Solfin Launches Performance-Linked Lease for C&I Solar Projects

Solfin Sustainable Finance (Solfin), a green-focused non-banking financial company, has launched its Performance-Linked Lease (PLL) in Himachal Pradesh and Punjab. The first projects under the offering have been commissioned for Sukhjit Starch and Chemicals, a manufacturer of starch, related chemicals and various by-products catering to a wide spectrum of industries.

PLL lets Commercial and Industrial (C&I) businesses adopt solar with minimal upfront capital. Customers pay according to the power the system generates, while Solfin looks after the asset's performance and maintenance.

The projects bring together Solfin as financier, Waaree Energies as technology provider and The BrightQ Solutions as the Engineering, Procurement and Construction (EPC) partner.

Puneet Sardana, Senior Vice President – Operations, The Sukhjit Starch & Chemicals, said, “The performance-linked model enabled us to expand our use of solar energy without making a significant upfront investment or assuming the risks associated with power generation and maintenance. Efficient energy management through an environmentally friendly solution was an important priority for Sukhjit. We are pleased to partner with Solfin and Waaree on this initiative.” 

Gaurav Arora, Director and CEO, The BrightQ Solutions, said, “We are proud to announce the successful installation and commissioning of a solar power project at Sukhjit’s premises.This project was delivered through a strategic collaboration between The BrightQ Solutions (EPC partner), Solfin (financier) and Waaree (technology provider).”

A conventional solar loan has fixed EMIs. Under PLL, customer payments are linked directly to the power the system generates. Solfin offers lease tenures up to 10 years, but the customer does not have to wait for the tenure to be over to realise savings. Electricity cost savings more than offset lease payments, and customers also benefit from tax savings arising from accelerated depreciation. At the end of the tenure, ownership passes to the customer, who then keeps the full savings from the system. 

PLL is designed for larger C&I solar installations. It also gives businesses an alternative to long-term Power Purchase Agreements (PPAs) and capex projects. 

Kunal Kuba, Head of Sales, Solfin, said, "Sukhjit shows the appeal of solar priced on performance, with no significant upfront capex and no long-term power contract. We plan to scale PLL across industrial markets."

Solfin plans to expand PLL across India's industrial clusters, starting with businesses that use a lot of power during the day.