Finance Mechanisms and Policies for Solar Sector in India: A Review

Karan Gathiyal, Priyanka Jain

karangathiyal@gmail.com, priyajain200@rediffmail.com
Department of Electronics and Communication, Delhi Technological University, New Delhi

ABSTRACT
Technological improvements in mass fabrication of solar cells have resulted in rapid decline in
production costs. Developed and developing countries have realized the necessity of solar sector
for sustained economic and ecological development. Even though the price of solar energy has
dropped significantly, it still remains much higher than those prices offered by its conventional
counterparts. To make solar projects commercially viable, it needs policy support from
government for the development and deployment. India through its national solar mission has set
up ambitious targets of achieving 100 GW (40GW through rooftops and 60GW through large
scale projects) of solar energy by 2022, while the current installed capacity is just at 5GW. To
scale and speed up projects, different policy mix or finance mechanisms were introduced. By
setting up regulations and policies, government tried to attract investments from foreign and
domestic lenders and also technological expertise in set up, operation and maintenance of power
projects to benefit an active and growing consumer base. This study analyzes the economic and
policy aspects of solar energy development and deployment through Jawaharlal Nehru National
Solar Mission (JNNSM). In this paper various financing mechanisms and regulations currently in
use for JNNSM are reviewed.