Abstract
India has a huge industrial demand for process heating at temperatures that can be provided with commercially available solar collectors. Government of India with support from multi-lateral agencies has initiated an ambitious programme for promoting large scale adoption of Solar Industrial Process Heating (SIPH) in the industrial sector of the country. This paper presents the details of an attempt to study the effect of several existing and potential incentives on the financial attractiveness of SIPH systems in India. A case of solar process heating in dairy industry has been presented to demonstrate the relative efficacy of different incentives on the economics of SIPH systems in terms of their impact on levelized cost of useful thermal energy delivered. Finally, policy implications of the results obtained have been discussed.
Highlights
Industrial process heating using solar energy is being considered as one of the alternatives for replacement of fossil fuels and ensuring sustainable solutions as it has the potential to address climate change concerns [1]
Reasons for the same may include high initial capital investment requirement of Solar Industrial Process Heating (SIPH) systems, low price of fuels used for process heating, and inherent variability and intermittence of solar resource
A reduction in initial capital investment requirement of SIPH systems is expected with an increase in installed capacity of such systems, benefitting from economy of scale and learning
Summary
The efficiency of solar energy utilization for industrial process heating is expected to be more efficient as compared to the overall efficiency of solar thermal power plants [2]. As of Solar Industrial Process Heating (SIPH) contributes negligibly small share of the global process heating demand of the industrial sector [3]. Reasons for the same may include high initial capital investment requirement of SIPH systems (as compared to the current capital investment for a conventional process heating system), low price of fuels used for process heating, and inherent variability and intermittence of solar resource. In order to promote the adoption of SIPH systems, in the initial phase, possibility of providing suitable incentives as well as policy support needs to be carefully investigated, in emerging economies with large industrial sectors
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