Sustainable Energy Technologies and Assessments 27 (2018) 1–8

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Sustainable Energy Technologies and Assessments

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Original article

Financial viability of solar industrial process heating and cost of carbon T

mitigation: A case of dairy industry in India
⁎
Ashish K. Sharmaa, , Chandan Sharmab, Subhash C. Mullicka, Tara C. Kandpala
a
Centre for Energy Studies, Indian Institute of Technology Delhi, Hauz Khas, New Delhi 110016, India
b
Government Engineering College Ajmer, Rajasthan, India

A R T I C LE I N FO A B S T R A C T

Keywords: Dairy industry in India has a substantial demand for process heating at temperatures that can be provided with
Dairy industry solar collectors. However, the acceptance and dissemination of solar industrial process heating systems would
Solar industrial process heating also be affected by their financial attractiveness for the users. Another attractive feature of SIPH systems is their
Financial viability ability to mitigate environmental emissions. Results of a financial viability analysis including estimation of cost
Carbon mitigation
of mitigating carbon emissions with use of SIPH in dairy industry in India are presented in this paper. Seven
locations in India with dairy plants have been selected and annual useful thermal energy output of SIPH systems
at these locations has been estimated. Further, levelized unit cost of useful thermal energy (LCUTE) delivered by
the SIPH systems is estimated and a comparison with the existing process heating options being used in the dairy
industry in India have been made. Other measures of financial viability such as discounted payback period, net
present value and internal rate of return for an investment in SIPH systems in dairy plants have also been
estimated. Finally, the cost of carbon mitigation with use of SIPH in dairy industry in India has been estimated.
Results presents that in terms of LCUTE solar industrial of process heating systems doesn’t seems financially
viable. Moreover, payback period of the SIPH systems are very higher thus lower value of NPV and IRR,
therefore, their use does not seem to be much attractive. Also the cost of carbon emissions likely to be mitigated
with use of SIPH is on higher side. Therefore, In view of the long term economic and environmental benefits of
using SIPH in dairy industry there is a need of marginal support to ensure their financial viability as compared to
fossil fuel based systems, the government may consider providing suitable incentives for the same.

Introduction resource availability for promoting use of solar industrial process

India produced 132 million tonnes of milk in the year 2012–13 and
out of this around 26 million tonnes (approximately 20%) was routed
through 1065 milk processing plants with reported installed capacity of
37 million tonnes per annum [21,17]. In a typical milk processing
plant, a major fraction (70%) of energy use is essential for process
heating (50–200 °C) [22,10,14]. Most of the process heating demand in
the dairy industry in India is met with fossil fuels based process heating
systems mainly (furnace oil, light diesel oil (LDO), low Sulphur heavy
stock (LSHS), natural gas and high speed diesel HSD, coal etc.) [3,11].
With the use of state of art solar collector technologies it is possible to
supply thermal energy at temperatures ((50–200 °C) required by the
dairy industry [4,23,24]. A significant potential (6.5 PJ) of solar based
process heating has also been estimated for dairy Industry in India
[26].It has also been observed that most of the locations with dairy
plants in India have considerable availability of Direct Normal Irra-
diance (DNI). Thus, it can be inferred that the India has substantial solar
heating in dairy industry. Moreover, to promote the harnessing of solar
energy for industrial process heating, the Government of India has
implemented a UNDP-GEF supported project [31].
Large potential as well as integration capability of solar industrial
process heating in the dairy industry in India notwithstanding, it’s ac-
tual penetration in the field would essentially depend upon the fi-
nancial viability of SIPH systems for the potential user as against the
existing options such as those based on fossil fuels. Environmental
sustainability is also a deciding factor for the same. Carbon mitigation
potential of solar process heating in industries has been estimated in
several studies [25,11,26,27]. Though only a few studies exclusively
deals with detailed financial viability assessment of SIPH systems
[2,12,13,15,28], several of the studies dealing with design and per-
formance evaluation often present relevant results on one or more
measures of economic performance [1,4,19,20,9]. Commonly reported
measures for economic evaluation or appraisal of the SIPH systems for
use in different industries include payback period, net present value and

