Rajasthan and Gujarat, India’s leaders in renewable energy, are urged to implement policy adjustments to sustain their progress, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
Vibhuti Garg, IEEFA’s director for South Asia, noted that while slower states need to ramp up clean energy efforts, even leading states like Rajasthan and Gujarat should monitor and fine-tune their strategies to avoid losing momentum.
A notable gap identified is Rajasthan’s absence of an incremental green tariff, which could drive demand for renewable energy. Energy analyst Tanya Rana suggests Rajasthan could benefit from introducing a premium pricing mechanism, which would enable consumers to procure renewable power affordably, encouraging investment without high upfront costs. Meanwhile, Gujarat, which has an existing green tariff, is advised to refine its regulatory framework to avoid deterring consumers.
The report also recommends that both states adopt green budgeting to prioritize investments in renewable technology and integrate distributed renewable energy (DRE) into their planning. Currently, distributed solar comprises only 7% of Rajasthan’s and 15% of Gujarat’s total renewable energy capacity. Promoting DRE could reduce pollution, create jobs, and support renewable targets.
IEEFA further advises establishing dedicated infrastructure funds to finance large-scale renewable projects, providing the capital necessary for Rajasthan and Gujarat to achieve ambitious energy goals.