Solfin Sustainable Finance Private Limited, a green-focused non-banking financial company, has launched its Performance-Linked Lease (PLL) offering for commercial and industrial (C&I) customers in Himachal Pradesh and Punjab.
The first projects under the offering have been commissioned for The Sukhjit Starch & Chemicals Limited, a manufacturer of starch, related chemicals and other industrial by-products.
Under the PLL model, C&I customers can adopt solar power with limited upfront capital expenditure. Customer payments are linked to the electricity generated by the solar system, while Solfin manages the asset’s performance and maintenance.
The projects bring together Solfin as the financier, Waaree Energies as the technology provider, and The BrightQ Solutions as the engineering, procurement and construction (EPC) partner.
Puneet Sardana, Senior Vice President – Operations at The Sukhjit Starch & Chemicals, said the performance-linked structure enabled the company to expand its use of solar energy without making a significant upfront investment or taking on power generation and maintenance-related risks.
Under a conventional solar loan, customers typically make fixed monthly repayments. In contrast, the PLL model links payments to the power generated by the solar system. Solfin offers lease tenures of up to 10 years, with the company stating that customers can begin realising savings during the lease period through lower electricity costs and tax benefits associated with accelerated depreciation.
At the end of the lease tenure, ownership of the solar system transfers to the customer, allowing the customer to retain the subsequent savings generated by the system.
The PLL offering is targeted at larger C&I solar installations and provides an alternative financing structure to conventional capital expenditure projects and long-term power purchase agreements (PPAs).
Gaurav Arora, Director & CEO of The BrightQ Solutions, said the Sukhjit project was delivered through a collaboration between The BrightQ Solutions, Solfin and Waaree Energies.
Kunal Kuba, Head of Sales at Solfin, said the company plans to scale the PLL model across industrial markets.
Solfin said it plans to expand the Performance-Linked Lease offering across industrial clusters in India, initially targeting businesses with high daytime electricity consumption.
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