RBI rate hike and a Rs 2 lakh solar loan: about Rs 25 more a month
The RBI raised its repo rate by 0.25 points on 7 Oct. Rooftop solar loans of up to Rs 2 lakh under the national scheme are tied to that rate, and on a 10-year loan the change works out to about Rs 25 more a month.
What happenedPM Surya Ghar loan interest rate: repo plus 0.50%
On 7 Oct 2026 the Reserve Bank of India's Monetary Policy Committee raised the repo rate by 25 basis points, from 5.25% to 5.50%. Business Today reported that this is the first increase since February 2023, and that the committee moved its stance from neutral to “calibrated tightening”.
This reaches rooftop solar directly. Central Bank of India's page for the national rooftop scheme prices loans of up to Rs 2 lakh at “Repo rate+0.50%”, shown as 5.75% at present. Mercom described the scheme rate the same way in August. Above Rs 2 lakh, Central Bank links the rate to its home loan rate instead, so the simple repo-plus rule covers only the smaller loans.
A repo-linked loan does not change on the day of the announcement. It moves when the bank resets the rate under the loan's terms. If the margin stays at 0.50 points, these loans would go from 5.75% to 6.00% at that reset.
The arithmetic for one example: a Rs 2 lakh loan over 10 years costs about Rs 2,195 a month at 5.75% and about Rs 2,220 at 6.00%. That is about Rs 25 more a month, or Rs 300 more a year. Over 10 years, total interest goes from about Rs 63,400 to about Rs 66,400, roughly Rs 3,000 more. Some banks keep the EMI the same and stretch the tenure instead.
| Rate | EMI a month | Total interest |
|---|---|---|
| 5.75% (now) | Rs 2,195 | Rs 63,446 |
| 6.00% (after reset) | Rs 2,220 | Rs 66,449 |
Standard reducing-balance EMI, 120 monthly payments. An example, not a quote or advice.
What our tracker showsRooftop solar applications after the October 2026 repo hike
We read the national PM Surya Ghar portal every day. The 5, 6 and 7 Oct readings were taken before the RBI announcement, and the 8, 9 and 10 Oct readings after it.
New applications across India were 29,758, 36,623 and 40,748 in the three readings before the news, and 38,104, 40,001 and 34,435 in the three after. In the nine readings from 29 Sep to 7 Oct, the daily figure ranged from 28,778 to 48,074, so the readings after the hike sit inside the usual range. The 5 Oct reading covers a Sunday, which is usually quieter. Punjab's three readings after the news show 44, 40 and 47, close to its usual pace of about 50 a day.
We would not expect anything else yet. Few loans, if any, will have been reset in three days, and three readings are far too few to judge an effect. If the higher rate changes behaviour at all, it would show later, and first in states where many rooftops are bought on loans.
Darker bars: readings taken after the 7 Oct announcement. The 5 Oct reading covers a Sunday. Source: Solentra's daily readings of the national PM Surya Ghar portal.
See the numbers
| Reading | applications |
|---|---|
| 5 Oct | 29,758 |
| 6 Oct | 36,623 |
| 7 Oct | 40,748 |
| 8 Oct | 38,104 |
| 9 Oct | 40,001 |
| 10 Oct | 34,435 |
What it could mean for IndiaRepo-linked solar loans and the wider power sector
Since 2019, most new floating-rate home loans in India have been linked to an outside benchmark, usually the repo rate, so a repo move now reaches borrowers fairly directly. Scheme solar loans are written the same way, with the margin fixed at 0.50 points, so an RBI decision could flow almost straight into what a household pays for a small rooftop. That works in both directions: the same link made these loans cheaper while rates were being cut in 2025, and it now makes them a little dearer.
Mercom reported in August that 17.5 lakh installations under the scheme had been completed with loan finance, about a third of the more than 50 lakh households the scheme counted then. So a rate move touches lakhs of households. At Rs 2 lakh, though, the change is small, and for a home it may matter less than the upfront cost, the time the DISCOM takes and trust in the installer. That may be why we would not expect rate news to show up quickly in application numbers.
The effect could be larger further up the power sector. Commercial rooftops, battery systems for businesses and large solar and storage parks borrow far bigger sums over long periods. For them, a quarter point on a loan of many crores adds up over 15 or 20 years, and a tightening cycle could nudge project costs and tariff bids up at the margin. Battery storage, which India needs to carry daytime solar into the evening, is capital-heavy, so it may feel the same pressure. We do not guess at the RBI's next move, but the scheme loan rate moves with it, whichever way it goes.
What it means for youEMI on a Rs 2 lakh solar loan over 10 years
If you already have a scheme loan of up to Rs 2 lakh: nothing changes today. Your bank will apply the new rate at its next reset. Ask whether your EMI will rise or your tenure will lengthen. On our Rs 2 lakh, 10-year example, the change is about Rs 25 a month at most, and less if you are a few years into the loan.
If you are planning a rooftop: a move of this size is unlikely to change the sums on its own. The size of the system, the quality of the panels and inverter, and the bill you expect to save will usually matter more. This is arithmetic, not financial advice, and only your bank can give your actual rate. Solentra does not arrange loans.
If you are an installer or dealer: you may hear “loans just got costlier” this month. Give the customer the number and let the bank give the quote. Do not say “from today”; the change comes at the bank's reset. And loans above Rs 2 lakh follow different rules at some banks, so the example does not stretch to bigger systems. You can watch for any shift on our daily tracker.
Sources
- Business Today, RBI MPC: Repo rate hiked by 25 bps to 5.5%, rate cut unlikely in near term, .
- Central Bank of India, PM Surya Ghar loan scheme page, .
- Mercom India, PM Surya Ghar Powers 5 Million Homes, Total Capacity Hits 15 GW, .
- MNRE, National Portal for Rooftop Solar, PM Surya Ghar national portal, read daily by Solentra since 29 Aug 2026, .
The Solar Brief puts public reports in our own words and reads them against Solentra's own daily record of the PM Surya Ghar national portal. Where we say what something could mean, that is our reading, not a forecast. Nothing here is financial, loan or legal advice.
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