disbursed by banks from 15th to next 15th can be claimed by say, 25th of
the month and refinance will be released to banks as far as possible within next 3-4
working days if the applications are otherwise in order). Repayment of refinance
alongwith interest would be made by the banks to NABARD on a half-yearly basis i.e. as
on 31 July and 31 January every year (in respect of repayments fallen due during the
immediately preceding 6 months). Penal interest as per the existing policy of NABARD
would be applicable for default in repayment of the refinance as per the existing
instructions of NABARD.

10. Monitoring

The financing banks will have to maintain separate records for loans/ subsidy
extended under the scheme and the details will have to be submitted to
MNRE/NABARD/ IREDA as and when required. MNRE/NABARD/ IREDA will also
have the right to inspect the books of accounts pertaining to such accounts
whenever required.
 Appendix-1
Technical and Financial Parameters of Home Lighting Systems (pre-approved PV
models) to be financed

Indicative capability of Max. Loan

Photo the system Maximum amt. ( `)
Voltaic Lighting load/ other Capital bearing
Module 12 V Battery loads and operation Indicative Subsidy interest @
MODEL (Wp) (AH) duration Cost ( `) eligible ( ` ) 5%
I 10 10 10 W/4 hour 3000 900 1500
10 W/8 hour; 20 W/4
II 18 20 5400 1620 2700
hour
10 W/12 hour; 30 W/4
III 37 40 11100 3330 5550
hour
20 W/8 hour; 40 W/4
IV 50 60 15000 4500 7500
hour
20 W/12 hour; 30 W/8
V 70 70 hour; 50 W/4 hour; 60 21000 6300 10500
W/4 hour
VI 85 120 40 W/8 hour 25500 7650 12750

VII 100 120 30 W/12 hour 30000 9000 15000

40 W/12 hour; 50 W/8
VIII 120 135 36000 10800 18000
hour
IX 150 150 60 W/8 hour 45000 13500 22500

X 180 180 50 W/12 hour 54000 16200 27000

XI 200 2 x 120 60 W/12 hour 60000 18000 30000

The total cost, the maximum capital subsidy and the maximum eligible quantum of subsidized loan have been
worked out on the basis of the benchmark cost of ` 300/- per Wp for 2010-11 prescribed by MNRE. In case the
actual cost of the system is less than the indicative costs mentioned above, the capital subsidy and loan
eligibility will be calculated @ 30% and 50% respectively of the actual cost.
 Appendix 2

GENERAL SPECIFICATIONS & TERMS AND CONDITIONS UNDER THE “THE

CAPITAL SUBSIDY – CUM- REFINANCE SCHEME FOR INSTALLATION OF SOLAR
OFF-GRID (PHOTOVOLTAIC & THERMAL) AND DECENTRALISED APPLICATIONS”

1. The models could be home lighting systems or inverter based

systems capable of handling general AC loads.

2. Manufacturers to provide Compact Fluorescent lamps (CFLs) of 9

W/11 W for home lighting systems.

3. The battery will be lead-acid of flooded electrolyte type, positive

tubular plate and low maintenance.

4. Inverter should be of quasi sine wave/sine wave type.

5. PV module (s) shall contain crystalline silicon solar cells.

6. PV modules must be warranted for their output peak watt

capacity, which should not be less than 90% at the end of 10 years
and 80% at the end of 25 years.

7. The balance of systems provided must be warranted against any

manufacturing/ design/ installation defects for a minimum period
of 5 years.

The manufacturer has to give an undertaking with the invoice

(Annexure-2) that the system offered meets the Technical requirements/
standards contained in ANNEXURE-3 of the MNRE guidelines Ref.
5/23/2009 – P&C Dated: 16.06.2010 on off grid SPV power plant
systems under National Solar Mission.
 APPENDIX -1A

BOUNDARY CONDITIONS FOR SUPPORT TO OFF-GRID SOLAR PV

APPLICATIONS

1. Individuals
A. All applications except 1B 1 kWp Capital Subsidy
B. Pumps for irrigation and community 5 kWp &
drinking water Interest Subsidy
2. Non-commercial entities
A. All applications except 2B 100 kWp per site Capital Subsidy
B Mini-grids 250 kWp per site &
Interest Subsidy
3 Industrial/Commercial entities
A. All applications except 3 B 100 kWp per site Capital Subsidy
B. Mini-grids for rural electrification 250 kWp per site or
Interest Subsidy

Scale of Capital Subsidy :

