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The effectiveness of domestic content criteria in India's Solar Mission

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  • Sahoo, Anshuman
  • Shrimali, Gireesh

Abstract

Often, a goal of renewable energy policies is the development of domestic renewable energy technology manufacturing capacity. The Jawaharlal Nehru National Solar Mission (NSM) in India is an example; besides targeting an installation of 20GW of grid-tied solar power capacity, it includes a domestic content requirement (DCR) to strengthen a solar photovoltaic manufacturing base. We ask whether the DCR of the NSM will be effective in ensuring the global competitiveness of the beneficiary sector. Our analysis reveals three observations that indicate this outcome is unlikely: (1) the manufacturing base has become less competitive over time, (2) developers may be favoring thin-film technology, thereby bypassing the DCR, which applies specifically to crystalline silicon cells and modules and (3) gaps in the Indian innovation system are likely to prevent a return to competitiveness by solar photovoltaic manufacturers. In particular, a comparison with the Chinese innovation system indicates shortcomings in the Indian innovation system of R&D capabilities, coordination of resource provision and complementary industrial strengths. Given these observations, we suggest that policymakers remove the solar photovoltaic DCR from the NSM.

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  • Sahoo, Anshuman & Shrimali, Gireesh, 2013. "The effectiveness of domestic content criteria in India's Solar Mission," Energy Policy, Elsevier, vol. 62(C), pages 1470-1480.
    • Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:1470-1480
    DOI: 10.1016/j.enpol.2013.06.090
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    2. Hansen, U.E. & Nygaard, I. & Morris, M. & Robbins, G., 2020. "The effects of local content requirements in auction schemes for renewable energy in developing countries: A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 127(C).
    3. Rasmus Lema & Björn Johnson & Allan Dahl Andersen & Bengt-Åke Lundvall & Ankur Chaudhary (ed.), 2014. "Low-Carbon Innovation and Development," Globelics Thematic Reviews, Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management, number low-carbon, September.
    4. Hairat, Manish Kumar & Ghosh, Sajal, 2017. "100GW solar power in India by 2022 – A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 1041-1050.
    5. Rai, Varun & Funkhouser, Erik, 2015. "Emerging insights on the dynamic drivers of international low-carbon technology transfer," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 350-364.
    6. Hastings-Simon, Sara & Leach, Andrew & Shaffer, Blake & Weis, Tim, 2022. "Alberta's Renewable Electricity Program: Design, results, and lessons learned," Energy Policy, Elsevier, vol. 171(C).
    7. Shrimali, Gireesh & Sahoo, Anshuman, 2014. "Has India׳s Solar Mission increased the deployment of domestically produced solar modules?," Energy Policy, Elsevier, vol. 69(C), pages 501-509.
    8. Xiong, Yongqing & Yang, Xiaohan, 2016. "Government subsidies for the Chinese photovoltaic industry," Energy Policy, Elsevier, vol. 99(C), pages 111-119.
    9. Lema, Adrian & Lema, Rasmus, 2016. "Low-carbon innovation and technology transfer in latecomer countries: Insights from solar PV in the clean development mechanism," Technological Forecasting and Social Change, Elsevier, vol. 104(C), pages 223-236.
    10. Purohit, Ishan & Purohit, Pallav, 2018. "Performance assessment of grid-interactive solar photovoltaic projects under India’s national solar mission," Applied Energy, Elsevier, vol. 222(C), pages 25-41.
    11. Nihit Goyal, 2021. "Limited Demand or Unreliable Supply? A Bibliometric Review and Computational Text Analysis of Research on Energy Policy in India," Sustainability, MDPI, vol. 13(23), pages 1-23, December.
    12. Anil Nair & Orhun Guldiken & Stav Fainshmidt & Amir Pezeshkan, 2015. "Innovation in India: A review of past research and future directions," Asia Pacific Journal of Management, Springer, vol. 32(4), pages 925-958, December.
    13. Bhupesh Verma & Ganeshprasad Pavaskar & Tobi Oluwatola & Aimee Curtright, 2017. "State-level Policy Analysis for PV Module Manufacturing in India," Working Papers id:12193, eSocialSciences.
    14. Shrimali, Gireesh & Agarwal, Navin & Donovan, Charles, 2020. "Drivers of solar deployment in India: A state-level econometric analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).

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