Table of Contents
2. Brief history of Indian solar industry.
3. Requirement of solar policy in India
4. Indian Solar Policy
India has immense potential to generate green electricity from renewable energy
sources. Solar energy plays an important role in renewable energy resources and is
a tremendous source of energy. The Sun is the planet's most powerful source of
energy and also the most unused source of energy by humans.
India, being a tropical country, has abundance of solar energy. Countrywide
forecasts based on satellite and then validated by ground data show that India's
land is receiving 500,000 TWh of electrical energy, with most regions receiving 4-
7 kWh/m2/day. This abundance of solar resource gives a lot of flexibility to the
policy makers for the development of solar energy in the country.
This article provides an overview of solar industry in India and the various policy
initiatives taken by the government..
Brief history of Indian solar industry
It was around the year 1980 when solar energy and its implementation was first
talked about in India. Of particular interest was the development of solar energy to
meet the energy demand of decentralized rural areas and potential industrial uses.
Indian Renewable Energy Development Agency Limited (IREDA) is a Public
Limited Government Company established as a Non-Banking Financial
Institution in 1987 engaged in promoting, developing and extending financial
assistance for setting up projects relating to new and renewable sources of
energy and energy efficiency/conservation with the motto: “ENERGY FOR
The Ministry of New & Renewable Energy (MNRE) was established in 1992 as
the Ministry of Non-Conventional Energy Sources with a view to develop new and
renewable energy technologies. It adopted its current name in October 2006. The
central government ministry is responsible for the development and deployment of
new and renewable energy to supplement the country's energy requirement.
In the year 1997 a Special Action Plan (SAP) was prepared for “Rapid
Improvement of Physical Infrastructure”, which included the solar PV programs.
India's National Action Plan on Climate Change (NAPCC) identifies eight
important missions to promote climate mitigation and adaptation. The National
Solar Mission, which has the specific goal of increasing the use of solar thermal
technologies in urban areas, industry and commercial establishments, is one of the
main components of this policy. The government also provides capital subsidy to
semiconductor manufacturing plants outside Special Economic Zones (SEZs) and
SEZs through the Semiconductor Policy introduced in 2007. This policy was
announced by Government of India to draw investments in semiconductor
fabrication by providing special incentives for manufacturing of all semiconductors
and solar photovoltaic cells.
In 2009, MNRE launched the Jawaharlal Nehru National Solar Mission (JNNSM)
with the ambitious goal of making India a global leader in solar energy. Jawaharlal
Nehru National Solar Mission in 2010(JNNSM) with a target of achieving 20 GW
by 2022, which was achieved 4 years ahead of schedule.
"Solar Energy Corporation of India ltd" (SECI) is a CPSU under the
administrative control of the Ministry of New and Renewable Energy (MNRE), set
up on 20th Sept, 2011 to facilitate the implementation of JNNSM and achievement
of targets set therein.
NISE is an autonomous specialized institute under the Ministry of New and
Renewable Energy (MNRE), Government of India, mandated for research and
development, solar component testing and certification, capacity building, and
development of solar products and applications.
After Government of India declared JNNSM in the year 2010, Karnataka and
Rajasthan came up with their solar policy in 2011, Similarly Andhra Pradesh,
Chhattisgarh, Madhya Pradesh, Punjab and Tamil Nadu announced its solar
policies in 2012 and thereafter hands of Jammu and Kashmir, Jharkhand, Kerala,
Uttar Pradesh and Uttarakhand who issued their policies in the year 2013.
In the end of year 2014, the target was revised to 100 GW of solar capacity by the
year 2022. International Solar Alliance formed in December 2015.The solar
installed capacity of India has reached 44.3 GW as on 31 August 2021.
Requirement of solar policy in India
As stated earlier, the energy sector was primarily driven by the use of coal as a fuel
source, while renewables accounted for 0% of the entire energy sector. Many
authors attribute the growth of any industry to vitality, supply, and access. The
electrical capacity in the country was 1350 MW in the year 1947, which has
increased more than 100 times to a staggering 160000 MW in 2018. It has further
been projected that the next 7 years will see a demand of 90000 MW to meet the
basic electrical needs.
