Economic analysis of a business model of basin-type building material-based solar thermal desalination device

Abstract

The development of solar desalination technology industry can play an important role in the economic development of the country. In addition to reducing carbon emissions, these technologies can create more jobs in rural and urban areas and strengthen traditional energy systems. To start a new business, the profitability of the business should be evaluated separately based on economic analysis. Banks provide loans according to the economic attributes of the project. Therefore, an economic evaluation of basin-type building material-based solar thermal desalination device was carried out to evaluate the feasibility of solar technology investment in order to guide new entrepreneurs. For determining the economic viability of constructing solar desalination unit, many economic criteria such as break-even point, net present value (NPV), payback period (PBP), benefit-cost ratio (BCR), annuity (A), internal rate of return were determined. The entire annual operating cost of the business was calculated by adding fixed and variable charges. The business of solar thermal desalination unit has a huge potential because of the high BCR (1.15), NPV (INR 4,916,083) (59,040.68 USD), A (INR 721,151) (8,660.81 USD), and short PBP (1 month) values when producing 365 units/y. In addition, according to the break-even analysis, the manufacturing and sale of only 52 units are sufficient to achieve a condition of no profit and no loss. This firm generates a net average yearly benefit (A) of INR 721,151 (8,660.81 USD). Furthermore, this firm has the potential to not only generate cash but also provide work for four people. It also has a great potential for lowering CO2 emissions.