Based on benchmarking annually Rs.90/Wp With battery storage
Rs.70/Wp Without battery
storage
Scale of Interest Subsidy :
Soft loan @ 5% p.a. On the amount of
project cost
Less promoters’
contribution
Less capital subsidy
amount

Use of the best/competitive and innovative technologies available globally would be

allowed, subject to standards and technical parameters, laid down by MNRE.
To meet unmet community demand for electricity or in unelectrified rural areas,
standalone rural SPV power plants with battery storage in a micro grid mode/local
distribution network, would be provided Rs.150/Wp of capital subsidy AND soft loan at
5%.
 APPENDIX-1B

BOUNDARY CONDITIONS FOR SUPPORT TO OFF-GRID SOLAR THERMAL

APPLICATIONS

S.No. Solar Collector type Capital subsidy / Collector

area (Rs / sq.m.)
1 Evacuated Tube Collectors (ETCs) 3000
2 Flat Plate Collectors (FPC) with 3300
liquid as the working fluid
3 Flat Plate Collectors with air as the 2400
working fluid
4 Solar collector system for direct 3600
heating applications
5 Concentrator with manual tracking 2100
6 Non-imaging concentrators 3600
7 Concentrator with single axis tracking 5400
8 Concentrator with double axis 6000
tracking

1. The capital subsidy/unit collector area, as given above, is based on 30% of the
benchmark costs which would be reviewed annually. Capital subsidy would
be computed based on the applicable type of solar collector multiplied by the
collector area involved in a given solar thermal application/project.
2. Besides the capital subsidy as proposed above, the pattern of support could
include a soft loan at 5%, as under :

a) Soft loan @ 5% interest would be available, inter alia, for balance cost
which may comprise installation charges, cost of civil work for large
systems and costs of accessories (viz. insulating pipeline, electric
pump, controllers and valves, additional water tanks, blower for air
heating systems, drying trays for solar dryers, steam system, etc.), etc.
b) To meet unmet demand for electricity and thermal energy or in un
electrified rural areas, Solar thermal power plants and local
distribution network, would be provided capital subsidy of 60% AND
soft loan at 5%. These could be in either stand alone or co / poly
generation mode.
 ARF – FORMAT
Loans under JNNSM Scheme of GOI

DRAWAL APPLICATION FOR SANCTION/ RELEASE OF REFINANCE

UNDER JNNSM SCHEME OF GOI UNDER AUTOMATIC REFINANCE
FACILITY (ARF)

Ref. No. Date:

From (Name and Address of the Financing Bank)

To

The Chief General Manager/ OIC

NABARD Regional Office,

_______________________

Dear Sir,

Application for Sanction/ Release of Refinance under the Scheme for

Solar Off-grid (Photo-voltaic & thermal) and decentralized applications
under the Jawaharlal Nehru National Solar Mission of the Government
of India

We hereby apply for sanction and release of refinance aggregating to `

………………(Rupees …………………only) in respect of financial assistance
sanctioned and disbursed by us to our constituents, the particulars in respect of which are
furnished in the Annexure. We agree to repay the refinance availed of by our Bank as per
the repayment schedule appended to this drawal application. We also agree that the
repayment schedule(s), if revised and communicated by NABARD, in respect of
refinance claimed in this application will be scrupulously followed by us.

2. We certify that:

i. The individual loan proposal conforms to the policy, procedures and

guidelines laid down by NABARD under the captioned scheme from
time to time.
ii. The proposals have been appraised by us/ our branches and are found
to conform to the technical and financial parameters laid down under
the captioned scheme guidelines of NABARD.
iii. We have not applied earlier for capital subsidy/ refinance covered by
this drawal application from NABARD or any other institution
 iv. The refinance amount claimed is exclusive of the recoveries/ capital
subsidy/margin money received or receivable.
v. We have obtained consent letters from our constituents to the effect
that they have no objection to our furnishing to NABARD all such
information as may be required from time to time.
vi. MNRE/NABARD and IREDA will have the right to seek any
information as they may require from time to time and also for
inspection of the unit.
vii. NABARD shall have the right to inspect books and loan accounts
covered under this application and /or call for copies of the related
memoranda/ sanction notes/ any other relevant information in this
behalf.
viii. Loans granted under DRI scheme have been excluded.
ix. All the units financed under the scheme in respect of which refinance
is claimed are eligible under Jawaharlal Nehru National Solar Mission
scheme of Government of India for subsidy/ refinance.
x. The loans sanctioned to the borrowing units does not exceed the
maximum loan limits prescribed under the captioned scheme

3. We further certify that the amount of refinance already availed by us and

outstanding as on date together with the proposed availment would be within
the borrowing limit of our Bank.
4. We also certify that the rate of interest charged on the loan amount conform to
the rates stipulated by NABARD under the captioned scheme.
5. We agree that if on verification of our records and of our constituents,
NABARD comes to the conclusion that the accounts against which the
disbursement of capital subsidy/ loan does not conform the guidelines laid
down by it from time to time, NABARD will have the right to recall the entire
capital subsidy/ refinance disbursed in respect of such accounts on such
conditions as stipulated in the General Refinance agreements.