⁎
Corresponding author.
E-mail address: aksharmanith@gmail.com (A.K. Sharma).

https://doi.org/10.1016/j.seta.2018.03.007
Received 30 April 2017; Received in revised form 3 November 2017; Accepted 8 March 2018
2213-1388/ © 2018 Elsevier Ltd. All rights reserved.
A.K. Sharma et al. Sustainable Energy Technologies and Assessments 27 (2018) 1–8

Nomenclature IRR internal rate of return

LDO light diesel oil
ACC annualized capital cost LSHS low sulphur heavy stock
ACOM annual cost of operation and maintenance of solar in- LCUTE levelized cost of useful thermal energy delivered
dustrial process heating (SIPH) system NPV net present value
ASCf area of solar collector field n useful life of process heating system
AUTED annual useful thermal energy delivered ηf efficiency of fuel utilization in the boiler
Co, capital cost of process heating system ηsiph efficiency of solar industrial process heating system
CFf carbon fraction in the fuel PHRh hourly process heating requirement
CVf calorific value of the fuel S salvage value of SIPH system after completion of useful
CUF capacity utilization factor of milk processing plants in the life
country SIPH solar industrial process heating
d discount rate UCUTE unit cost of useful thermal energy delivered
DNId design value of direct normal irradiance UPf unit price of fuel
DPP discounted payback period α rate of annual escalation in the operation and main-
Eo embodied carbon emissions with the SIPH system. tenance cost of SIPH system
FCO fraction of carbon oxidized on burning of fossil fuel in the β rate of annual degradation in the performance of SIPH
boiler system
HSD high speed diesel £ rate of annual escalation in the prices of fossil fuels

internal rate of return that are usually estimated on the basis of net fuel
savings likely to accrue with the installation of SIPH systems. As an
example investigation of the economic viability of solar hot water
systems for soft drinks and vegetable oil industry in Khartoum (Sudan)
was carried out [12]. The results presented that the solar energy sys-
tems have significant potential in industrial processes and substantial
life-cycle savings can be achieved. In different case studies carried out
in Greece [13], economic evaluation of solar industrial process heating
systems with conventional fossil fuel based systems have been made. In
this analysis, all existing SIPH systems have been studied and eight
successful applications of solar thermal systems in the industry in
Greece have been identified. The outcomes of the study revealed that
due to increase in the price of liquid fuels, solar process heating systems
in industrial applications shall become cost effective. Similarly the case
studies on the adoption of SIPH in the industries in Turkey and Pakistan
confirmed economically viability of SIPH for low temperature
(60–80 °C) requirements [19,20]. For example, in the case study for the
textile industry in Turkey a payback period of less than 3 years has been
estimated. All these studies were focused on the case of a specific in-
dustry or production unit. However, performance of an SIPH system
depends on several parameters such as the design value of available
insolation and its availability, climatic conditions at the location of use,
performance characteristics of solar collector used and thermal load
with required operating conditions of process heating (delivery

Fig. 1. A schematic of the methodology adopted for performance estimation of SIPH systems.

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A.K. Sharma et al. Sustainable Energy Technologies and Assessments 27 (2018) 1–8

