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Renewable Energy Land Policy: Solar Parks, Wind Farms, and Grid Infrastructure
Introduction
India’s renewable energy sector has emerged as a cornerstone of the nation’s climate commitments and energy security strategy, necessitating a comprehensive renewable energy land policy to guide land acquisition, utilization, and transmission infrastructure development. With the sector growing from 89.635 GW in 2022 towards the ambitious target of 500 GW by 2030, there is an increasing need to balance development objectives with agricultural sustainability, environmental protection, and community rights [1]. This transformation requires a deep understanding of the legal framework governing solar parks, wind farms, and grid infrastructure, including constitutional federalism, statutory provisions, and emerging jurisprudence that shape land rights in India.
The Ministry of New and Renewable Energy (MNRE) estimates that achieving India’s renewable energy targets may require between 50,000-75,000 square kilometers of land for solar installations and 1,500-2,000 square kilometers for wind infrastructure, representing approximately 2% of India’s total surface area [2]. This massive land requirement has catalyzed the development of specialized legal frameworks, from the National Solar Mission’s guidelines to state-specific policies addressing land lease arrangements, compensation mechanisms, and transmission corridor development.
Constitutional Framework and Federal-State Dynamics
Constitutional Division of Powers
The renewable energy sector operates within India’s federal constitutional structure, where electricity is a concurrent subject under the Seventh Schedule, necessitating coordination between Union and state authorities. Article 246 places “electricity” in the Concurrent List (Entry 38), while land remains a state subject under Entry 18 of the State List [3]. This jurisdictional framework creates a complex regulatory environment where renewable energy policy formulation occurs at the Union level while land acquisition and local approvals remain state prerogatives.
The Electricity Act, 2003, provides the foundational legal framework for renewable energy development, establishing regulatory institutions and market mechanisms. Section 86(1)(e) specifically mandates State Electricity Regulatory Commissions to “promote cogeneration and generation of electricity from renewable sources of energy” [4]. This provision creates binding obligations on state regulators to facilitate renewable energy development while respecting state sovereignty over land resources.
Recent Constitutional Developments
The Supreme Court’s decision in Mineral Area Development Authority v. Steel Authority of India (2024) has significant implications for renewable energy projects, particularly regarding state taxation powers over mineral-bearing lands that may be utilized for renewable energy installations. The Court’s holding that states retain taxation authority over mineral rights, subject to express Parliamentary limitations, affects the fiscal framework for renewable energy projects on mineral-rich lands [5].
Furthermore, the Court’s recent modification of its Great Indian Bustard order demonstrates judicial recognition of the renewable energy imperative. The Court constituted an expert committee to determine the feasibility of overhead versus underground transmission lines in Rajasthan and Gujarat, acknowledging the “intricate interface between conservation of an endangered species and the imperative of protecting against climate change” [6].
Solar Park Development Framework
National Solar Mission and Institutional Architecture
The Jawaharlal Nehru National Solar Mission (JNNSM), launched in January 2010 with an enhanced target of 100 GW by 2022, established the policy foundation for large-scale solar development. The Mission’s guidelines for solar park development prioritize government wasteland and non-agricultural land to expedite acquisition processes while minimizing displacement of agricultural communities [7].
MNRE’s December 2014 notification on the “Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects” provides the comprehensive regulatory framework for solar park establishment. The scheme mandates that solar parks must have “at least 5 acres per MW towards installation of solar projects” and requires state governments to identify suitable land with appropriate insolation levels near transmission infrastructure [8].
Land Acquisition and Compensation Mechanisms
Solar park development involves multiple land acquisition pathways, each with distinct legal implications. The Gujarat model, revised in 2020, establishes a 40-year lease structure with the first five years for park development and 35 years for generation activities. The policy mandates Rs. 15,000 per hectare annual rent plus applicable taxes, with security deposits of Rs. 200,000 per MW [9].
The compensation framework addresses both land acquisition and rehabilitation requirements. For projects requiring private land acquisition, the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act) apply, ensuring enhanced compensation and rehabilitation measures. However, solar park guidelines encourage minimizing private land acquisition through strategic site selection [10].