Figure 1: Installed capacity in India through Solar technology.
Source: Solar energy (irena.org)
Also the IEA (International Energy Agency) projected India to be the second
largest contributor to global energy demand by 2035. Studies indicate that although
the development of new technology directly leads to greater productivity and better
lifestyle, it simultaneously brings about socioeconomic changes in the society
which may be resisted by the people.
The key elements in the Indian energy strategy are awareness, grid parity and cost
competitiveness and cost effectiveness. A solid and stable policy is needed to
achieve these. Subsidizing renewable energy generation is a step in that direction,
but research shows that subsidized renewable energy generation is still 50% more
expensive than conventional means of production. To achieve all the above goals,
policies towards development of solar energy are the need of the hour.
As noted in several published works, India's geography and location result in
abundance of solar resources in India. This abundance of solar resource gives a lot
of flexibility to the policy makers for the development of solar energy in the
country. The abundance of solar energy throughout the year makes it a viable
source to meet the energy demands of the country.
Major Solar policies in India
Who are the decision-makers in India?
The Ministry of New and Renewable Energy (MNRE) is the nodal ministry of the
Government of India for all matters relating to new and renewable energy. The
overarching objective of the Ministry is to develop and deploy new and renewable
energy to meet the energy requirements of the country. They provide direct and
indirect tax benefits such as sales tax, excise duty exemption and customs duty
Since 2000, various initiatives have been taken by the Government of India to
promote solar energy in the country. Various policies announced by the Central
and State Governments to promote solar energy in the country and the salient
features of these regulations and policies are discussed in the following sections.
1. Electricity Act - 2003
It states that “under the National Electricity Policy Plan, Central Government in
consultation with the State Government will develop policy and plans for
development of power system based on renewable sources of energy and other
conventional energy sources.”
The Act provides a framework for the overall development of the power sector in
India. It provides for preferential tariffs and quotas for choosing renewable energy.
Compulsory purchase of renewable energy and facility of grid connectivity for
distribution licensees were included.
2. National Electricity Policy, 2005
The policy allows preferential tariffs for electricity produced from renewable
energy sources. The share of power from renewable sources will have to be
increased progressively, with distribution companies procuring on the basis of
competitive bidding. The Commission needs to determine a suitable differential fee
for promoting these technologies, it aims to provide electricity to all and raise the
minimum per capita availability to 1000 kWh per year by 2012.
3. Tariff Policy -2006
The 2006 Tariff Policy was implemented in continuation of the 2005 National
Energy Policy. It is a mechanism of Renewable Purchase Obligation (RPO) to fix
minimum percentage of purchase of energy consumption by states from renewable
energy sources. The Tariff Policy provided that, initially the appropriate
Commission is to fix preferential tariffs for distribution utility to procure
Renewable Energy (RE), in future, distribution utility to procure RE technology
through competitive bidding within suppliers offering same type of RE.
The Tariff Policy was further amended on 31 March 2008, 20 January 2011, 8 July
2011 and the last revision was notified on 28 January 2016. This amendment added
some objectives to the original tariff policy as there was a greater focus on
renewable energy and hydropower to facilitate adequate and uninterrupted supply
of electricity to the consumers.
4. Integrated energy policy -2006
This integrated policy recommended a particular focus on renewable energy
development and set specific targets for capacity addition. Recognizing the
anticipated growth in demand for conventional sources of energy as well as the
adverse impacts and inadequacies of supply, the policy proposed the following in
respect of solar energy.
I. It required electricity regulators to look for alternative incentive structures that
encourage utilities to integrate solar and other renewable energy sources such as
wind, small hydropower, and so on into their systems.
II. Electricity regulators are required to mandate feed in laws for solar power as
provided under the Electricity Act 2003.
5. Policy to encourage semiconductor industry
Semiconductor policy (2007) was announced by Government of India to draw
investments in semiconductor fabrication by providing special incentives for
manufacturing of all semiconductors and solar photovoltaic cells.