temperatures, pressure and mass flow rate). Therefore, there is a need
for a generalized framework that could facilitate internalization of
parameters characterizing collector performance, the variation of in-
solation as well as other climatic conditions and the process dependent
parameters in the financial feasibility assessment of SIPH systems. For
several stakeholders such as project developers, policy makers and
regulators, availability of such a framework may provide much needed
insight towards selection of appropriate locations (for dissemination of
SIPH), solar collectors and system size besides providing important
information about the effectiveness of different possible incentives and
support measures for promotion of SIPH.
In view of the above, a framework that facilitates internalization of
field performance of SIPH system to assess the financial feasibility as-
sessment as well as estimation of cost of mitigating carbon emissions
with use of solar industrial process heating (SIPH) in dairy industry in
India has been developed and used for analysis. The approach sug-
gested and framework presented in the study is general in nature and
can be used for financial appraisal of SIPH systems by all those en-
trusted with responsibility of selecting and designing SIPH systems,
making policies and regulations for promoting the same
Methodology
This study involves performance estimations of SIPH systems (in
terms of useful thermal energy delivery and solar fraction), financial
viability and cost of carbon mitigation with use of SIPH in dairy in-
dustry in India. A schematic of the approach used for estimating the
performance of SIPH systems in terms of useful energy delivery is
presented in the Fig. 1 with each of the steps being described in the
following paragraphs.
Selection of locations
A schematic of the SIPH systems considered is depicted in the Fig. 2.
Estimation of solar collector area requirement and useful thermal energy
delivery
The area (in m2) of solar collector field (ASCf) required to meet the
process heating demand at a given location for pre-defined operating
conditioning (temperature and pressure) can be estimated as
PHRh
ASCf =
(ηsiph )(DNId) (1)
where PHRh represents hourly value of process heat requirement (GJ/
h), ηsiph the overall thermal efficiency of solar energy utilization of SIPH
system at chosen value of design DNI as well as ambient temperature
and DNId the chosen value of design DNI incident on the aperture of the
solar concentrator (W/m2).
Design DNI is the intensity of direct component of solar radiation at
which a solar concentrator based SIPH system would produce its
nominal (rated) thermal output. As may be noted from Eq. (1), the
higher the chosen value of design DNI for the SIPH system lower would
be the collector area required for producing its nominal output and vice
versa. Determining the solar collector area from Eq. (1), the useful
thermal energy delivered by the SIPH system has been estimated.
Schematic of the procedure followed has also been presented in the
(Fig. 2). Hourly values of the DNI at the selected locations were ob-
tained using the weather software Meteonorm 7.1 [16].This exercise is
repeated for the locations of milk processing plants selected in the
present analysis.
In order to facilitate a relative comparison of SIPH systems at dif-
ferent locations with milk processing units, thermal energy demand or
capacity of process heating systems is considered to be the same for
each location and value for the same is listed in Table 2.

A preliminary assessment of the potential of solar energy based
process heating in dairy industry in India has been made by [26]. Based
on the findings of this study, the locations with prominent milk pro-
cessing units and high solar resource availability as identified by
Sharma et al. [26] in previous work have been considered in the study
The corresponding data regarding the annual availability of DNI and
annual average ambient temperature (Ta) for these locations has been
obtained (Table 1) from the weather data source of the software Me-
teonorm 7.1 (2014). Values in Table 1 are given to indicate broad
differences in solar resource availability and ambient temperature at
different locations considered in the study. The detailed calculations
have been made using the hourly values of DNI and ambient tem-
perature as provided by Meteonorm 7.1.
Estimation of the useful thermal energy requirement (thermal load)
Measures of financial viability of SIPH in dairy industry
The measures of financial viability used in the analysis are levelized
cost of useful thermal energy (LCUTE) delivered, discounted payback
period, net present value, and internal rate of return. A brief description
of each of the measure with corresponding expressions used is pre-
sented in the following paragraphs.
Levelized cost of useful thermal energy delivered (LCUTE)
In order to estimate the value of LCUTE of process heating system,
the values of unit cost of useful thermal energy (UCTE) delivered for
each of operation of this system are to be estimated separately as the
output of the system may vary with time due to performance de-
gradation (particularly for solar energy based system). Output for the
SIPH system in jth year of its operation can be estimated as

