India’s ambitious renewable energy targets have placed solar power at the center of the country’s energy transition. Public Sector Undertakings (PSUs), traditionally dominant in conventional power and infrastructure, are now playing a growing role in scaling up solar capacity. However, one of the most persistent challenges they face is land acquisition. Complex ownership patterns, high land costs, regulatory delays, and local resistance have often slowed project execution. In response, PSUs are increasingly turning to joint ventures (JVs) with state governments and their agencies as a strategic solution to overcome land-related hurdles and accelerate solar deployment.
Land acquisition has long been a bottleneck for large-scale solar projects. Utility-scale solar parks require vast, contiguous tracts of land with clear titles and minimal litigation risk. In many states, identifying such land is difficult due to fragmented holdings, competing agricultural uses, forest clearances, and lengthy approval processes. For PSUs, which are subject to stringent audit and compliance norms, these risks are particularly acute. Delays not only inflate project costs but also threaten the viability of projects tied to time-bound power purchase agreements and national renewable targets.
Joint ventures with state governments offer a pragmatic workaround to these constraints. States typically have better visibility over local land records, greater administrative control, and established mechanisms to aggregate and allot land. By partnering with state renewable energy development corporations or other state-owned entities, PSUs can access pre-approved land parcels, often within designated solar parks or renewable energy zones. This significantly reduces uncertainty, shortens gestation periods, and shields central PSUs from local-level political and legal complications.
These JV structures also align incentives between the Centre and the states. For states, partnering with financially strong PSUs brings access to capital, technical expertise, and execution capability. It helps them meet their renewable purchase obligations, attract investment, and generate local employment without bearing the full financial risk. For PSUs, state participation lends projects local legitimacy and administrative support, smoothing approvals related to land conversion, grid connectivity, and local infrastructure. Revenue and risk-sharing arrangements further improve project bankability.
Another advantage of PSU,state joint ventures lies in scale and coordination. Many states are developing large solar parks where land acquisition and basic infrastructure,such as roads and transmission,are handled upfront by state agencies. PSUs entering through JVs can quickly roll out projects at scale, benefiting from economies of scale and standardized processes. This model is particularly effective for meeting national targets for solar capacity addition within tight timelines.
However, this approach is not without challenges. Joint ventures can add layers of governance and decision-making, sometimes slowing execution if roles and responsibilities are not clearly defined. Differences in priorities between central PSUs and state entities, political changes at the state level, and bureaucratic coordination issues can affect project outcomes. Ensuring transparent governance structures, clear exit clauses, and professional management is therefore critical for the long-term success of these partnerships.
In conclusion, the shift by PSUs towards joint ventures with state governments reflects a strategic adaptation to on-ground realities in India’s solar sector. By leveraging state control over land and local administration, PSUs are finding effective ways to overcome one of the biggest barriers to solar expansion. While not a panacea, this collaborative model has emerged as a practical and scalable solution to accelerate renewable energy deployment, strengthen Centre,state cooperation, and move India closer to its clean energy goals.