Enabling policy and regulatory environment for solar power development: Lessons in Asia-Pacific region

Solar energy democratizes energy access. It also has helped address price volatility that is typically associated with the use of imported fossil fuels and has received prominence particularly during crisis periods including oil price shocks. Countries such as Sri Lanka and Bangladesh took the lead to scale up the use of solar home systems in the 90’s providing income generation and social development in rural areas. A new cycle of solar development has taken place over the last 15 years propelled by the use of enabling policy and regulatory instruments, ramping up of solar manufacturing capacity in People’s Republic of China, the scaling up of clean projects through models such as solar parks that took off in India and replicated in other Asian countries including Cambodia. The declining cost of solar power coupled with the mobilization of long tenor concessional public financing (including multilateral support) has helped address key risks and crowd in private capital to the sector. Over time, there is a focus on energy storage for better utilization of solar power as well as offer value added services including for heat and water production, transport sector decarbonization and now green hydrogen. This expands the use case for solar power permitting it to play a more prominent role in meeting energy requirements in the region and particularly in the context of NDC commitments. Policy and regulatory instruments would also need to evolve to help meet these newer and more ambitious deployment plans.