Will India Find Its Place in the Sun With Solar Power?

A Chance to Shine

India has seized on solar power as a tool to exercise soft power for several reasons. For one, the country has firsthand experience with energy poverty and understands the plight of other states with limited fuel resources. For another, India is home to one of the world’s largest and most successful markets for solar power. The country has installed 23 gigawatts of generation capacity (enough to power more than 16 million homes) in the span of about four years using policies based mostly on market forces, rather than on subsidies. India’s private sector leads the domestic solar industry and includes some major corporations with deep pockets. And since the country lacks the investment capacity that China has parlayed into budding international partnerships through the Belt and Road Initiative, its expertise in solar power may be its best bet for forging trade and political ties with the developing world.

To test this strategy, India has focused much of its efforts with the ISA on sub-Saharan Africa. The region made a logical place for India to roll out its energy endeavor given its proximity to India — and China’s growing interest and investment there. Countries such as Tanzania, Ethiopia, Guinea, Mali, Niger, Burkina Faso and Madagascar signed onto the ISA treaty on the first day it was open for signatures, and since then, Nigeria, Ghana, Gabon and Benin have also joined. Outside the framework of the ISA, under which New Delhi has extended a $1.4 billion line of credit to members of the alliance, India has allotted $2 billion for solar projects in signatory states in Africa. It has also stepped up its outreach to countries across the continent over the past decade by holding summits with African leaders every three years.

Clouds on the Horizon

But India’s activities in Africa, in and beyond the ISA, also exemplify one of the difficulties its solar power diplomacy will face. If New Delhi takes too active a role in implementing the initiative, ISA member states could perceive it as an overbearing outside power. (What’s more, India’s ties with the African countries participating in the ISA haven’t always been smooth.) To ensure that ISA members see it as a benefactor rather than as an opportunist — a particular risk since India can’t afford to bring much of its own money to the table — New Delhi will have to work to create equal partnerships with local governments and businesses. Doing so could also help mitigate the Indian government’s strong tendency to bureaucratize domestic institutions, which could easily spill over to the ISA. The tariffs New Delhi recently imposed on imports of Chinese and Malaysian solar modules, however, will undermine the ISA’s market-friendly image.

Beyond the challenges of maintaining member countries’ goodwill, India will run up against some technical difficulties, too, as it works to promote and expand the ISA. The country is home to several prominent think tanks active in the sphere of climate change and energy policy, but it has yet to develop a robust solar manufacturing sector or spearhead serious research and development in solar technology. These deficiencies will hamper India’s efforts to position itself as a leader in solar power, though France’s contributions could help compensate for its shortcomings.

Then there’s the question of institutional overlap. The ISA emerged several years after the founding of the International Renewable Energy Agency (IRENA) in 2009. The more established organization, with close to 150 members, has its headquarters in resource-rich Abu Dhabi and benefits from the major role that Germany, an economic powerhouse and leader in renewables technology, plays in it. To prove its own unique value proposition, the ISA will need to differentiate itself from IRENA, renowned for achievements in energy policy and in facilitating the scale-up of renewables. Support from the world’s two great powers — the United States and China — could help set the ISA apart and make it more effective, but Washington has reportedly been ambivalent about the idea. Beijing, meanwhile, recently announced domestic subsidy cutbacks that may send companies in the Chinese solar industry looking for ways into developing markets. Given China’s formidable manufacturing and organizational capacity, any coordinated Chinese initiative to that end could easily overshadow India’s efforts to turn solar power into soft power gains.

Even so, with such a wide set of priorities, the ISA doesn’t necessarily need to meet all its goals to succeed. The organization’s initiatives in financing, training and innovation will go a long way toward increasing solar capacity in the developing world and perhaps make Gurugram — the fast-growing satellite city of New Delhi where the ISA is based — a solar hub along the way. So while the endeavor may fall short of India’s expectations as a conduit for geopolitical influence, it will lead the way to a brighter, more sustainable future for dozens of developing countries.