🌿 Green Finance

Green Finance Guide India 2026 — Solar Loans, EV Finance, ESG and Govt Subsidies

By FinMandi Research Team·June 2026·✓ Updated June 2026
🔍 Reviewed by FinMandi Research Team·✓ Sourced from official government portals·✓ Updated June 2026

⚡ Green Finance at a Glance

  • PM Surya Ghar subsidy: Up to Rs 78,000 for 3 kW rooftop solar — 300 units free electricity/month
  • Solar rooftop loan: From 7% p.a. at SBI, Bank of Baroda — no collateral for small systems
  • EV car loan: Lower interest than petrol/diesel cars at most banks — FAME subsidy applicable
  • Green FD: Same rates as regular FD — funds used for renewable energy projects
  • ESG mutual funds: Market-linked returns — invest in environment-friendly companies

All Green Finance Options — Quick Guide

PM Surya Ghar — India's Biggest Solar Subsidy Scheme

PM Surya Ghar Muft Bijli Yojana is the central government's flagship solar scheme launched in February 2024. It targets 1 crore households and gives a direct subsidy of up to Rs 78,000 for installing a 3 kW rooftop solar system. With 300 units of free electricity per month, most households can eliminate their electricity bill completely.

System SizeCentral SubsidyFree Units/MonthApprox Net Cost
1 kWRs 30,000100–120 unitsRs 30,000–50,000
2 kWRs 60,000200–240 unitsRs 40,000–70,000
3 kWRs 78,000300–360 unitsRs 70,000–1.2 lakh

EV Car Loan — Green Vehicle Finance

Electric vehicle loans in India typically carry lower interest rates than petrol or diesel car loans at most banks. Combined with the FAME-II subsidy (up to Rs 1.5 lakh for electric cars), EVs are becoming more affordable. SBI, HDFC, Canara Bank and Mahindra Finance all offer dedicated EV loan products.

BankEV Loan RateRegular Car Loan RateSaving
SBI8.65%9.15%0.50% lower
Bank of Baroda8.70%9.20%0.50% lower
Canara Bank8.70%9.25%0.55% lower
HDFC Bank8.80%9.10%0.30% lower

Green Fixed Deposits — Same Returns, Better Purpose

Green FDs work exactly like regular FDs — same interest rate, same DICGC insurance coverage, same tax treatment. The only difference is the bank uses your deposit funds specifically for environment-friendly projects like renewable energy, clean water and sustainable agriculture.

Who offers Green FDs in India? SBI Green Rupee Term Deposit, HDFC Green Deposits, Yes Bank Green FD and several small finance banks. Interest rates are identical to their regular FD rates — there is no penalty for choosing green.

ESG Mutual Funds — Invest in India's Green Future

ESG (Environmental, Social, Governance) mutual funds invest only in companies that meet sustainability criteria. In India, top ESG funds include Mirae Asset ESG Sector Leaders, Axis ESG Equity Fund and Quantum India ESG Equity Fund. Returns are market-linked and comparable to regular equity funds over a 5+ year horizon.

Official Sources

☀️ pmsuryaghar.gov.in → 🏠 solarrooftop.gov.in → ⚡ FAME-II Portal →

Frequently Asked Questions

PM Surya Ghar gives Rs 30,000 for 1 kW, Rs 60,000 for 2 kW and Rs 78,000 for 3 kW rooftop solar systems. Many states also offer additional subsidies on top of this. Apply at pmsuryaghar.gov.in — it is free to apply and no advance fee is required.
Yes. Most PSU banks offer EV loans at 0.25% to 0.55% lower interest rate than regular car loans. SBI, Bank of Baroda and Canara Bank have dedicated green vehicle loan products with preferential rates to encourage EV adoption.
A Green FD (Green Fixed Deposit) works exactly like a regular FD — same interest rate, same bank, same DICGC insurance up to Rs 5 lakh per depositor. The only difference is the bank uses these funds for environment-friendly projects. It is completely safe and there is no difference in returns.
There is no specific Section 80C or 80D deduction for solar rooftop loans. However, if you install solar panels for your business premises, the interest on the loan may be deductible as a business expense. For residential installations, the PM Surya Ghar subsidy (up to Rs 78,000) is a direct cash benefit — not a tax deduction.

⚠️ Disclaimer: All information is for educational purposes only. Subsidy amounts, loan rates and scheme details are based on publicly available data as of June 2026 and may change. FinMandi is an independent information platform and is not affiliated with the Government of India or any bank. Always verify on official portals before applying.