Cohesive regulatory framework key for non-fossil fuel sector to boost investor confidence

A cohesive regulatory framework at both national and state levels is critical to boosting investor confidence and achieving India’s ambitious non-fossil fuel targets, a CRISIL expert said on Tuesday.

The government has set a target of creating 500 GW of non-fossil fuel-based power generation capacity by 2030, a key pillar of India’s climate commitments and energy transition strategy. Non-fossil fuel capacity includes renewable and clean energy sources such as solar, wind, biomass, waste-to-energy and large hydro projects.

According to the CRISIL expert, consistency in policy implementation, clarity in regulations and alignment between central and state governments are essential to attract long-term investments in the sector. Investors, particularly those funding large renewable energy projects, require predictable rules on land acquisition, grid connectivity, power purchase agreements and tariffs to ensure project viability over decades.

The expert also noted that while India has made significant progress in adding renewable energy capacity in recent years, uneven regulations across states and frequent policy changes can create uncertainty and slow down investment decisions. A stable and harmonised framework would help lower financing risks, reduce the cost of capital and accelerate capacity addition.

As India pushes ahead with its clean energy transition, strengthening regulatory coherence is expected to play a crucial role in meeting the 2030 non-fossil fuel capacity target and sustaining investor interest in the sector.