Role of policy in deployment of wind energy: evidence across states of India

This paper is an enquiry into the role of State policies in influencing wind installed capacity. The paper studies the impact of policies on deployment of wind potential across the States of India over two decades. Aggregate indices are computed for each of the seven wind resourceful States of India indicating attractiveness for installed capacity of wind energy. For computing the indices, four policies, Feed-in-Tariff, Renewable Purchase Obligation, Banking facility, and Wheeling charges are considered. Panel data techniques are then employed to investigate the impact of the policy differences on wind potential deployment over the 19 year period (1993-2012) after controlling for three State-specific factors. The controlling factors include per-capita income of the State, power deficit, and ratio of installed capacity of wind to geographic potential indicating unmet capacity. The results show that that policy index positively impacts wind deployment whether control variables are included or not. Moreover, the control factors like the per-capita income of the State and unmet capacity have positive influence over the investment in wind energy.