Thermal energy use of milk processing plants in the country varies AUTEDj = AUTED1 (1−β ) j − 1 (2)
widely depending on the annual capacity utilization of the plant, sea-
where AUTEDj represents the annual amount of useful thermal energy
sonal variations in the availability of milk, technology being used for
delivered by the SIP system in jth year, β the rate of annual deration in
milk processing, and the product mix [6]. Most of the thermal energy
the performance of SIPH system.
requirements in a dairy industry are often met by a captive boiler that
provides steam at desired temperature and pressure. In an earlier study
Table 1
by the authors aiming at estimation of solar process heating potential of Locations selected for the analysis along with corresponding annual values of the DNI.
dairy industry of the country, a review of different boilers being used in
dairy plants with details of temperature, pressure, and mass flow rate Location Latitude Longitude Annual DNI Average ambient temperature
was undertaken [26]. In the present study, based on the operating (0N) (0E) (kWh/m2) (0C)
characteristics of a frequently used boiler providing process steam for a Anand 22.56 72.92 1837 27.2
broad based product mix, a solar processing heating system that can Indore 22.71 75.85 2075 25.1
provide outlet temperature of 184 °C and pressure of 10.55 bar has been Latur 18.42 76.73 1708 27.7
considered. In this study, a parabolic trough based process heating Ranchi 23.34 85.30 1753 24.6
Salem 11.66 78.11 1841 27.0
system (with and without provision of thermal energy storage) has been
Sangali 16.55 74.58 1716 26.1
considered. It is assumed that in both cases the SIPH systems operate in Tumkur 13.33 77.14 1962 24.1
a hybrid mode with a conventional fossil fuel (furnace oil) based boiler.

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A.K. Sharma et al. Sustainable Energy Technologies and Assessments 27 (2018) 1–8

Fig. 2. Schematics of SIPH systems.

Similarly annual escalation in operation and maintenance cost of
SIPH system at a uniform rate α (as a fraction of the previous year
value), the operation and maintenance cost of SIPH system for jth year
of its operation would be
ACOMj = ACOM1 (1 + α ) j−1
The unit cost of useful thermal energy delivered by the process
heating system for jth year (UCTEj) can be estimated as the ratio of total
annual cost of the system in the jth year (TACj) to the annual amount of
useful thermal energy delivered by the plant. The total annual cost of
the system in the jth year (TACj) included the equivalent annualized
value of the capital cost of the system, cost of operation and main-
tenance (including the cost of fuel used during the year. The equivalent
annualized value of the capital cost (ACC) can be determined by mul-
tiplying the capital cost (Co) by the uniform series capital recovery
factor i.e.
(3)
d(1 + d) n ⎤
ACC = Co ⎡
⎢ n
⎣ + d) −1 ⎥
(1 ⎦ (4)
with d represents the discount rate applicable for the investment and n
the useful life as applicable for the system.
The unit cost of useful thermal energy delivered for the jth year

Table 2
Values of input parameters used in the analysis or even in calculations.

Parameter Symbol Unit Value(s) Reference(s)

(A) Parameters for assessing the performance of SIPH system

Values of Design DNI (DNId) (DNId W/m2 600–800 [26]

0
Inlet Temperature (Ti) C 60
0
Outlet Temperature To C 184
Mean fluid temperature (Tm) 0
C 122
Process heat requirement (hourly) PHRh GJ 1.52
Efficiency Equations Parabolic trough η = 0.71–0.3581 * (Tm − Ta)/I − 0.0019*(*(Tm − Ta)2/I [29]

(B) Parameters for estimating the LCUTE of conventional process heating systems
Capital cost Co Rs 7,000,000 –
Useful life n Years 30 [18]
Efficiency of fuel utilization in the boiler ηf (%) 80
Unit price of furnace oil (December 2016) UPf Rs/kg 28
Annul escalation in the price of furnace oil ξ (%) 4.3
Price of LDO (December 2016) UPf Rs/kg 35.92
Annual escalation in the price of LDO ξ (%) 2.6
Price of HSD (December 2016) UPf Rs/kg 44.50
Annual escalation in the price of HSD ξ (%) 3.0
Price of Natural gas (December 2016) UPf Rs/kg 42.60
Annual escalation in the price of natural gas ξ (%) 3.16
Price of LSHS (December 2016) UPf Rs/kg 28.69
Annual escalation in the price of LSHS ξ (%) 2.18
Calorific value of furnace oil CVf (MJ/kg) 41.5 [5,32]
Calorific value of HSD CVf (MJ/kg) 45.2
Calorific value of LSHS CVf (MJ/kg) 44.16
Calorific Value of Natural gas CVf (MJ/kg) 43.0
Calorific value of LDO CVf (MJ/kg) 43.10

