Assessing the Effectiveness and Impact of Renewable Energy Law in India

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Title: Assessing the Impact and Effectiveness of Renewable Energy Law in India: An Incisive Policy Analysis


In the past decade, India has emerged as a global leader in the adoption of renewable energy sources. This shift is largely attributable to the innovative and extensive legislative measures put in place by the Indian government. As one of the fastest-growing economies, India has recognized the potentially harmful impact of traditional energy sources on the environment and has committed to a comprehensive legal framework promoting renewable energy. An assessment of the effectiveness and impact of these laws is essential to appreciate their influence on India’s energy landscape.

Legislation Background

The Electricity Act, 2003, was a pivotal moment in India’s renewable energy journey as it recognized the importance of encouraging non-conventional energy sources. It also facilitated private sector participation in the electricity industry, increasing competition, and innovation. The National Action Plan on Climate Change, 2008 (NAPCC), set ambitious targets for renewable energy capacity addition and introduced policies like the Renewable Purchase Obligation (RPO), feed-in tariffs, and capital subsidies to accelerate renewable energy penetration.

Renewable Energy Laws: A Policy Analysis

1. Renewable Purchase Obligation (RPO): Obligating distribution companies to purchase certain percentages of their total power from renewable sources has significantly boosted renewable energy demand in India. However, enforcement of RPOs has been inconsistent across different states, resulting in varying levels of compliance. Further refinement in monitoring mechanisms might be needed for this policy to fully realise its potential.

2. Feed-in Tariffs (FiTs): FiTs have been effective in promoting wind and biomass power projects by ensuring a guaranteed price for power supplied to the grid. However, setting FiTs at an appropriate level is a challenge. High FiTs can lead to excess profits for producers, while low FiTs can dissuade investments.

3. Capital Subsidies: While they have helped mitigate initial costs for developers and promoted small-scale renewable projects, these subsidies are often susceptible to budgetary constraints and uncertainties. A shift towards more sustainable support mechanisms might be beneficial.

4. Renewable Energy Certificates: While this market-based instrument was designed to help states with lower renewable potential meet their RPOs, the lack of enforcement of RPOs and oversupply have hindered its success.


While regulatory mechanisms have significantly contributed to India’s renewable energy growth, some critical gaps need addressing. Inefficient enforcement mechanisms and a lack of uniformity in state policies can hamper growth momentum. Moreover, issues related to land acquisition, grid connectivity, power evacuation and tariff fixation posed by various state laws need resolution.

The laws have not only impacted the energy sector but have also influenced environmental conservation efforts, job creation, and technological advancements. However, a lack of emphasis on research and development could potentially stagnate future progress.


India’s renewable energy law has been transformative, placing it amongst the world leaders in renewable energy adoption. However, for India to fully transition to a green economy, it is essential to identify and address policy gaps while promoting investor-friendly norms. This will ensure not just the expansion of renewable energy but also its long-term viability. Creating robust regulatory frameworks that encourage research and innovation could be instrumental in achieving India’s ambitious renewable energy targets while safeguarding its environmental interests.

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