A Guided Procedure for Governance Institutions to Regulate Funding Requirements of Solar PV Projects

Energy is an essential key to the progress of humanity and economic development. With the recent population growth, more energy resources are needed to be explored to handle fossil fuel power generation deficiency in correspondence to electricity demand growth. These resources' deployment is governed by the policy regulating projects' funding. Based on the Indian scenario, although the current policy in India provides the renewable energy sector investors with a reasonable internal rate of return (IRR), it still shows deficiencies when facing the fast population growth and the expanding demand for further renewable energy projects with respect to the limited local income. This situation necessities a reformation in the resource regulating policies for matching with the upcoming needs. To this end, this paper proposes a guided procedure, mainly targeting governance institutions to regulate funding requirements of solar PV projects (as a very popular renewable energy source) to encourage local investments for meeting the electricity demand growth by focusing on India as a case study. The proposed procedure considers policy reform as a function of the current policy by developing a criterion function and using an optimization technique in a data management program to determine the appropriate combinations of regulations through weights assignment. Also, a sensitivity analysis is implemented on the IRR as a function of the regulations under study. The results show that policy reform is achievable through the best combination of project regulations.