The strategy is not to subsidise solar heat indefinitely. It is to buy down the cost of being first, until being second is an ordinary commercial decision.
Each of the three barriers identified during preparation is addressed by a distinct instrument, and each instrument is designed to become unnecessary once the market forms.
| Barrier | Instrument | Exit condition |
|---|---|---|
| Lack of awareness | Visible installations in each cluster, cluster-level workshops, published case studies with verified performance data | Enterprises hear about CST from their neighbours rather than from the project |
| Lack of technical confidence | Supplier empanelment against published criteria, technical specifications and standards, trained operators, independent feasibility studies | A competitive supplier market with quality that buyers can verify unaided |
| Unattractive payback | Capital incentive at 50% of project cost, widened eligible scope, BOOT delivery for enterprises unable to invest capital | Falling equipment costs and rising fuel prices bring unsupported payback within MSME thresholds |
A sensitivity analysis across pilot projects in food processing, pharmaceuticals, textiles, chemicals, tea and rice processing tested payback at incentive levels from 0% to 60%. Payback falls steeply between 30% and 50%, then flattens.
Fifty per cent is the point at which CST enters the two-to-four-year window in which MSMEs actually commit capital, without spending public money on returns the market would have delivered anyway. That finding was endorsed by industry associations, technology providers and cluster representatives, and approved by the Project Steering Committee.
Of more than 42 expressions of interest, 25 progressed to pre-feasibility assessment and 14 to detailed project reports — but only six enterprises committed at the 30% incentive level. Most withdrew because payback exceeded five years, because they could not fund the 70% balance, or because trading conditions were poor. In the Vellore rice-milling cluster, biomass at around ₹6 per kilogram made CST uneconomic regardless of incentive.
Those outcomes shaped the current design. Where cheap fuel already exists, CST is the wrong answer, and the project says so rather than pressing the technology into unsuitable applications.