Specialized Solar Park Policies
State governments have developed nuanced policies reflecting local conditions and priorities. The Rajasthan Solar Energy Policy provides specific provisions for land allotment, including preferential rates for government land and streamlined procedures for land conversion from agricultural to industrial status. The policy establishes clear timelines for project development, with milestones for capacity installation and penalties for non-compliance [11].
Karnataka’s experience with the Pavagada Solar Park, involving lease agreements with approximately 1,800 farmers across five villages for 5,260 hectares, demonstrates both the potential and challenges of large-scale solar development. The project’s lease model provides annual payments to farmers while maintaining agricultural activities in non-solar areas, creating a framework for rural economic development alongside renewable energy generation [12].
Wind Energy Land Rights and Development
Wind Resource Assessment and Site Selection
Wind energy development requires extensive resource assessment and site identification, governed by the National Institute of Wind Energy’s technical guidelines. The legal framework recognizes wind energy’s unique land use characteristics, where installations occupy only 2% of wind farm area, facilitating continued agricultural activities [13]. This land use efficiency creates opportunities for multiple land use arrangements while ensuring minimal disruption to existing agricultural practices.
The National Wind Energy Policy emphasizes competitive bidding for wind project allocation, requiring coordination between central auction mechanisms and state land availability. The Central Electricity Regulatory Commission’s 2019 amendments to interstate transmission regulations specifically include renewable energy developers and wind park operators, facilitating grid integration [14].
Land Lease Arrangements and Community Participation
Wind farm development typically involves long-term lease agreements with landowners, spanning 25-30 years to align with project lifecycles. These arrangements provide annual rental income to farmers while preserving agricultural land use rights. Maharashtra’s wind energy policy exemplifies this approach, establishing standardized lease terms and annual payment structures based on wind turbine capacity and land area [15].
The wind sector’s land requirements differ significantly from solar installations, with transmission infrastructure representing the primary land acquisition challenge. Right-of-way acquisition for evacuation lines often involves multiple landowners and requires coordination between wind developers and transmission utilities. The Supreme Court’s Great Indian Bustard order initially mandated underground transmission lines in critical habitats, subsequently modified to allow expert committee recommendations on feasible approaches [16].
Wind-Solar Hybrid Projects and Land Optimization
The National Wind-Solar Hybrid Policy, 2018, promotes optimal land utilization through combined installations. The policy defines hybrid projects where either renewable source constitutes at least 25% of the other’s rated capacity, enabling improved capacity utilization factors and transmission infrastructure optimization [17]. This approach addresses land availability constraints while enhancing project economics through complementary generation profiles.
MNRE’s 2018 scheme for 2,500 MW of interstate transmission-connected wind-solar hybrid projects initially focused on battery storage integration, subsequently expanded to include pumped hydro, compressed air, and other storage technologies. This comprehensive approach recognizes storage infrastructure’s land requirements and regulatory frameworks [18].
Grid Infrastructure and Transmission Development
Transmission Planning and Land Acquisition
Grid infrastructure development for renewable energy integration requires systematic transmission planning and coordinated land acquisition strategies. The Central Electricity Authority’s National Electricity Plan emphasizes renewable energy evacuation infrastructure, necessitating proactive transmission capacity development ahead of generation additions.
The Power Grid Corporation of India Limited (PGCIL) manages interstate transmission development through competitive bidding and public-private partnership structures. PGCIL’s Infrastructure Investment Trust monetizes transmission assets to fund new construction, creating innovative financing mechanisms for grid expansion [19]. The company’s approach to land acquisition follows the Indian Telegraph Act, 1885, for transmission line right-of-way, providing specific compensation mechanisms distinct from general land acquisition frameworks.
Green Energy Corridors and Specialized Infrastructure
The Green Energy Corridor initiative, launched to facilitate renewable power evacuation, addresses transmission bottlenecks constraining renewable energy integration. Phase-I focuses on states with high renewable energy potential, establishing dedicated transmission infrastructure for wind and solar power evacuation. The project’s land acquisition strategy prioritizes government land while ensuring community consultation and environmental compliance [20].
