Exploring Solar Financing Options in Pakistan
Pakistanis are no strangers to the hot and burning sun. The sun can get really harsh for people and it can also lead to power outages. But did you know this sunshine can also be used to provide electricity to your home and save you money? This is possible with the help of solar panels and solar financing options.
Solar panels can absorb the sun’s energy and convert it into electricity which can give you unlimited power. Sounds great, right? However, in the beginning, the overall cost of buying and installing these panels can seem like a lot. This is where the solar financing options and learning about can help you out! This blog will discuss the
Bringing Sunshine Within Reach With Solar Financing Options
If the cost of solar panels are too much for your budget in the beginning, you can go for the solar financing options. Here’s how it works: financial institutions like banks offer loans specifically for purchasing and installing solar panels. After that, you can repay the loan to them for a specific time period, often at a lower interest rate than a traditional personal loan.
One of the main banks that promotes solar financing is the State Bank of Pakistan (SBP). The SBP’s Solar Financing Scheme acts as a facilitator, encouraging banks to offer solar loans. This scheme offers benefits like:
- Repayment Tenure: You can typically repay the loan over a period of up to five years, making it easier to manage your finances.
- Down Payment: The scheme allows for a down payment as low as 20% for self-owned premises, making the initial investment more manageable.
- Loan Limits: The scheme sets limits on the loan amount based on your needs, whether residential, commercial, or industrial.
Several commercial banks in Pakistan have different options for solar financing, offering their own solar loan products. Here are a few examples:
Solar Panel Financing Options at Meezan Bank
Eligibility Criteria
- People with Permanent Job: Pakistani, aged 20-60, with a minimum monthly gross salary of PKR 100,000, and at least 2 years with the current employer.
- Contractual Job: Minimum monthly salary of individuals should be of PKR 200,000, with at least 3 years at the current employer.
- Business Individuals: The minimum monthly income should be of PKR 500,000, and have at least 5 years in business.
- For Pensioners: Aged up to 70, with a minimum monthly gross pension of PKR 100,000.
- Amount and Tenure: Financing from PKR 100,000 to PKR 2,500,000 (up to PKR 3,000,000 for premium customers). Tenure ranges from 12 to 60 months.
Down Payment:
- On-grid systems require a down payment of 15%-50% based on credit history.
- Off-grid systems require a down payment of 30%-50%.
Charges:
- Processing charges are PKR 5,000 + FED, with additional documentation and survey charges at actual costs.
Solar Financing Options at Bank Alfalah
Loan Amount
- You can borrow between Rs. 4 KW and Rs. 1,000 KW for your solar power system.
- There’s a maximum loan amount of Rs. 400 million for a single borrower.
Eligibility Criteria
- This program is available for individuals, staff (of preferred companies), commercial businesses, SMEs, and even agricultural businesses.
- You’ll need a clean credit history (CIB report).
- Individuals and staff will need to show income proof and utility bills.
- Businesses will need to be operational for at least 3 years (except for agriculture) and provide utility bills.
Loan Features
- Alfalah Green Energy offers competitive markup rates, as low as 6% per year.
- You can choose a repayment term of up to 5 years, with a 3-month grace period to get started.
- There’s flexibility in how you make your payments – monthly, quarterly, or bi-annually.
Repayment Terms
The repayment period for the loan is flexible. It can range from 1 year to 5 years. This allows businesses to choose a repayment plan that suits their financial situation.
Down Payment
- The down payment required depends on your situation. It’s typically 10% for staff, 20% for owned property, and 25% for rented property.
- The bank may ask for additional security like guarantees or property mortgages depending on the loan amount.
- There’s a one-time processing fee of Rs. 5,000 or 0.2% of the loan amount
Solar Financing Options at Allied Bank
Allied Bank offers solar financing options to help individuals and businesses switch to green energy. This initiative supports the use of sustainable and renewable energy sources.
Loan Amount
- You can borrow between Rs. 200,000 and Rs. 3,000,000 to cover the cost of your solar panel system.
Eligibility Criteria
To be eligible, you must be a Pakistani citizen between the ages of 21 and 59.
There are different requirements for salaried and self-employed individuals:
- Salaried Individuals: You must be a permanent employee with a minimum of two years of experience, have a minimum net monthly salary of Rs. 50,000, and have a banking relationship of at least six months with Allied Bank or another bank.
- Self-Employed Individuals: You must have been in business for at least two years (three years if your bank account is not with Allied Bank) and have a minimum net monthly income of Rs. 75,000 (Rs. 100,000 if your bank account is not with Allied Bank). You’ll also need to show proof of a business relationship with a bank.
Down Payment
- You will need a minimum down payment of 30% of the total loan amount.
Loan Term and Interest
- You can choose a flexible repayment period of up to 7 years.
- The program offers a competitive markup rate of only 6% under a special refinance scheme from the State Bank of Pakistan (SBP).
Other Details
- The application process is designed to be simple and straightforward.
- There are no hidden costs involved.
- A processing fee applies after your loan is approved.
- You will need to provide various documents to apply, including proof of identity, income documents, and property ownership documents.
Solar Financing Options at HBL Microfinance Bank
Eligibility
- Be a Pakistani citizen with a valid CNIC or SNIC.
- Must be 72 years old or younger.
- Business experience might be needed depending on the collateral offered.
Income Requirements
- Businesses:
- Loans under Rs. 150,000: Annual income (after business expenses) must be under Rs. 1,200,000 (subject to change by SBP).
- Loans above Rs. 150,000: No income cap.
- Residential: Annual income (after business expenses) cannot exceed Rs. 1,500,000 (subject to change by SBP).
What You Can Use the Loan For
- Invest in various solar-related needs such as:
- Buying equipment (solar panels, batteries, inverters)
- Installing solar power systems for your business or home
- Upgrading to solar equipment like tube wells
Loan Details
- Borrow up to Rs. 3,000,000.
- Repay the loan over a period of up to 10 years (120 months).
- Choose flexible repayment terms: monthly, quarterly, or half-yearly.
Applying for the Loan
- HBL MfB assesses applications individually, considering your business or residential needs.
- For residential solar solutions, you can apply alone or with a co-borrower.
Finding the Perfect Fit
Choosing the right solar financing option requires you to make a proper choice. Here are some key factors to keep in mind:
- Loan Amount: Consider how much financing you need based on the size of your solar panel system and the solar panel price in Pakistan.
- Repayment Term: Choose a repayment term that fits your budget comfortably.
- Profit/Interest Rate: Compare interest rates offered by different banks to get the best deal.
- Government Scheme: You can also explore the CM Punjab Solar Panel Scheme 2024 Free Solar System to make an informed choice.
Conclusion
Solar financing makes switching to solar power an easy and realistic option for many Pakistanis. Therefore, by taking advantage of these financing options, you can use the sun’s power for your benefit and have your own energy. Start exploring solar financing options today and brighten your life with the power of the grand sunshine!
Next Steps
Ready to learn more? You can contact a solar financing consultant or a reputable solar panel installation company. They can help you determine your solar power needs and guide you about the solar panel price in Pakistan today. This way, you can learn more about the prices and the loan that you will need. You can also use a solar panel calculator to learn about the number of panels you will need and choose a financing option accordingly.