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Decentralised RE is fuelling a parallel revolution, but power sector needs more policy fixes to spur investors

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A recent article on Project Syndicate, former chief economic adviser Arvind Subramanian and others have highlighted a rising trend of India's industrial and commercial consumers producing their own renewable power. In Tamil Nadu, for instance, such "captive" generation already accounts for over 28% of industrial electricity consumption, enabling many units with in-house solar power capacity to end their reliance on the public system (transmission and distribution utilities).

Subramanian and his co-authors have cheered the prospects of the larger units eventually servicing a wide range of consumers, starting with their suppliers, after meeting their own consumption needs. They call the development "reforms by stealth", because, in this process, the entrenched public monopoly in the electricity sector, a source for much fiscal discomfort and investor apathy for decades, is going to be "slowly and subtly" undermined. Such a positive turn is indeed good news for investors.