The development of renewable energy power in India: Which policies have been effective?

The International Energy Agency has identified the development of renewable energy sources as a key element to mitigate climate change. At the same time it has projected India to be the second-largest contributor to the increase in global energy demand to 2035. India hence faces a significant challenge to ensure its energy security by diversifying its power generation mix. In the wake of the creation of a Green Climate Fund in Cancun, this paper studies empirically the effect of the introduction of the Electricity Act 2003 and the Tariff Policy 2006, as well as the implementation of feed-in tariffs and minimum quotas on clean electricity sourcing, on the development of grid-connected renewable energy power in nine Indian States over the period 2001–2009. Results suggest that the passing of the Tariff Policy 2006, state-level policies, quantity-based instruments and a greater participation of the private sector have played a key role in promoting the development of installed capacity from renewable energy power in the nine States of the sample.