Financing of solar water heaters Financing of solar water heaters see a surge in userssee a surge in users

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Steep rise in the cost of electricity and the Steep rise in the cost of electricity and the erratic nature of available electricity have erratic nature of available electricity have made numerous consumers, both made numerous consumers, both domestic and commercial turn to solar domestic and commercial turn to solar water heaters as a steady source of water heaters as a steady source of supply for their hot water needs. supply for their hot water needs.

In a country that experiences long In a country that experiences long summers and bright sunny skies, this summers and bright sunny skies, this becomes an optimum option. becomes an optimum option.

Solar water heaters are now being Solar water heaters are now being installed across thousands of homes and installed across thousands of homes and institution across the country. The new institution across the country. The new interest rate regime has added an impetus interest rate regime has added an impetus to the consumers as well as to the consumers as well as manufacturers. manufacturers.

Low cost financing options provided by Low cost financing options provided by rural and urban banks made a significant rural and urban banks made a significant difference. However, the difference difference. However, the difference between interest and capital subsidy is between interest and capital subsidy is worth a look. worth a look.

For solar water heaters, the regular For solar water heaters, the regular interest rates are being subsidised by the interest rates are being subsidised by the Ministry of Non conventional Energy Ministry of Non conventional Energy Sources. Some banks offer loans at 2% Sources. Some banks offer loans at 2% for individuals, 3% for institutions and 5% for individuals, 3% for institutions and 5% for commercial entities. for commercial entities.

Usually the bank finances 85% of the Usually the bank finances 85% of the project cost for 5 years and as an added project cost for 5 years and as an added benefit, 80% depreciation can be claimed. benefit, 80% depreciation can be claimed.

Though these were enticing, the difficulties Though these were enticing, the difficulties of availing of these loans had deterred of availing of these loans had deterred new manufacturers from entering the fray. new manufacturers from entering the fray. There seemed to be no boost to the There seemed to be no boost to the industry. Even a 30% capital subsidy did industry. Even a 30% capital subsidy did not help the situation. not help the situation.

A policy change from capital subsidy to A policy change from capital subsidy to interest subsidy changed the industry interest subsidy changed the industry completely in the mid nineties. This led completely in the mid nineties. This led more banks to finance the solar water more banks to finance the solar water heater industry and new manufacturers heater industry and new manufacturers came to the fore. came to the fore.

At this time leading manufacturers like At this time leading manufacturers like V Guard V Guard Industries set up their Industries set up their manufacturing facilities and now offer manufacturing facilities and now offer superior solar water heaters. superior solar water heaters.

The engaging of banks in the sector has The engaging of banks in the sector has ensured the sustainability of financing to ensured the sustainability of financing to the sector and solar water heaters now the sector and solar water heaters now compete with any other consumer compete with any other consumer products on the shelves products on the shelves

Quality manufactures need to get their Quality manufactures need to get their solar water heaters qualified by financial solar water heaters qualified by financial institutions to come under the solar water institutions to come under the solar water heater program. heater program.

A bye product of the same has been that A bye product of the same has been that the end user is assures of quality and the end user is assures of quality and service. If the system does not perform the service. If the system does not perform the supplier gets disqualified for the loan supplier gets disqualified for the loan resulting in non payment. resulting in non payment.

These measures have led to an increase These measures have led to an increase in usage of solar water heaters in a large in usage of solar water heaters in a large number of places including factories, mills, number of places including factories, mills, schools, processing plants, hospitals and schools, processing plants, hospitals and hotels. hotels.

If only India would take advantage of its If only India would take advantage of its vast network of banks and financing vast network of banks and financing institutions to bring into effect such institutions to bring into effect such beneficial schemes, the country and the beneficial schemes, the country and the planet at large would stand to gain.planet at large would stand to gain.

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