Paper short abstract:

The Indian government has embarked on an ambitious strategy to increase its solar power capacity to 100 GW by 2022. This paper will examine the political economy challenges associated with doing this in very little time and with very little policy space, with regards to manufacturing capacity.

Paper long abstract:

The Modi Government has embarked on an ambitious solar energy strategy over the past few years. The aim is for India's solar energy capacity to reach 100 GW by 2022, with the current capacity at a little over 7 GW. To achieve such targets, the government has initiated a number of reforms including making land acquisition much easier but it has also opened up bids on several solar energy projects across the country on a competitive basis. Those positive about the strategy have highlighted that this has resulted in solar power becoming cheaper than thermal power in India. However, there are serious questions about whether this is negatively impacting India's local manufacturing capacity in the solar energy sector and whether it is creating long-term dependency on foreign technology. Such dangers came to a head when the United States won a WTO ruling against India's local content requirements for solar energy investments in 2016.

This paper builds on 25 interviews undertaken with firms, government officials and consultants between March and April 2016. It will aim to highlight the political economy challenges associated with India's solar energy strategy thus far, particularly in relation to the speed of the strategy and the minimal space in which manufacturing capacity may be developed. It will aim to contribute to broader discussions about the political economy of India in relation to the consequences of market-led reforms. It will also showcase the new distribution of power that is accompanying clean energy transitions globally.