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Master's Research

Assessing an investor’s decision to invest in solar power across Indian states
Student Name : Ms Suramya Sharma
Guide : Dr Gopal K Sarangi
Status : Completed
Year : 2017
Host Organization : TERI University
Supervisor (Host Organisation) : Dr Som Mondal

Abstract

Development of solar power, in India, has been picking up pace in the recent years. The installed capacity of solar power has been rising exponentially in almost all the states of the country, out of which states like Rajasthan, Gujarat, and Tamil Nadu have maintained their top spots over the years. With the introduction of several policies by the central government to cut down the cost of installation of solar power, states like Haryana, Karnataka, Andhra Pradesh etc are taking over the lead to meet the ambitious target of 100 GW by 2022. Though a significant growth in the installed capacity has been witnessed in a few states, so it will be of interest to explore whether the other underdeveloped states can achieve the same.

The thesis examines the feasibility of solar generated electricity in various states of India. The decision by an investor to invest in solar power in a particular state depends on several economic and socio-political factors. Out of them, the paper analyses three crucial factors that affect the investment decision that are:
1. The cost of generating solar power over its lifetime;
2. The effectiveness, friendliness of the policies (such as land allocation, tax incentives etc.) laid by the state and central government to promote solar power;
3. Finally, a socio-political indicator of states (Corruption).

At present, the latest bid results, to develop the worlds largest solar power plant of 750MW in Rewa, Madhya Pradesh have confirmed the plummeting solar prices, which in some states has already reached grid parity. The study will not only analyze the economics behind the solar projects, but also indicate whether the existing and prospective policies of the government have been successful in attracting the investors to invest in such projects or not.

Keywords: Investment decision, Solar PV, Cost, Solar Policy, Corruption
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