Karnataka semiconductor policy (2010),The Semiconductor policy was
supported by Karnataka Renewable Energy Policy which aimed at providing
support and assistance to Solar PV manufacturing units in State. Karnataka
government has become the first state to announce its semiconductor policy to
encourage the solar power sector. The state government focused on the entire value
chain of solar energy, as it provided an enabling policy to attract investments in
manufacturing of solar PV.
6. National action plan on climate change (NAPCC) -2008
Government of India launched Mission Mode Action Plans for Sustainable
Development under NAPCC to address climate change. Its first mission was to
accelerate solar energy development. It earmarks the National level target for RE
Purchase from 5% of total grid purchase in 2010 to 15% by 2020 by increase of
1% each year for next 10 years from 2010.
7. Generation Based Incentives (GBIs) for Solar -2009
This scheme targeted mainly the small grid solar projects of less than 33 kW. The
GBI is aimed to lower the gap between the base tariff of Rs 5.5 and the tariff
imposed by the Central Electricity Regulatory Commission (CERC) as a fiscal
8. Jawaharlal Nehru National Solar Mission -2010
Jawaharlal Nehru National Solar Mission is a flagship initiative of the Central
Government with active participation of the States to promote ecologically
sustainable development while addressing the challenges of energy security and
energy poverty. Before JNNSM, the solar capacity of the country was a mere
In 2010, MNRE launched the Jawaharlal Nehru National Solar Mission (JNNSM)
with the ambitious goal of making India a global leader in solar energy. Jawaharlal
Nehru National Solar Mission (JNNSM) in 2010 with a target of achieving 20 GW
by 2022. In the end of year 2014, the target was revised to 100 GW of solar
capacity by the year 2022.
9. Renewable Energy Certificates (RECs) -2011
A market-based mechanism to enhance renewable energy capacity by leveling the
inter-state diversion of renewable energy generation to REC and the requirement of
entities obliged to meet their RPOs with different pricing for solar and non-solar
was introduced in 2011.
10.Clean Energy Cess -2010
In 2010, an amount of Rs 50 was introduced for every tonne of national or
imported coal used in the country. A National Clean Energy Fund (NCEF) created
from the cess aims to finance clean energy projects through the Indian Renewable
Energy Development Agency (IREDA) and provide up to 40 percent of the total
cost of RE projects. Cess has now been raised to Rs 400 per tonne on used coal.
11.Joint Liability Group (JLG) for Off-grid installations
By synthesizing business and social potential, a small group of 4-10 local
entrepreneurs in the form of JLGs help in getting loans for non-farm activities
which can be applicable for micro-grid establishments.
12. Corporate Social Responsibility (CSR)
In order to encourage private sector participation in national development and to
meet social goals like pollution free production, CSR funds are channeled by top
500 companies towards off-grid solutions as 2% of their profits
7 Mn Sq m. 15 Mn Sq m. 20 Mn Sq m.
Off Grid Solar
200 MW 1000 MW 2000 MW
1000-2000 MW 4000-10000 MW 20000 MW
Table below shows the phase wise targets of JNNSM;
S.No. State Policy Name Operative
1. Andhra Pradesh Andhra Pradesh Solar Policy 2018 2018–2023 5,000 MW
2. Haryana Haryana Solar Power Policy 2016 2016–2023 3200 MW
3. Gujarat Gujarat Solar Power Policy 2021 2021–2025 8,024 MW
4. Jammu and
Jammu and Kashmir Solar Energy
1300 MW (Grid
Connected 33 kV –
1000 MW; Rooftop
PV and Small Solar
100 MW; Off – Grid
Applications 200 MW
5. Jharkhand Jharkhand Solar Policy 2013 –
2013-2018 500 MW – 2017; 1000
MW – 2022
6. Karnataka Karnataka solar policy 2014–2021 2014–2021 2000 MW
7. Kerala Kerala Solar Power Policy 2013 2013 till
500 MW; 2500 MW –
8. Madhya Pradesh Madhya Pradesh Solar Policy 2012 2012-2017 -
9. Orissa Odisha Solar Policy 2013- Draft 2013–2017 -
10. Punjab Punjab New & Renewable Sources
of Energy Policy 2012
2012–2017 200 MW
11. Rajasthan Rajasthan Solar Energy Policy
2019-2025 30000 MW
12. Tamil Nadu Tamil Nadu Solar Policy 2019 2019-2023 9000 MW
13. Uttrakhand Solar Energy Policy of Uttrakhand
500MW - 2017
14. Uttar Pradesh Uttar Pradesh Solar Power Policy
2013-2017 500MW -2017
13. State specific solar policies
Source: Various State Governments’ Solar Energy Policies
International solar alliance
International Solar Alliance (ISA) is a joint venture of 121 solar rich countries with
a vision to provide a dedicated platform for cooperation between countries to
promote the global development of solar power generation.
