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Evaluation and analysis of impact of subsidies on small scale renewable energy technologies dissemination: a case study of Nepal

Pandey, Rojan (2011) Evaluation and analysis of impact of subsidies on small scale renewable energy technologies dissemination: a case study of Nepal. Masters by Coursework thesis, Murdoch University.

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The report has analysed the status of rural electrification using renewable energy technologies (RETs) and the current subsidy delivery modality of RETs in Nepal. As the Government of Nepal is subsidizing small scale renewable energy projects, it is important to evaluate and analyse the programme to make sure that a programme is running in an effective and efficient way while reaching the target group.

During the course of the research, primary information collected from the field has been compiled using appropriate tools/software (such as MS Office) and analyzed. Different sets of questionnaires were prepared, targeting different personnel ranging from the users’ level to the government policy level. The field survey methods include field observations of RETs installations and operations along with interviews with selected users on a random sampling basis to identify barriers to subsidy delivery and possible measures to overcome these barriers; to determine user satisfaction level and time period for subsidy delivery mechanisms.

The report started with the country background information and the rationale behind the study. This is followed by the literature review and information on the current status of small scale RETs in the country. Next it deals with the organizational structure and current subsidy delivery modality of RETs in the country. The evaluation of the effectiveness of the subsidy with the current subsidy delivery modality has been analyzed based on six parameters; Targets and Achievements, Impact of RETs, Subsidy Delivery System Efficiency, Transparency, Sustainability and Effectiveness.

The research shows that the subsidized government program has been successful in achieving its goal to provide basic energy services in rural areas through RETs in terms of its quantitative target. Although the subsidized program is successful in electrifying the rural communities via RETs, the poorest of the poor families are still excluded from the subsidy. The program seems to benefit more the rich and upper middle class families rather than the poor families for which the subsidy was intended. The high capital cost and long subsidy delivery process are the main important reasons for this failure. The author has proposed a new modality which might overcome the time barriers and bureaucratic process in the subsidy delivery mechanism and will decrease the lead time. This will in turn help to reduce the operational cost of the private companies and will encourage more players to enter the market, increase competition and result in lower system costs.

After identifying gaps in the current subsidy delivery modality, the project report ends with the recommendation of a new modality improving the current modality and filling the gaps identified. As this study has some limitations, as described in chapter one, the scope of further works has been listed at the end.

Item Type: Thesis (Masters by Coursework)
Murdoch Affiliation(s): School of Engineering and Energy
Supervisor(s): Pryor, Trevor and Schlapfer, August
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