28 February 2017

Busby on India's Progress and Barriers on Solar Energy

Strauss Center Distinguished Scholar and CEPSA researcher Joshua Busby recently published the blog post "India Makes Progress on Solar, But Barriers Remain" with Sarang Shidore, a visiting scholar at the LBJ School, for the Council on Foreign Relations. Dr. Busby's latest contribution analyzes India's progress on four barriers obstructing solar energy's rise in India - too aggressive bids in auctions for solar power projects, poor financial health of Discoms (power distribution companies), inadequate grid capacity, and relative neglect of the rooftop segment - identified one year ago.

The latest study has shown that India's solar capacity additions have been solid, largely due to the sustained focus of the Indian central government that has put an array of proactive policies like capital subsidies, a 10-year tax holiday, and credible public sector enterprises to boost the sector. Despite the Indian government's commitment to solar, the quantity of solar electricity generation remains small - only 1% of the total - and thus achieving the Modi administration's 100 GW target by 2022 is unlikely. The target was too ambitious to begin with, but multiple challenges also remain for solar to make an appreciable contribution to India's energy security and environmental goals. According to Busby and Shidore, the Indian government needs to restore Discom solvency and shore up the health of the grid. Solar will continue to expand in India at a solid pace, but unless other major policy initiatives are implemented, India will fall well short of its ambitious targets.

The full post can be accessed here.