ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Impact of Political Regime and Ideology on Renewable Energy Installations in India

The Indian renewable energy sector has seen two ideological shifts post 2014: one, focus shifted greatly to solar, and two, increased focus to competitive bidding in policy design. The paper examines if regime change and political ideology have any influence on the “type” of renewable energy. No convincing evidence is found of either a changed political regime or differing ideology of union and state governments on the trajectory of renewable energy installations once we control for other variables.

The importance of the renewable energy sector (RES) for developing countries, including India, which are facing numerous challenges in the form of burgeoning energy demand, peak power shortages, skewed access to electricity, and energy security issues, besides climate change mitigation is beyond doubt (Jenner et al 2012; Kathuria et al 2015; Uzar 2020). Since renewable energy technologies (RETs) are more expensive than conventional ones (Uzar 2020; Strunz et al 2016),1 as they require policy support, which is provided by the government through various incentives and policies (Shrimali et al 2017). There exists sufficient literature on testing the importance and effectiveness of these policies in different settings (Shrimali et al 2017; Panse and Kathuria 2016; Schmid 2012 [all for India], Carley 2009 [for the United States [US]], Marques et al 2010; Zhang 2013 [both for Europe], Ye et al 2017 [for China]). Of late, there is literature looking into the role of institutional quality on RET investment (Uzar 2020; Sequeira and Santos 2018; Cadoret and Padovano 2016). An understudied issue is, how these policies are moderated through political regimes. This omission is not only significant but also serious, as investment in RET is mostly a political decision (Cadoret and Padovano 2016).

The political economy literature, especially in the context of developed countries, has argued that investment or intervention by the government in RET is not a simple process but in response to multiple political factors: (i) pressure of lobbyists favouring RET; (ii) counter-pressure of lobbyists against RET; and (iii) expectation of votes (Cadoret and Padovano 2016).

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Updated On : 4th Dec, 2023
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