Empowering MSMEs Through Green Energy: Gujarat’s Interest Subsidy Support for Captive Renewable Power

As energy prices rise and industries seek sustainable solutions, Gujarat has taken a forward-looking step to support manufacturing enterprises in their transition to renewable energy. Through the Aatmanirbhar Gujarat Assistance Scheme for MSMEs, the state government encourages units to install solar, wind, hydro, or other renewable power systems for their own consumption, making operations both economical and eco-friendly. 

This start is not just about sustainability; it is about financial empowerment. By offering an interest subsidy on term loans used for setting up Captive Renewable Power projects, the scheme helps MSMEs to reduce borrowing costs while securing long-term stability. 

Why the Scheme Matters  

For many manufacturing units, electricity isn’t just a monthly expense. It’s a major factor that decides how competitive their product can be. Renewable energy offers a practical way to cut these costs while ensuring a consistent power supply. Yet, the upfront cost of building a captive solar or wind system often stops small and medium enterprises from moving forward with the idea. 

This is precisely the gap the Gujarat government aims to bridge. Through this scheme, manufacturing MSMEs can claim an interest subsidy on term loans taken for setting up all renewable plants for their own use. 

In simpler terms, MSMEs can save in two ways – lower electricity bills and reduced loan interest costs – all while contributing to a cleaner, greener industrial future.  

SDS Fin Advisory LLP provides professional guidance to help you secure a solar loan covering 100% of the project cost, along with applicable interest subsidy benefits. 

Assistance of Interest Subsidy to all Micro, Small, and Medium Enterprises  

At SDS Fin Advisory LLP, we help businesses evaluate their potential subsidy benefits and structure their loans smartly—so they can make the most of every policy advantage available. 

Who Can Apply 

The scheme specifically targets manufacturing MSMEs located anywhere in Gujarat. To qualify, the enterprise must: 

• Be registered as an MSME under valid state guidelines. 

• Install a new renewable energy plant for captive consumption – solar, wind,  hydro, or hybrid. 

• Use the generated power exclusively for its own manufacturing operations(not for sale). 

• Maintain valid insurance for the plant and related assets. 

• Ensure the project is a first-time installation under this policy. 

Service sector enterprises are not eligible under this scheme. 

Before initiating the investment, SDS Fin Advisory LLP assists MSMEs in verifying eligibility and preparing the project plan as per policy norms – ensuring that the project qualifies for the full subsidy. 

Eligible Renewable Energy Options 

MSMEs have the flexibility to choose from a range of renewable energy technologies, including: 

• Solar Power Systems (rooftop or ground-mounted) 

• Wind Power Projects 

• Hydro Power Systems 

• Hybrid or Other Approved Renewable Technologies 

• Captive Desalination or Power Generation Units 

SDS Fin Advisory helps clients select the most cost-effective renewable option, taking into account production needs, energy patterns, and financial feasibility. 

Key Financial Conditions 

Even with combined state and central subsidies, MSMEs must bear at least 2% of the interest from their own funds. 

Defaults beyond 90 days, or unclear loan documentation, can lead to disqualification — which is why SDS Fin Advisory’s compliance and documentation team ensures all records are properly maintained from the start. 

Dual Benefits for Expansion Projects 

The scheme also supports units that are both expanding and investing in renewable power. 

For example, a factory in a Category 3 Taluka can get a 5% interest subsidy on its expansion term loan and another 5% on its solar loan — effectively doubling the advantage. 

SDS Fin Advisory LLP helps clients plan both projects strategically, allowing them to utilize multiple schemes simultaneously for greater financial efficiency. 

Why Choose SDS Fin Advisory LLP? 

• Sector-Specific Financial Support: We first look at your project and see which scheme really applies to your sector  – no guesswork. 

• Interest Rebate: if you’ve got a term loan lined up, we’ll tell you straight away how to claim the government relief so your EMI feels lighter. 

• Paperwork: all the forms and proofs… we fill, attach, and submit them, saving you all that running around. 

• Govt Follow-ups: We already know the desks and officers, so your file doesn’t sit untouched. 

• Forecasts: before you spend anything big, we roughly tell you what incentive you can expect back, which helps a lot for cash-flow planning. 

• Keeping Track: we watch deadlines, call or mail when something’s due, and keep nudging till the file moves. 

• One Person to Call: you won’t have to explain things to a new person every time – you get one advisor who knows your project inside out. 

FAQs 

Q1. Can existing units claim this subsidy? 

Yes, existing units are eligible under the policy.  

Q2. Is the third-party sale of power allowed? 

No. The power generated must be for captive use only. 

Q3. What happens if an MSME already receives a central subsidy? 

The state subsidy will be adjusted so that the enterprise continues to pay at least 2% interest from its own funds. 

Q4. Can service enterprises apply? 

No. The scheme is exclusively for manufacturing MSMEs in Gujarat. 

Q5. How does SDS Fin Advisory help with documentation? 

SDS prepares a detailed project report, ensures proper loan sanctioning structure, and manages complete paperwork for application and claim submission. 

Conclusion

The Interest Subsidy scheme for Captive Renewable Power Plant is a visionary step by the Government of Gujarat to support industries in sustainable energy. For MSMEs, it brings dual advantages – cost savings and environmental responsibility. 

However, to truly benefit from correct documentation, timely application, and compliance are critical- and this is exactly where SDS Fin Advisory LLP adds value. With in-depth knowledge of industrial finance and subsidy management, SDS helps MSMEs turn government incentives into real business advantages. 

If you are planning to set up a solar or renewable plant for your unit, now is the right time – go green, save costs, and grow sustainability with SDS Fin Advisory LLP by your side.