Local community as shareholders in clean energy projects: Innovative strategy for accelerating renewable energy deployment in India

Abstract

The government of India is promoting renewable energy sector with an ambitious target of 175 GW capacity, to be achieved by 2022. The reasons for this energy transition from fossils to renewable energy technologies include facilitating energy access, promoting cleaner forms of energy and enhancing energy security. The huge capacity shall require about 200,000 ha of land. However, land procurement has been identified as a key impediment in accelerating the growth of renewable energy sector in India. This presents an exciting business opportunity towards setting up community energy projects under community mode with the local people as shareholders. Community members can provide their land for setting up renewable energy projects as well as support in project development activities in lieu of getting upto 15% equity participation. This shall provide them with a constant source of income, estimated at over US $ 4000 per hectare per annum, besides facilitating energy access in villages. Quicker possession of land shall expedite project execution and the reduced capital expenditure shall decrease the cost of energy generation by upto 6%. Policy makers in emerging economies like India can pilot the proposed model in upcoming solar parks and wind farms.