(C) Parameters for estimating the financial viability and cost of carbon mitigation
Capital cost of PTC based SIPH system Co (Rs/m2) 26,500 (including 18,000/m2 as collector cost) [30]
Annual useful energy delivered AUED GJ –
Annual O&M costs ACOM % 1% of capital cost [7]
Annual escalation in O&M cost α 0.05
Annual deration in the collector performance β 0.005
Useful life n Years 25
Discount rate d (%) 12 [8]
Embodied Carbon emissions corresponding to PTC based solar system Ee g/kWh 90

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A.K. Sharma et al. Sustainable Energy Technologies and Assessments 27 (2018) 1–8

(UCUTEj) Internal rate of return

Internal rate of return (IRR) is defined as the annual value of dis-
ACC +ACOMj
UCTEj = count rate at which the Net Present Value (NPV) of the investment is
AUTEDj (5) zero. IRR can be estimated from the following equation:
n
where ACOMj represents the annual cost of operation and main-
∑ ⎡ Bj−ACOMj ⎤ + S
− C 0=
tenance during jth year, and ⎢ j (1 + IRR) n
j= 1 ⎣ (1 + IRR) ⎥⎦ (12)
n
⎡ UCUTEj ⎤ ⎡ d(1 + ⎤ d) n
LCUTE = ⎢∑ ⎥
(1 + d) j ⎢ (1 + d) n−1 ⎦
⎥ Cost of carbon emissions mitigation
⎣ j ⎦⎣ (6)

The above approach for estimating the LCUTE essentially de-
termines the cumulative present values of the UCTEj for all years during
the useful life of the project and then redistributes the same uniformly
over the useful time.
Annual useful energy delivered by a conventional process heating
system in each year of its operation can be estimated as
AUTED = (PHRh) × (365) × (24)(CUFd) (7)
with PHRh representing the hourly process heating requirement and
CUFd annual average capacity utilization of dairy industry of India. In
case of a conventional process heating system, annual cost of operation
of jth year (ACj) represents the cost of fuel utilized in the boiler during
the year. In this study, for the purpose of estimating the levelized cost of
useful thermal energy delivered by a conventional boiler based process
heating system it is assumed that the same operates with an annual
capacity utilization of 100%.
Discounted payback period
Discounted payback period (DPP) of an investment in the SIPH
system is the period by which the cumulative present value of net
benefits is equal to its capital cost. In case of uniform net annual ben-
efits, the DPP can be expressed as:
DPP
Bj−ACOMj
∑ (1 + d) j
= C0
j= 1 (8)
As indicated earlier, one of the attractive features of using SIPH
systems is their ability to mitigate carbon dioxide and other greenhouse
gas emissions by reducing the use of fossil fuels consumed in meeting
the process heating demand. However, in order to facilitate a com-
parison of the cost of carbon mitigation with other potential options for
the same purpose it is necessary to estimate the unit cost of carbon
mitigation for the SIPH systems. The value of unit cost of carbon mi-
tigation can be estimated as the ratio of equivalent annualized cost of
the SIPH system to the net annual amount of carbon dioxide emissions
mitigated by the system. Mathematically cost of carbon emissions mi-
tigation (Ccem) can be expressed as
Ccem =
ACC +ACOM− ( AUTED
(CVf )(ηf )
× UPf )
(FCo)(AUTED)(CFf )(44 / 12)
(CVf )(ηf )
E
− ne ( ) (13)
where FCo represents the fraction of carbon oxidized on burning of
fuel and Ee the embodied carbon emissions with the SIPH system. In the
present study, due to lack of data regarding the embodied emissions
associated with SIPH systems, embodied emissions corresponding to a
solar thermal power plant based on parabolic trough collector have
been used.
Values of relevant input parameters, discussed in the methodology
section and have to use for performance estimation as well as financial
analysis of the SIPH systems considered in this study, are presented in
Table 2.

