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Renewable Portfolio Standards and financial incentives
In the absence of a national renewable energy policy, ten out of the 29 Indian States have now implemented quotas for a renewable energy share of up to 10% and have introduced preferential tariffs for electricity produced from renewable sources. In addition, several states have implemented fiscal and financial incentives for renewable energy generation, including; energy buy back (i.e. a guarantee from an electric¬ity company that they will buy the renewable power produced); preferential grid connection and transportation charges and electricity tax exemptions.

Feed-in-tariffs
Some states with Renewable Portfolio Standards (RPS) or other policies to promote wind generation, have introduced feed-in-tariffs for wind generation which are higher than that for conventional electricity.

The need for an improved national policy framework
India’s tremendous wind energy resource has only been partially realized due to the lack of a coherent national renewable energy policy. Currently, the promotion of renewable energy in India is mainly driven by state govern¬ments, but inconsistent implementation and the lack of a national policy is hampering genuine progress. While some states have set high renewable portfolio standards, other states only have low or no targets, and enforcement is insufficient. Furthermore, while in theory, RPS and feed-in-tariffs can coexist, this needs to be well managed to avoid inefficiencies.

To boost investment in renewable energy, it is essential to introduce clear, stable and long-term support policies. A number of policy measures at national level, which could be applied concurrently, would significantly improve the framework for renewable energy in India. However, they must be carefully designed to ensure that they operate in harmony with existing state level mechanisms and do not lessen their effectiveness.

A number of policy measures outlined below are already in various stages of being drafted at national level, and some have been initiated by a number of states. It is recommended that these are treated with urgency and implemented at the national level wherever possible.

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