ABSTRACT
This chapter discusses standard life-cycle costing techniques are used to establish an economic methodology for solar thermal systems that provide process heat to industry. Industry is generally reluctant to make important capital-budgeting decisions on the basis of uncertain future costs. In an economic analysis of these two alternative methods of supplying process heat, the fossil fuel system (FFS) and the proposed FFS/solar thermal system (STS) available to industry are the investment tax credit at the federal level and property tax relief provided by some states and localities. Three important types of incentives could be made available to industry. These are accelerated depreciation and increased investment tax credit, rebate on income tax liability due to savings of fossil fuel and government-backed, low-interest loans. An important possible government incentive would provide industry with low-interest loans to cover a fraction of its STS investments.
