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Solar energy, Public auctions, Quality standards, Local content requirements, Industrial development, Technological upgrading, Derisking renewable energy investment, India, National Solar Mission
Abstract:
Solar technology diffuses across the globe as countries transition from fossil to renewable energy. Little solar-specific experience and capacity in newly adopting countries can result in technical failures and lower solar plant performance. This contributes to making the investment in solar plants in newcomer countries risky and may undermine political targets of solar energy deployment. One solution suggested by international organizations is for policymakers in adopting countries to include international quality standards as technical requirements in public auctions. Here, we develop a conceptual framework on how international quality standards could help build a solar sector. As a case study, we analyze the explanatory factors of technical requirements in 100 public auctions of utility-scale solar photovoltaic plants carried out in India between 2013 and 2019. Our findings suggest that more international quality standards are required in auctions in which the government rather than a private actor ultimately carries the commercial risk. On the other hand, local content requirements and attracting foreign investors do not correlate with technical requirements. We argue that using minimal quality standards is unlikely to promote local technological catch-up or attract long-term foreign investments but transfers the techno-commercial risk from the government to the private sector.
