An Econometric Analysis of Electricity Consumption from Renewable Energy in India

Abstract

In the wake of the oil crises of the 1970s, the world found itself at the crossroads, confronted by the vulnerability and volatility of over dependence on fossil fuels. These transformative events ignited a paradigm shift towards renewable energy sources, with solar energy emerging as a beacon of hope. Solar energy offered a viable means for achieving the elemental goal of greener, sustainable as well as economical and efficient energy resource for driving industrial growth. It provided an opportunity to reduce excessive reliance on imported oil, decrease carbon emissions, and thus create a more decentralized and resilient energy infrastructure. This study aims to verify the link between the progressive increase in solar energy consumption and the country’s economic advancement. The study also focuses on the how the Indian Government has invested in and employed the potential of solar energy after 1990, i.e., after becoming a liberalized economy by adopting the LPG (Liberalization, Privatization and Globalization). In this context, the present paper determines the main driving forces of solar energy consumption in India during 2007–2022. The time series data of solar energy generation and domestic energy consumption are retrieved from Energy Statistics Data published by Ministry of Statistics and Program Implementation. The data has been analyzed by using the Compound Annual Growth Rate (CAGR) renewable energy generation as well as domestic electricity consumption. Furthermore, Simple Linear Regression technique has been used to measure the impact of REG on domestic electricity consumption.