where Bj represents the annual benefit accrued with the use of SIPH Results and discussion
system as a result of fuel savings in the jth year of its operation and
ACOMj the annual cost of operation and maintenance of the SIPH A summary of results obtained and a brief discussion on the same is
system during jth year its useful life. presented in the following paragraphs.
Annual benefits (Bj) accrued with use of the SIPH system in term of Estimated values of collector area requirements, and corresponding
monetary value of the annual amount of fuel replaced can be estimated values of useful energy delivered by the SIPH systems corresponding to
(AUTEDj)(1 + ξ ) j−1 (UPf,j) three chosen values of DNI (600 W/m2, 700 W/m2 and 800 W/m2) at
Bj = locations considered are presented in Table 3. In case of SIPH system
(CVf )(ηf ) (9) without storage, for all values of design DNI considered, the values of
where CVf represents the calorific value of fuel and ηf the efficiency of solar fraction are found in the range of 0.16–0.27. The corresponding
fuel utilization in the conventional process heating system, UPfi,j the values of solar fraction for SIPH systems with provisions of thermal
unit price of fuel in the jth year and ξ rate of annual escalation in the energy storage reach a maximum of 0.30.
unit price of fuel. As expected, at lower values of deign DNI, a significant fraction of
Unit price of fuel in the jth year can be estimated as useful thermal provided by the solar collectors would be in excess and
hence would have to be dumped in the absence of a storage system.
UPf,j = UPf,1 (1 + ξ ) j−1 (10) However, in the case of SIPH system with thermal energy storage, the
excess amount of energy is stored and even with accounting for the
losses from the storage, higher values of solar fractions (up to 0.33) for
Net present value all values of design DNI have been observed. It may be noted that for
Net present value (NPV) of an investment in the SIPH system can be systems designed for higher values of design DNI (800 W/m2) an ad-
estimated as the cumulative sum of present value of all cash flows as- dition of storage does not result in any substantial increase in the solar
sociated with it during its useful life. In the case of non-uniform series fraction.
of cash flows, NPV can be expressed as: Estimates for levelized unit cost of useful thermal energy delivered
by conventional (fossil fuel based) process heating systems is presented
n
⎛ Bj−ACOMj ⎞ S in Table 4. It may be noted that, LCUTE of conventional process heating
⎜∑ (1 + d) j ⎟
NPV = + −C0
(1 + d) n systems directly depends on the fuel being used in the boiler. LCUTE of
⎝ j= 1 ⎠ (11)
conventional process heating system using furnace oil as fuel has been
In this study the salvage value of cost of disposal of the plant at the estimated at Rs 924 per GJ, however, if possible escalation in the future
end of its useful life has been assumed to be negligible small. price of furnace oil is considered, a significant enhancement in the

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A.K. Sharma et al. Sustainable Energy Technologies and Assessments 27 (2018) 1–8

