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

Tilman Altenburg and Tobias Engelmeier

Energy Policy, 2013, vol. 59, issue C, 866-874

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.

Keywords: Solar energy; India; Rent management (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:59:y:2013:i:c:p:866-874

DOI: 10.1016/j.enpol.2013.04.055

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