A framework for analyzing impact of potential financial/fiscal incentives for promoting institutional solar cooking in India

Abstract

A framework to estimate the extent of various incentives required to ensure financial attractiveness of institutional solar cooking is presented with typical examples from India. Incentives considered are capital subsidy/viability gap funding, accelerated depreciation, interest subsidy, and investment tax credit have been considered for three commercially available designs of solar cookers that can be used for institutional cooking (SK-23, Scheffler dish (direct), and Scheffler dish (steam)). Depending on the location, the extent of viability gap funding (VGF) for Scheffler dish (steam) solar cooking system varies from 18.7% to 66.5% of the capital cost, while the same for SK-23 and Scheffler dish (direct) varies from 8.7% to 82.9%, and 33.4%–94.5% respectively. From the government point of view, the provision of accelerated depreciation for incentivising institutional solar cooking is found to be the least cost option followed by viability gap funding, investment tax credit and interest subsidy in the order of increasing cost to the government. At locations in the cold and cloudy climatic zone of India, there is invariably a need to provide a combination of incentives (as the current provision of 30% capital subsidy is not adequate) to ensure a breakeven condition.