Financing commercial RLVs: Considering government incentives

Statistics – Applications

Scientific paper

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Spaceborne And Space Research Instruments, Apparatus, And Components

Scientific paper

There appears to be a national goal to achieve a commercial space transportation industry that provides launch services utilizing a fleet of reusable launch vehicles (RLVs). Because of the combination of large required investment, inadequate rate of return, and perceived high risk, industry has indicated that this goal may not be achievable without government support. What form of government support will likely be necessary? Government programs and policies can effect private sector investment decisions by reducing risk perceptions, reducing capital requirements, and increasing expected rates of return. Different programs and policies will have different impacts. For example, tax policies will affect expected return on investment but are likely to have little or no effect on risk perceptions and magnitude of required investment, whereas anchor tenancy is likely to alter risk perceptions and may increase expected rates of return. This paper is concerned with the development of an approach that may be used to identify packages of government incentives that may be required to influence private sector investment decisions so as to achieve the desired goal of a commercial space transportation industry that provides launch services utilizing a fleet of RLVs. The paper discusses the relationship of government incentive programs and policies to the RLV investment decision.

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