ISA is headquartered at the National Institute of Solar Energy (NISE) in the city of
Gurugram in the state of Haryana, India, an organization dedicated to the research
and development of solar energy.
In the Indian perspective, the target set under the ISA is to achieve an installed
capacity of 175GW by 2022, of which solar accounts for 100GW. Globally, ISA
aims to deploy 1000GW of solar power generation with an investment of $1000
One Sun One World One Grid Initiative
Honorable Prime Minister of India, Shri Narendra Modi, at the first meeting of the
International The Solar Alliance (ISA) called for linking solar power supplies
across borders in October 2018.With the vision of 'One Sun One World One Grid'
(OSOWOG). The concept behind OSOWOG is 'The Sun Never Sets' and is stable
at certain geographic locations globally, at a given time.
The basic concept behind OSOWOS is to develop a trans-national grid to be laid to
transport the generated solar energy across the globe to different load centers .Thus
it will help in realizing the vision of "One" Sun, One World, One Grid” articulated
The OSOWOG study will be implemented in three phases. In the first Phase, the
Indian Grid interconnects with the Middle East, South Asia, and Southeast Asia
grids to share solar and other renewable energy resources for meeting electricity
needs including during peak demand. It is then interconnected with the African
power pools in the second Phase and the third phase would vie for global
interconnection of the power transmission grid to achieve the One Sun One World
One Grid’s vision.
Although the project is yet to be implemented at the ground level, it has a lot of
potential. The whole world is battling with the pandemic and there are really
stringent environmental norms. It is necessary to maintain it in order to save the
world from future natural calamities. OSOWOG can definitely help with this. This
will promote eco-friendly energy production.
The kind of transparency that has been taken by India so far in the context of this
scheme, it will continue to get support at the global level. The promotion of
renewable energy through OSOWOG will achieve the goal of energy sustainability
across international borders. The successful implementation of OSOWOG will
help in mitigating the current energy challenges of the world and give India a huge
strategic edge at the global level.
The move is the key to future renewable energy based energy systems on a global
scale as regional and international interconnected green grids can enable the
sharing and balancing of renewable energy across international borders.
This article will help you understand the policies for the development of solar
energy in India and the need for solar policy in India.
The development of solar sector in India is seen through various initiatives since
independence. Solar saw transition from a sole responsibility to strengthen society
opportunities for socio-economic development in India. However, solar before this,
supportive policies are needed for its continuous development can survive on its
own. Solar has become a business offer and equitable contribution to investors in
the country for the growth of the economy, as its returns are visible to triple that is,
economically, socially and environmentally.
1. K. Kapoor, K. Pandey, A. Jain and A. Nandan, "Evolution of solar energy in India: A
review", Renewable and Sustainable Energy Reviews, vol. 40, pp. 475-487, 2014.
2. G. Prabhu, "Tejas Article : Evaluating the future of Indian solar
industry", Tejas.iimb.ac.in, 2021. [Online]. Available:
3. M. Goel, "Solar rooftop in India: Policies, challenges and outlook", Green Energy &
Environment, vol. 1, no. 2, pp. 129-137, 2016.
4. G. Raina and S. Sinha, "Outlook on the Indian scenario of solar energy strategies:
Policies and challenges", Energy Strategy Reviews, vol. 24, pp. 331-341, 2019.
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