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Boosting solar investment with limited subsidies: Rent management and policy learning in India

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  • Altenburg, Tilman
  • Engelmeier, Tobias

Abstract

In order to avoid irreversible damage to global ecosystems, new ‘green’ technologies are needed, some of which are nowhere near commercial maturity. In these cases, governments may create temporary rents to make investments ‘artificially’ attractive, but the creation of such rents involves risks of faulty allocation and political capture. This article first highlights the importance of managing rents effectively in promoting ‘green’ technologies; it then shows how India's National Solar Mission has been remarkably effective in triggering solar investments and managing the necessary subsidies, e.g. through a process of competitive reverse bidding for tariffs. Policy design and implementation also reflect considerable experimentation and learning. Some risks remain, especially regarding the enforceability of renewable energy quotas at the level of Indian states.

Suggested Citation

  • Altenburg, Tilman & Engelmeier, Tobias, 2013. "Boosting solar investment with limited subsidies: Rent management and policy learning in India," Energy Policy, Elsevier, vol. 59(C), pages 866-874.
    • Handle: RePEc:eee:enepol:v:59:y:2013:i:c:p:866-874
    DOI: 10.1016/j.enpol.2013.04.055
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    6. Rohankar, Nishant & Jain, A.K. & Nangia, Om P. & Dwivedi, Prasoom, 2016. "A study of existing solar power policy framework in India for viability of the solar projects perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 510-518.
    7. Chang, Kai & Xue, Chenqi & Zhang, Huijia & Zeng, Yonghong, 2022. "The effects of green fiscal policies and R&D investment on a firm's market value: New evidence from the renewable energy industry in China," Energy, Elsevier, vol. 251(C).
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    9. Bai, Rui & Lin, Boqiang & Liu, Xiying, 2021. "Government subsidies and firm-level renewable energy investment: New evidence from partially linear functional-coefficient models," Energy Policy, Elsevier, vol. 159(C).
    10. Pascaris, Alexis S., 2021. "Examining existing policy to inform a comprehensive legal framework for agrivoltaics in the U.S," Energy Policy, Elsevier, vol. 159(C).
    11. Quitzow, Rainer, 2015. "Assessing policy strategies for the promotion of environmental technologies: A review of India's National Solar Mission," Research Policy, Elsevier, vol. 44(1), pages 233-243.
    12. Behuria, Pritish, 2020. "The politics of late late development in renewable energy sectors: Dependency and contradictory tensions in India’s National Solar Mission," World Development, Elsevier, vol. 126(C).
    13. Wong, Chan-Yuan & Keng, Zi-Xiang & Mohamad, Zeeda Fatimah & Azizan, Suzana Ariff, 2016. "Patterns of technological accumulation: The comparative advantage and relative impact of Asian emerging economies in low carbon energy technological systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 977-987.
    14. Yu-Ling Hsiao, Cody & Ai, Dan & Wei, Xinyang & Sheng, Ni, 2021. "The contagious effect of China’s energy policy on stock markets: The case of the solar photovoltaic industry," Renewable Energy, Elsevier, vol. 164(C), pages 74-86.
    15. -, 2020. "Building a New Future: Transformative Recovery with Equality and Sustainability," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 46228 edited by Eclac.
    16. Isabella Tamine Parra Miranda & Juliana Moletta & Bruno Pedroso & Luiz Alberto Pilatti & Claudia Tania Picinin, 2021. "A Review on Green Technology Practices at BRICS Countries: Brazil, Russia, India, China, and South Africa," SAGE Open, , vol. 11(2), pages 21582440211, May.
    17. Jeon, Chanwoong & Lee, Jeongjin & Shin, Juneseuk, 2015. "Optimal subsidy estimation method using system dynamics and the real option model: Photovoltaic technology case," Applied Energy, Elsevier, vol. 142(C), pages 33-43.
    18. Daquan Gao & Christina W. Y. Wong & Kee-hung Lai, 2023. "Development of Ecosystem for Corporate Green Innovation: Resource Dependency Theory Perspective," Sustainability, MDPI, vol. 15(6), pages 1-28, March.
    19. Umamaheswaran, Swarnalakshmi & Rajiv, Seth, 2015. "Financing large scale wind and solar projects—A review of emerging experiences in the Indian context," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 166-177.
    20. Gürtler, Konrad & Postpischil, Rafael & Quitzow, Rainer, 2019. "The dismantling of renewable energy policies: The cases of Spain and the Czech Republic," Energy Policy, Elsevier, vol. 133(C).
    21. Kar, Sanjay Kumar & Sharma, Atul & Roy, Biswajit, 2016. "Solar energy market developments in India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 121-133.
    22. Robert Olszewski & Piotr Pałka & Agnieszka Wendland & Jacek Kamiński, 2019. "A Multi-Agent Social Gamification Model to Guide Sustainable Urban Photovoltaic Panels Installation Policies," Energies, MDPI, vol. 12(15), pages 1-27, August.
    23. Wong, Chan-Yuan & Fatimah Mohamad, Zeeda & Keng, Zi-Xiang & Ariff Azizan, Suzana, 2014. "Examining the patterns of innovation in low carbon energy science and technology: Publications and patents of Asian emerging economies," Energy Policy, Elsevier, vol. 73(C), pages 789-802.

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