Nepal's first solar water heater was installed at Budanilakantha School in 1974 by the then Swiss government-supported Balaju Yantra Shala Sanitary Engineering Ltd. (BYS). The school initially wanted to import a solar water-heater from Australia, but turned to a Nepali manufacturer because of budget constraints. Since standard insulators like glass-wool and thermocole weren't available in Nepal, the manufacturer used sukkul (a traditional mat made of hay) and sawdust. A year later, a second small-capacity water-heater was installed at Nagarjun Darbar. But solar heated water didn't really catch on until 1978. "People found it hard to believe that the sun's heat could be trapped to warm litres of water," says Co-General Manager of BYS Gautam Shrestha.

Public demonstrations were organised to motivate people to use the heaters. But the real boost for the industry came from the US government's decision to install solar water-heaters in all its diplomatic institutions using the local technicians. BYS got the job in Nepal. "After the Americans installed our solar water heaters, senior bureaucrats followed suit, and then others started to believe in the technology," says Rajesh Prasad, General Manager of BYS. BYS transferred the technology to private sector after 1985.