Financing of solar water heaters see a surgePresentation Transcript
Financing of solar water heaters see a surge in users www.vguard.in
Steep rise in the cost of electricity and the erratic nature of available electricity have made numerous consumers, both domestic and commercial turn to solar water heaters as a steady source of supply for their hot water needs.
In a country that experiences long summers and bright sunny skies, this becomes an optimum option.
Solar water heaters are now being installed across thousands of homes and institution across the country. The new interest rate regime has added an impetus to the consumers as well as manufacturers.
Low cost financing options provided by rural and urban banks made a significant difference. However, the difference between interest and capital subsidy is worth a look.
For solar water heaters, the regular interest rates are being subsidised by the Ministry of Non conventional Energy Sources. Some banks offer loans at 2% for individuals, 3% for institutions and 5% for commercial entities.
Usually the bank finances 85% of the project cost for 5 years and as an added benefit, 80% depreciation can be claimed.
Though these were enticing, the difficulties of availing of these loans had deterred new manufacturers from entering the fray. There seemed to be no boost to the industry. Even a 30% capital subsidy did not help the situation.
A policy change from capital subsidy to interest subsidy changed the industry completely in the mid nineties. This led more banks to finance the solar water heater industry and new manufacturers came to the fore.
At this time leading manufacturers like V Guard Industries set up their manufacturing facilities and now offer superior solar water heaters.
The engaging of banks in the sector has ensured the sustainability of financing to the sector and solar water heaters now compete with any other consumer products on the shelves
Quality manufactures need to get their solar water heaters qualified by financial institutions to come under the solar water heater program.
A bye product of the same has been that the end user is assures of quality and service. If the system does not perform the supplier gets disqualified for the loan resulting in non payment.
These measures have led to an increase in usage of solar water heaters in a large number of places including factories, mills, schools, processing plants, hospitals and hotels.
If only India would take advantage of its vast network of banks and financing institutions to bring into effect such beneficial schemes, the country and the planet at large would stand to gain.