Table 3 net present value and internal rate of return for an investment in SIPH
Performance of SIPH systems at selected locations of dairy plants in India. systems at selected locations are presented in Table 6 assuming the
saving of furnace oil with the installation of SIPH system.
Location Design Solar Annual useful thermal Solar fraction
DNI(W/ collector energy delivered (GJ) It may be noted that with an internalization of the potential esca-
m2) area (m2) lation in the prices of fossil fuels used for process heating the LCUTE of
Without With Without With SIPH systems becomes comparable with that for fossil fuel based pro-
storage storage storage storage cess heating systems. However the payback period for SIPH systems are
Anand 600 1120 3475 3841 0.26 0.29 very long. Also, for several locations considered in this study, SIPH
700 942 3150 3277 0.24 0.25 option does not seems to be financially viable as NPV values are ne-
800 814 2821 2848 0.21 0.21 gative. Moreover, at some locations even if the NPV is positive the in-
Indore 600 1127 3658 3950 0.27 0.33 ternal rate of return likely to be achieved may not be attractive for the
700 945 3421 3520 0.26 0.28 investors.
800 816 3156 3039 0.24 0.24 Estimated values for the cost of carbon mitigation with adoption of
Latur 600 1119 2851 2973 0.21 0.22 solar industrial process heating in dairy industry in India at the loca-
700 942 2366 2392 0.18 0.18 tions considered in the study are presented in Table 7. It may be noted
800 813 2068 2070 0.16 0.16
that, the estimated values of the cost of carbon mitigation significantly
Ranchi 600 1126 3088 3393 0.23 0.25 vary from one location to another location.
700 947 2836 3038 0.21 0.23 As an example, least value for cost of carbon emissions mitigation is
800 817 2590 2656 0.19 0.20
obtained for location of Indore (Rs 1810 per tonne of CO2), whereas at
Sangali 600 1124 2661 2827 0.20 0.21 Sangali this value is approximately 4 times higher ((Rs 6870 per tonne
700 945 2358 2405 0.18 0.18
800 816 2077 2083 0.16 0.16
of CO2 mitigated). Such high value can be attributed to high capital cost
and relatively low solar fraction of SIPH systems. Thus, SIPH systems in
Salem 600 1122 3224 3747 0.24 0.28
dairy industry are not likely to be the least cost options for Carbon
700 944 2973 3223 0.22 0.24
800 815 2722 2814 0.20 0.21 mitigation.
Tumkur 600 1128 3226 3950 0.24 0.30
700 948 3090 3520 0.23 0.26 Concluding remarks
800 818 2845 3039 0.21 0.23
The results of this study reaffirm that the solar industrial process
heating systems have the potential to contribute up to of 33% of the
Table 4
LCUTE delivered by conventional process heating systems.
process heating demand of the dairy industry in India, as at the loca-
tions considered in this study solar fraction vary in the range of
Type of fuel Levelized cost of useful thermal energy (16%–33%). Optimal values of design DNI for minimum values of
delivered (Rs/GJ) LCUTE vary from 600 to 800 W/m2 depending upon the location of
installation.
Without escalation With escalation
As expected, the annual useful energy delivery varies with the
Light diesel oil 1107 1342
LSHS 886 1037 Table 5
Furnace oil 924 1265 Levelized cost of useful thermal energy delivered by SIPH systems in dairy industry in
High speed diesel 1296 1625 India.
Natural gas 1304 1657
Location Design value of Levelized unit cost of useful thermal energy delivered
DNI (Rs/GJ)
value of LCUTE (Rs1265 per GJ) has been observed. These estimations (W/m2)
are determined to facilitate comparison between the conventional and Without storage With storage

solar based process heating systems. Anand 600 1160 1161

The values of LCUTE of SIPH systems at several values of the design 700 1128 1221
DNI at all locations considered in the study are presented in Table 5. At 800 1149 1289
most of the locations (expect Salem and Tumkur) minimum value of Indore 600 1107 1033
LCUTE is obtained for the SIPH system that does not have provision for 700 1046 1078
thermal energy storage. This may be due to the possibility of the in- 800 1024 1132
cremental monetary cost of thermal energy storage being larger than Latur 600 1406 1499
the incremental monetary benefits likely to accrue with the storage. It 700 1510 1672
800 1566 1772
may also be noted that though a decrease in design DNI implies an
increase in solar field (thus leading to an increase in the capital cost of Ranchi 600 1310 1319
the plant), a decrease in LCUTE is still observed initially as the energy 700 1264 1321
800 1258 1385
output also increases. However, beyond a certain value of design DNI,
the incremental cost of solar field necessitated by a further decrease in Salem 600 1252 1185
700 1203 1243
design DNI may be larger than the incremental benefits likely to accrue
800 1192 1349
due to an increase in the amount of thermal energy utilized As a result,
Sangali 600 1542 1581
LCUTE increases with further decrease in the value of the design DNI.
700 1511 1661
Therefore, as expected, the minimum value of LCUTE varies with the 800 1556 1764
location of installation of SIPH system. For example, at Indore, the
Tumkur 600 1256 1128
minimum LCUTE of Rs. 1029 per GJ is observed at a design DNI of 700 1161 1141
800 W/m2 whereas for Latur, the minimum LCUTE is Rs. 1413 per GJ at 800 1143 1211
a design DNI of 600 W/m2.
Measures of financial viability such as discounted payback period, Bold values signify the minimum value of Levelized cost of useful thermal energy de-
livered for each of the location considered.

