Solar federalism: What explains the variation in solar capacity additions by India’s states?

In 2014, India embarked on an ambitious effort to scale-up solar electricity. Despite a major top-level push by the central government, India’s states show stark variation in their performance as measured by installed utility-scale solar capacity. This paper seeks to explain that puzzle. We first code 19 of India’s states on utility-scale solar performance and classify them into categories of Achievers, Middlers, Laggards, and Marginals. We then identify plausible and testable factors of performance including solar irradiance, power deficits, distribution company financial health, coal costs, land access, and political alignment of the state with the central government. Overall, irradiance, distribution company health, coal costs, and land access were the most influential, but counter-intuitively, political alignment was minimally relevant. Achievers tended to have some favorable combination of irradiance, power deficits, distribution company health, coal costs, and in some cases land access. Marginals were associated with unfavorable Discom health, land access, and coal costs. Patterns for Middlers and Laggards were less clear. To identify additional state-specific factors that affected performance, we also carry out detailed case studies for three states - Karnataka (Achiever), Madhya Pradesh (Middler), and Maharashtra (Laggard). These show the importance of political and bureaucratic leadership, path-dependence, and interest group influence. Our findings highlight the challenges of energy transition pathways that may be relevant to other countries with similar federal systems.