As India scales renewable energy (RE) deployment to meet its recently announced target of installing 500 gigawatts (GW) of fossil-free capacity by 2030, it is critical that RE technologies be deployed considering the full range of their socioeconomic and environmental impacts. WRI’s ‘Framework to Assess the Sustainable Development Impacts of Renewable Power Technologies’ provides a structured approach to identifying and, where feasible, quantifying such impacts.

This analysis applies the framework to estimate the economic rate of return (ERR) associated with different renewable energy (RE) technologies in the Indian states of Maharashtra, Jharkhand, and Assam, extending our previous research where we applied the framework at the national level. In doing so, it aims to gain insight into the context-specific drivers of socioeconomic returns from RE deployment that can inform local technology choices and deployment policies to maximize the societal benefits of renewable energy.

The technologies assessed include solar photovoltaic and small hydropower for all three states, and additionally wind for Maharashtra. We consider the health, water, land, and climate impacts of RE deployment, along with traditional cashflows, relative to a coal baseline, in our ERR estimates. Certain relevant impacts, such as those on employment, energy security and some ecological impacts, are not captured in our quantitative estimates. We recommend that these be considered qualitatively, in conjunction with the ERR numbers.

Key Findings:

  • Among the three states, we find the highest rate of return in Maharashtra for all the technologies assessed, followed by Jharkhand and then Assam. Comparing relative returns of technologies within each state, we find the highest returns from wind in Maharashtra, solar PV in Jharkhand and small hydropower in Assam.
  • Local factors, such as the prevailing population and land-use patterns, water scarcity, and weather conditions, play a vital role in driving the ERR estimates.
  • Comparing our ERR estimates against a social discount rate value of 8 percent shows that all the assessed RE technologies, except solar PV in Assam, provide a sufficiently high return to society to justify public investment.
  • Although not all impacts can be economically quantified, our analysis underscores the need for including a wider set of sustainable development impacts in planning and deployment of renewable energy at the local level.