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A.K. Sharma et al. Sustainable Energy Technologies and Assessments 27 (2018) 1–8

Table 6 compared to fossil fuel based systems, the government may consider
Measures of financial viability of SIPH in dairy industry in India. providing suitable incentives for the same.
This study is carried out in the context of India, however, frame-
Location Minimum value Discounted Net present Internal
of LCUTE payback period worth rate of works developed in this study for estimation of feasibility assessment
delivered (years) (Rs) return can be used in a large variety of conditions with varying values of the
(Rs/GJ) (%) input parameters involved globally. It is worth mentioning that, this
study do not internalize any constraints pertaining to the availability of
Anand 1128 21 2,165,634 12.98
Indore 1024 17 4,668,156 14.29 space for installation of solar concentrators in dairy plants. Site specific
Latur 1406 Not viable (−) 4,034,126 Not viable studies would therefore quite useful in designs and implementing field
Ranchi 1258 Not viable (−)832219 Not viable level interventions strategies.
Salem 1185 24 955,354 12.35
Sangali 1511 Not viable (−) 5,209,163 Not viable
Appendix A. Supplementary data
Tumkur 1128 21 2,714,149 12.98

Supplementary data associated with this article can be found, in the

Table 7 online version, at http://dx.doi.org/10.1016/j.seta.2018.03.007.
Cost of carbon mitigation with the use of SIPH in dairy industry in India.
References
Location Cost of carbon mitigation (Rs/tonne of CO2)

Parabolic tough based Fresnel paraboloid concentrator based
Anand 2820 2060
Indore 1810 1167
Latur 5630 3357
Ranchi 4200 3217
Textile cotton based
Ahmadabad 1693 −230
Bhilwara 2617 −128
Solapur 5417 712
Madurai 4158 468
location of dairy plant. The solar fraction of the SIPH systems based on
parabolic trough concentrator for dairy industry in India ranges from
0.16 to 0.27. With the inclusion of storage component to avoid dumping
of excess collected thermal energy, the maximum solar fraction of 0.30
can be achieved. Depending on the location and the chosen value of
design DNI the industry can decide suitable extent of storage with the
SIPH system.
The estimated values for the levelized cost of useful thermal energy
delivered by conventional process heating system varies from Rs 886/
GJ (for LSHS as fuel) to Rs 1304/GJ (for natural gas as a fuel) for the
case of fuel prices remaining uniform with time. The LCUTE of SIPH
systems is somewhat higher than these values on internalizing the likely
escalation in the prices of fossil fuels used for process heating in con-
ventional systems and the LCUTE values of the two become compar-
able. Thus, at this stage the government of India may consider pro-
viding suitable incentive(s) to make LCUTE of SIPH systems
competitive with that of conventional systems.
From the perspective of carbon mitigation the SIPH systems do not
appear to be very attractive as the cost of carbon mitigation is rather
high. Moreover its value is found to vary substantially with location,
perhaps due to different optimal values of design DNI (and conse-
quently the capital investment requirements) at different locations be-
sides the difference in the annual amount of useful thermal energy
delivered.
In term of levelized unit cost of useful thermal energy delivery the
solar energy based process heating options for dairy industry would be
comparable with the moderate escalation (2–5%) in prices of fossil fuels
presently being used in the boilers. However, with present prices of
fossil fuels and inability of the SIPH system to meet the entire demand
of process heating these systems doesn’t seems financially viable.
Moreover, payback period of the SIPH systems are very higher thus
lower value of NPV and IRR, therefore, their use does not seem to be
much attractive. Also the cost of carbon emissions likely to be mitigated
with use of SIPH is on higher side. Therefore, In view of the long term
economic and environmental benefits of using SIPH in dairy industry
there is a need of marginal support to ensure their financial viability as
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