The Government of India has ambitious renewable energy targets, but limited financial resources to meet those targets. CPI examines how much it would cost the government to reach its renewable energy targets, by comparing the levelized cost of electricity from renewable energy to a baseline fossil fuel in absence of any subsidies – whether explicit or implicit; estimating the total cost of support for renewable energy under accelerated depreciation to determine which is the most cost-effective of existing policies; and investigating federal policy options to make this support even more cost-effective. The paper is organized in five sections. After the first section of introduction, section 2 discusses the selection of imported coal as the baseline cost of electricity for comparison with renewable energy. Section 3 forecasts and compares the levelized cost of electricity from renewable energy and the baseline of imported coal. Section 4 examines the cost of government support for renewable energy under different policy pathways. Section 5 presents policy implications.
