Financing Energy Efficiency in India: A Review of Current Status and Recommendations for Innovative Mechanisms
This report describes efforts to overcome barriers to energy efficiency in India and increase funding for related technologies and projects.
It outlines recent efforts by the government to boost funding for energy efficient technologies and projects. It recommends that seven mechanisms that might stimulate more financing for this aim:
- Establishing state-level clean energy funds, based on the concept that ratepayers should pay for some of the benefits of clean energy
- Using regulatory schemes to acquire energy efficient resources. A utility or government agency would buy energy savings and/or demand reductions from users at a predetermined rate.
- Promoting utility financing of these projects
- Mainstreaming energy efficiency in corporate loans
- Establishing an energy savings insurance facility. This would help alleviate the perception that these investments are risky, despite vendor guarantees.
- Creating a clean energy financing facility
- Designating energy efficiency as a priority lending sector
The report describes how each initiative would work, how it can help address some of the barriers to these projects and technologies and what steps and be taken to implement each mechanism in the Indian context.