Intrastate transmission development remains state responsibility, creating coordination challenges for renewable energy projects spanning multiple states. The Central Electricity Regulatory Commission’s connectivity and open access regulations provide frameworks for renewable energy developers to access transmission networks, but land acquisition procedures vary significantly across states [21].
Smart Grid Integration and Digital Infrastructure
The National Smart Grid Mission’s land requirements extend beyond traditional transmission infrastructure to include communication networks, advanced metering infrastructure, and grid management centers. Smart grid development involves coordination between power and telecommunications sectors, creating novel land use requirements and regulatory interfaces [22].
Energy storage infrastructure, particularly pumped hydro storage, requires substantial land areas and specialized environmental clearances. The National Electricity Storage Strategy emphasizes reducing grid connection costs and supporting storage facility construction, necessitating integrated land use planning for renewable energy and storage infrastructure [23].
Legal Challenges and Dispute Resolution
Land Acquisition Disputes and Compensation Issues
Renewable energy projects face increasing litigation regarding land acquisition procedures, compensation adequacy, and environmental compliance. Solar project developers encounter disputes over traditional grazing rights, easement claims, and family land ownership conflicts. The litigation pattern demonstrates the need for enhanced community consultation and transparent compensation mechanisms [24].
The Supreme Court’s intervention in transmission infrastructure development, particularly the Great Indian Bustard case, illustrates the complex balance between environmental protection and renewable energy development. The Court’s expert committee approach provides a template for resolving conflicts between conservation imperatives and climate mitigation objectives [25].
Environmental Clearance and Regulatory Compliance
Environmental clearance requirements for renewable energy projects involve multiple agencies and assessment procedures. Large solar parks require Environmental Impact Assessment under the EIA Notification, 2006, while wind projects require bird impact assessments and wildlife clearances. The clearance process coordination between environment and energy ministries affects project timelines and land holding costs [26].
Forest land diversion for transmission infrastructure follows the Forest (Conservation) Act, 1980, requiring prior Central Government approval. The compensatory afforestation requirements and forest clearance timelines significantly impact grid infrastructure development schedules and project economics [27].
Innovation in Legal Frameworks: Agrivoltaics and Multiple Land Use
Emerging legal frameworks address innovative land use models like agrivoltaics, enabling simultaneous agricultural and solar energy production. These systems require regulatory adaptation to address land classification, taxation, and subsidy eligibility issues. Research indicates agrivoltaic systems can maintain agricultural productivity while generating renewable energy, necessitating policy frameworks supporting multiple land use [28].
The legal framework for agrivoltaics involves coordination between agriculture and energy policies, affecting land revenue classification, agricultural subsidy eligibility, and electricity regulations. State governments are developing specific guidelines for agrivoltaic installations to address farmer concerns about soil fertility and groundwater impacts [29].
Contemporary Policy Developments and Future Directions
Ultra Mega Renewable Energy Parks
MNRE’s February 2022 notification establishing 50 GW ultra-mega renewable energy parks in Gujarat (Khavada) and Rajasthan (Jaisalmer) represents the sector’s largest land allocation initiative. Each 25 GW park requires unprecedented coordination between land acquisition, transmission development, and environmental clearance processes [30].
The ultra-mega parks utilize wasteland areas to minimize agricultural displacement while requiring substantial transmission infrastructure investment. The projects’ success depends on streamlined land acquisition procedures, environmental compliance frameworks, and community participation mechanisms ensuring local benefit sharing [31].
Technology Integration and Land Use Optimization
Digitalization initiatives, including blockchain-based land record management and satellite-based resource assessment, enhance land acquisition transparency and project planning accuracy. The Digital India Land Records Modernization program’s integration with renewable energy planning databases reduces documentation delays and ownership verification challenges [32].
Floating solar technology development on water bodies represents a land use alternative reducing terrestrial land requirements. The National Solar Mission’s amendments addressing floating solar installations require coordination between water resource management and renewable energy policies, affecting reservoir usage rights and fishing community livelihoods [33].
