A cost benefit analysis of solar energy as a source of sustainable energy

Energy sources can be classified into two types: renewable and non-renewable resources. Fossil fuels which are the major source of energy are depleting very fast. They also pose a threat because of being heavily polluting and contributing to climate change. This has posed a challenge for identifying an alternative source of energy. Hence, renewable energy has been accepted as the alternative source of energy, which is the future energy in the global scenario. In this article, a cost-benefit analysis of renewable energy with particular reference to solar energy has been made. The social and environmental benefits of solar power have been taken into consideration in addition to the economic benefits in the cost-benefit analysis of solar projects. UNIDO approach, which h a s bee n succe s s full y a dop t e d i n D e l h i Metro for evaluation of projects, has been applied in cost-benefit analysis of the solar projects as well. It is justified that a solar project which may not be viable on the basis of simple financial evaluation techniques like Net Present Value (NPV) and Internal Rate of Return (IRR) may be more than viable on the basis of the UNIDO approach. Quantification of cost and benefits of renewable projects is a major challenge which has been highlighted in this article. Suggestions have been made in the article to use solar energy as a source of sustainable energy. This article will provide a base for future research on sustainable energy.