Financial attractiveness of decentralized renewable energy systems – A case of the central Himalayan state of Uttarakhand in India

Abstract

Financial viability is arguably the most important requirement for large scale dissemination of decentralized renewable energy systems (DRESs). Financial viability of a DRES can vary from region to region as it depends on various geographical and socio-economic factors. With sufficient solar radiation availability throughout the year, abundant forest cover, dependence of majority of population on agriculture and remote villages facing energy access related challenges, the state of Uttarakhand in India has significant potential for the application of solar and biomass based DRESs. Based on the current fuel prices, subsidies and rebates, this study is an attempt to assess the financial attractiveness of solar and biomass based DRESs under various scenarios for their potential users in Uttarakhand.Improved biomass cookstove, domestic solar water heater, solar lantern and solar home system are found to be financially viable under almost all scenarios for household applications while dish type solar cooker, solar PV pump and solar dryer are not so attractive for household applications. It has also been found that the financial attractiveness of DRESs improve significantly with the removal of subsidy presently being given to fossil fuel based energy supply options.