There has been Foreign Direct Investment (FDI) inflow to the tune of Rs.8569 Crores (US$ 1756 million) in the renewable energy sector during the last three years and current years (as on 31.12.2012). 100% FDI through automatic route is available to investors of Renewable Energy Projects. The government offers fiscal and monetary incentives to renewable energy developers to promote investment.
The Ministry of New and Renewable Energy organized an Investment Promotion meet at London, United Kingdom in June 2012 with a view to seek investment for setting up of renewable energy power projects in the country.
The Government has taken several steps to encourage development of renewable energy sector.Some of the key measure include private sector companies are partnering with government and co-investing in R&D and technology development. Fiscal and financial incentives, such as, capital / interest subsidies, accelerated depreciation, nil/concessional excise and customs duties.
Preferential tariff for grid interactive renewable power in most potential States following the provisions made under the National Electricity Policy 2005 and National Tariff Policy 2006, Uniform guidelines by CERC for fixation of such preferential tariffs being issued every year. Jawaharlal Nehru National Solar Mission launched to facilitate large scale capital investment in solar energy sector, Payment Security Mechanism for grid connected solar power projects under the Mission.
The Government also has a policy to encourage transfer of foreign technologies, including those in renewable energy sector. Foreign Direct Investment (FDI) upto 100% under the automatic route is permitted in Renewable Energy Generation and Distribution projects subject to provisions of Electricity Act, 2003.