Innovative financing solutions is needed in order to scale India’s renewable energy markets and widespread job creation, according to an analysis by the Natural Resources Defence Council and the Council on energy, Environment and Water.

Access to low-cost finance needs to be improved using diverse financial mechanisms such as infrastructure debt funds, priority sector lending and tax incentives.

INVESTOR CONFIDENCE

These may include accelerated depreciation and tradable tax certificates, says the analysis.

Investor confidence may be enhanced by strict enforcement of Renewable Purchase Obligations and nurturing the Renewable Energy Certificate market.

Generation based incentives and penalties may be used in combination with any form of viability gap or tax related capital subsidies.

A ‘green bank’ may be promoted and green bonds, capitalised through the National Clean Energy Fund from the Central or State Governments, may be used to leverage more private investment in renewable energy.

The analysis noted that solar and wind programmes have catalysed rapid growth providing much needed energy access and creating employment opportunities.

RAPID PACE

The solar industry has been maturing at a rapid pace, growing more than by a hundredfold in four years to reach over 2.6 GW of installed capacity in 2014.

India is now the world’s fifth largest wind energy producer, with over 20 GW of installed capacity.

Solar photovoltaic projects commissioned between 2011 and 2014 created approximately 24,000 full time-equivalent jobs.

Smaller projects up to 5 MW in size may provide the most employment opportunities per MW, the analysis found.

Local communities are the main beneficiaries of employment of wind power projects during the operations and maintenance phase.

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