For and on behalf of the financing Bank

Signature of the authorized officer with designation and rubber stamp.

Enclosure
Date :
Place :
A. Repayment Schedule

From Borrower to Bank From bank to NABARD

(Repayment received during) (Repayable as on)
Date Amount (`) Date Amount (`)
01 July … to 31 31 January …..
December …..
01 January …. To 31 July ……
30 June ………
01 July … to 31 31 January …..
December …..
01 January …. To 31 July ……
30 June ………
01 July … to 31 31 January …..
December …..
01 January …. To 31 July ……
30 June ………
01 July … to 31 31 January …..
December …..
01 January …. To 31 July ……
30 June ………
01 July … to 31 31 January …..
December …..
01 January …. To 31 July ……
30 June ………
 Annexure-1
DRAWAL APPLICATION FOR CAPITAL SUBSIDY UNDER THE CAPITAL
SUBSIDY-CUM-REFINANCE SCHEME FOR INSTALLATION OF SOLAR
OFF-GRID (PHOTO-VOLTAIC AND THERMAL) & DECENTRALISED
APPLICATIONS UNDER THE JAWAHARLAL NEHRU NATIONAL SOLAR
MISSION
Name of the Bank:
Period of the Claim (Month/Quarter) :
Details of the claim.
Name of the Branch:--------------- District:---------------- State:------------------
Sr.No. Pre-approved Model 1 2 3 4 5 … ….. 11 Solar Total
Nos. Water
Heating
System
1 2 3 4 5 6 7 8 9 10 11 12
Individuals
Groups
Category - SC
- ST
- OBC
Minority
Community
No. - Female
Total cost of the system
for units claimed
Capital Subsidy Amount
eligible for units claimed
(`)
Loan Amount excluding
capital subsidy for units
claimed (`)
Margin Money by the
borrower for the units
claimed (`)

Certified that all the terms and conditions stipulated under the captioned scheme are satisfied in
case of all loans for which capital subsidy is claimed with this application and that the capital
subsidy claimed are within the monetary limits prescribed under the scheme.

We have not applied earlier for capital subsidy covered by this drawal application from
NABARD or any other institution
Capital subsidy Account:

Capital Subsidy Amount Received from NABARD

1. Drawal Application No. dated :`
2. Drawal Application No. dated :`
3. ………………….
__________________________________________________________________
Total Capital Subsidy Received :`

Capital Subsidy Disbursed:

1. Against Claims made under Drawal Applcation
No.

:`
2. Against claims made under Drawal Application
No.

:`
3. ……………… :`

Total Capital Subsidy Released :`

Balance Capital subsidy with the Bank (as on ): `

Total Capital subsidy claimed with this application :`

(Signature of the authorized officer of the Bank)

Date and Seal of the Bank
 Annexure-2

(On the letterhead of the Agency/ System provider)

PROFORMA FOR DECLARATION BY THE AGENCY SUPPLYING THE

OFF-GRID SOLAR APPLICATION SYSTEM

It is certified that I/we have read the guidelines issued by the Ministry vide
5/23/2009/P&C dated 16th June, 2010 and the related provisions/terms and
conditions for availing financial support from the Ministry of New and
Renewable Energy and I/we agree to abide by these guidelines and related terms
and conditions.

I/we confirm that the proposed solar PV system(s) for which subsidy/ subsided
loan is being claimed have not been installed/supplied earlier .

A detailed site survey has been done/or will be undertaken to identify the
beneficiary before actual supply and installation takes place.

This is to certify that the various components of the SPV systems will conform to
the Relevant Standards, as mentioned in the Guidelines for Off-grid and
Decentralized Solar Applications (Annexure-3) for SPV modules and components
under JNNSM.

Copies of the Relevant IEC/ BIS Certificates are enclosed.

Signature _____________
Name & Designation
of Authorized Signatory

Address of the Agency/System provider

Seal

Place:
Date:

SOLAR STATEMENT PROFORMA

All India List of Distributors Districtwise

List of BIS approved Manufacturers of FPC based Solar Water Heating Systems