However, in order to achieve scalability in these measures and to achieve the objectives of SWH penetration, there is a need to extend the existing schemes and design innovative service delivery mechanisms to leverage SWH investments. One such model is the Fee-for-Service model where people buy a service, in this case hot water, from an ESCO, rather than energy to perform the service (e.g. purchasing electricity so it can be used to heat water).
An ESCO is defined as a company that would install, own and operate renewable energy systems, which in this case would be SWH systems and provide energy services to consumers. Such companies are characterized by the following features -
A detailed assessment of the Energy Performance Contracting Models and Energy Supply Contracting Models was carried out in this study. Along with this, a fairly detailed stakeholder consultation was carried out among existing SWH based hot water service providers in India. Based on this, various types of business models for operation of SWH ESCOs in India have been proposed in this report. From MNRE’s perspective, this study is intended to draw out a set of implementation guidelines for facilitating service based delivery of hot water through SWH systems. As mentioned earlier, such a delivery model has the potential to scale solar water heating development in the country.
This study is intended to address the above objective of MNRE and frame a set of implementation guidelines in this regard. The limited experience in SWH ESCO models reveals that -
These various risks would need to be appropriately addressed in order to ensure successful operation of the program. Considering the significant SWH potential in the country, a properly designed area-based ESCO program will contribute significantly in scaling-up solar water heating development in the country.