Interstate Coordination and Uniform Policy Development
The proposed national land acquisition policy for renewable energy projects aims to standardize procedures across states while respecting federal principles. The policy development involves consultation between MNRE, state governments, and renewable energy industry associations to address regulatory fragmentation and procedural delays [34].
Competitive Renewable Energy Zones (CREZ) concept development, inspired by international models, requires proactive transmission infrastructure development and coordinated land acquisition. CREZ implementation necessitates interstate agreements on resource sharing, transmission cost allocation, and revenue distribution mechanisms [35].
Economic Analysis and Investment Implications
Land Cost Impact on Project Economics
Land acquisition costs represent 8-12% of total project costs for utility-scale solar installations and 5-8% for wind projects, significantly affecting renewable energy competitiveness. The variation in land costs across states influences investment patterns and project site selection, with developers gravitating toward states with transparent land policies and reasonable lease rates [36].
The emergence of land leasing models provides alternatives to outright purchase, reducing upfront capital requirements while ensuring long-term land access. Lease arrangements with escalation clauses and revenue-sharing provisions create mechanisms for landowner participation in project economics, addressing community acceptance challenges [37].
Insurance and Risk Management
Renewable energy projects require specialized insurance coverage for land-related risks, including title disputes, environmental liabilities, and transmission corridor access. The insurance framework addresses force majeure events, regulatory changes affecting land use rights, and community opposition impacts on project operations [38].
Land title insurance products, emerging in renewable energy financing, provide protection against ownership disputes and encumbrance discovery. These products facilitate international investment by addressing due diligence concerns and providing recourse mechanisms for title-related losses [39].
Conclusion
India’s renewable energy land policy framework represents a dynamic intersection of constitutional federalism, environmental imperatives, and development priorities, requiring continuous adaptation to technological innovation and climate commitments. The sector’s growth trajectory from current capacity levels toward 500 GW by 2030 necessitates systematic policy evolution addressing land availability constraints, community participation mechanisms, and environmental protection requirements.
The legal architecture encompassing solar parks, wind farms, and grid infrastructure demonstrates sophisticated policy development responsive to diverse stakeholder needs while maintaining focus on renewable energy objectives. The National Solar Mission’s emphasis on wasteland utilization, wind energy’s multiple land use capabilities, and transmission infrastructure’s coordinated planning approach provide templates for sustainable renewable energy development.
Future renewable energy land policy directions must address emerging challenges, including technology integration, interstate coordination, and innovative land-use models such as agrivoltaics. The Supreme Court’s evolving jurisprudence on environmental protection and renewable energy development recognizes climate change mitigation as a constitutional imperative, requiring a balanced approach to conservation and development objectives.
The success of the renewable energy sector depends on continued innovation in land policy, focusing on streamlined land acquisition, improved compensation mechanisms, and enhanced community participation. The integration of digital technologies, standardized procedures, and transparent governance will be critical for India to achieve its renewable energy goals while ensuring equitable and sustainable land-use transformation.
As India advances toward its net-zero commitments, the renewable energy land policy framework must evolve to address scale requirements, technological developments, and social acceptance challenges. The foundation established through current legal frameworks provides a robust platform for this transformation, requiring adaptive management and stakeholder engagement to ensure successful implementation of India’s renewable energy vision.
References
[1] Ministry of New and Renewable Energy, Government of India. India’s Progress Towards Renewable Energy Targets 2024. Available at: https://mnre.gov.in/
[4] The Electricity Act, 2003, Section 86(1)(e).
[5] Mineral Area Development Authority v. Steel Authority of India Ltd., 2024 SCC OnLine SC 1796
[6] Supreme Court of India. Great Indian Bustard v. Union of India, Modified Order 2024
[7] Jawaharlal Nehru National Solar Mission Guidelines, 2010. Ministry of New and Renewable Energy
[9] Gujarat Solar Park Policy Amendment, 2020. Gujarat Energy Development Agency
