Rent management and policy learning in green technology development: the case of solar energy in India

Rent management and policy learning in green technology development: the case of solar energy in India

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Altenburg, Tilman / Tobias Engelmeier
Discussion Paper 12/2012

Bonn: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

ISBN: 978-3-88985-555-8
Price: 6 €

To avoid irreversible damage to global ecosystems, new “green” technologies are needed. Some of those are still far from commercial maturity. In such cases, governments may create temporary rents to make investments “artificially” attractive. The creation of such rents, however, involves risks of misallocation and political capture. This article looks at rent management in the case of India's National Solar Mission. So far, the mission has been remarkably effective in triggering solar investments and keeping the necessary subsidies manageable through a process of competitive reverse bidding for tariffs. Moreover, policy design and implementation showed a good deal of experimentation and learning. Some risks remain, especially regarding the enforceability of renewable energy quotas at the level of Indian states. On the whole, however, first experiences indicate that “green rents” have been managed in a fairly effective way.

Tobias Engelmeier is Managing Director of BRIDGE TO INDIA Pvt. Ltd. (www.bridgetoindia.com), a consultancy focused on the Indian solar market.

About the author

Altenburg, Tilman

Economic Geographer

Tilman Altenburg

Further experts

Bauer, Steffen

Political scientist 

Brandi, Clara

Economist and Political Scientist 

Breuer, Anita

Political Scientist 

Haldenwang, Christian von

Political Scientist 

Hein, Jonas

Geographer 

Horstmann, Britta

Geographer 

Houdret, Annabelle

Political Scientist 

Koch, Svea

Social Scientist 

Leininger, Julia

Political Scientist 

Mehl, Regine

Political Scientist 

Messner, Dirk

Political Scientist 

Never, Babette

Political Scientist 

Pauw, Pieter

Environment Scientist 

Pegels, Anna

Economist 

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