Published Feb 6, 2026 4 Min Read

 
 

Solar power is the energy harnessed from sunlight and converted into electricity or heat. It is a clean, renewable source of energy that reduces reliance on fossil fuels. Solar power is used in homes, businesses, industries, and even large-scale solar farms to supply electricity, heat water, and power equipment efficiently. With rising energy costs and environmental concerns, understanding solar power is becoming increasingly important.

What is solar power?

Solar power refers to the process of capturing energy from the sun and converting it into usable electricity or heat. This can be achieved through photovoltaic (PV) panels that generate electricity directly from sunlight, or through solar thermal systems that use sunlight to heat water or air. Solar power systems can range from small rooftop installations to massive solar farms generating electricity for entire cities.

History of solar power

Solar energy has been studied and used for centuries:

  • Ancient times – Civilisations used mirrors or magnifying glasses to concentrate sunlight for heating and fire-starting.
  • 19th century – The photovoltaic effect was discovered by Edmond Becquerel, laying the foundation for modern solar panels.
  • 1950s – Practical solar cells were developed, initially to power satellites.
  • 1970s – Solar power began being adopted for commercial electricity generation.
  • 21st century – Rapid growth in solar energy adoption due to falling costs, technological advances, and environmental awareness.

How does solar power work?

Solar power systems convert sunlight into electricity or heat through several steps:

  • Sunlight absorption – Photovoltaic (PV) panels capture sunlight and generate direct current (DC) electricity.
  • Conversion to usable electricity – An inverter converts DC electricity into alternating current (AC) suitable for homes and businesses.
  • Energy storage – Excess electricity can be stored in batteries for use when sunlight is unavailable.
  • Solar thermal systems – Mirrors or panels concentrate sunlight to produce heat, which can drive turbines or heat water.

This process allows solar power to provide reliable electricity and reduce dependence on conventional power sources.

Photovoltaics (PV) vs. concentrated solar power (CSP)

FeaturePhotovoltaic (PV)Concentrated solar power (CSP)
PrincipleConverts sunlight directly into electricityUses mirrors or lenses to concentrate sunlight, producing heat, then electricity
Efficiency15–22% typically20–25% typically
InstallationRooftops, small or large arraysUsually large-scale solar farms
StorageBatteries required for off-grid useThermal storage possible
CostModerate and decreasingHigher initial investment

Both systems have advantages depending on location, scale, and energy needs.

Active vs. passive solar energy systems

Solar energy can also be categorised by how it is collected and distributed:

  • Active systems – Use mechanical or electrical devices, such as pumps or fans, to collect, store, and distribute solar energy. They are commonly used for electricity generation.
  • Passive systems – Rely on building design, orientation, and materials to naturally collect and distribute heat without moving parts. They are primarily used for heating and cooling buildings.

Choosing the right system depends on your energy goals and site conditions.

Major benefits of switching to solar energy

Adopting solar energy provides several advantages:

  • Lower electricity bills – Generate your own power and reduce reliance on the grid.
  • Environmental benefits – Cuts greenhouse gas emissions and reliance on fossil fuels.
  • Energy independence – Provides a renewable, reliable energy source.
  • Government incentives – Many countries, including India, offer tax benefits, subsidies, and support schemes.
  • Minimal maintenance – Solar panels typically require little upkeep and have a lifespan of 25 years or more.

Future of solar power

The future of solar energy is promising, driven by technology and global demand:

  • Higher efficiency – New solar cell technologies continue to improve energy conversion rates.
  • Smart grid integration – Solar power can be combined with digital grids for better energy management.
  • Hybrid renewable systems – Combining solar with wind, hydro, or batteries ensures a stable energy supply.
  • Global adoption – Falling costs and policy support are accelerating solar energy use in India and worldwide.

Solar energy is expected to play a central role in achieving sustainable, low-carbon energy goals globally.

Conclusion

Solar power is a clean, reliable, and cost-effective solution for electricity and heating needs. Businesses and households can invest in solar projects through business loan options while checking the business loan interest rate and using a business loan eligibility calculator to plan their financing efficiently.

HSN code and GST rate finder

Frequently Asked Questions

What are 5 advantages of solar power?
  • Loan amounts of up to Rs. 80 lakh.
  • No collateral required.
  • Flexible repayment tenures ranging from 12 to 96 months.
  • Transparent terms with no hidden charges.
  • Quick approvals and disbursals with minimal documentation.
What is the difference between on-grid, off-grid, and hybrid solar systems?
  • Flexi Hybrid Loan: Offers flexibility to borrow and repay with interest-only EMIs during the initial period.
  • Flexi Term Loan: Combines principal and interest in steady EMIs.
  • Term Loan: Designed for structured, long-term financial needs.
Can I run my entire home on solar power, including AC units?

Yes, Bajaj Finserv Business Loans can be used to finance green initiatives, such as installing solar panels, helping you achieve sustainability goals without impacting your cash flow.

Show More Show Less

Bajaj Finserv App for All Your Financial Needs and Goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Explore and apply for co-branded credit cards online.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements, and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.


Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.
For customer support, call Personal Loan IVR: 7757 000 000