Green Cities in India – The Trendsetters in Renewable Energy in India

published on 19th February 2021

On 3 December 2020, the Ministry of New and Renewable Energy of India („MNRE”) published an Office Memorandum stating that, according to the decision of Prime Minister Narendra Modi, every state in India should have at least one so-called Green City. These Green Cities should obtain 100 percent of their electricity consumption from renewable energy sources, e.g. via rooftop solar systems.

Every state in India should from now on design its state capital or a city being the state’s tourist hub as the so-called Green City. These Green Cities should be powered entirely by environmentally friendly electricity from rooftop solar systems, solar parks and waste-to-energy plants. In addition, e-mobility and e-vehicles should be used for public transport.

In order to implement the new Green Cities concept, many different programmes already in place in the field of renewable energy should be combined and further subsidised. For example, the already existing subsidy programme for e-mobility, the FAME-II programme, will now be explicitly extended to include the new Green Cities. In the field of solar energy, various business models should be recognised in order to achieve the Green Cities goal, including rent-a-roof/leasing models, RESCO, CAPEX, self-consumption and many more. The use of hybrid systems such as rooftop solar-wind-hybrid/rooftop solar-biomass-hybrid systems is also explicitly desired. In general, the focus should also be directed more towards waste-to-energy and thus power plants should be explicitly designed to use municipal waste for electricity generation as part of the Green City programme.

In order to make sure that the necessary solar parks are constructed, corresponding construction land should be designated by the state governments and subsidised by the central government. This should fulfil the essential prerequisite for the construction of the solar parks.

The decision to focus on Green Cities in the future is a big, yet necessary step for India to achieve its ambitious climate goals, including those set out in the Paris Agreement. In addition, India hopes to combat other problems in India at the same time, such as reducing the high levels of air pollution in Indian metropolises, lowering electricity prices on a permanent basis – a topic which often makes the headlines in cities like Mumbai, and improving the environment in general by planting large areas of trees in the city.

For foreign investors, this means, above all, a great opportunity to jump on the bandwagon of India's renewable energy at an opportune moment and to participate in the growth of the renewable energy sector and enjoy it reaping the benefits of granted subsidies.