Currently, there are no policy incentives for solar PV refurbishers and recyclers to organize themselves into self-sustaining businesses that can monetise on solar waste.

India’s rapid solar transition: How to ensure justice and sustainability for all

While India is still under-prepared to handle this crisis of justice in its solar transition journey, policy reforms could help salvage our green transition.

The Indian government, in its recent interim Budget 2024, under the Pradhan Mantri Suryodaya Yojana, has promised assistance to install rooftop solar systems to one crore poor and middle-class households.

This, the government claims, will enable each household to obtain up to 300 units of free electricity per month, leading to a cost savings of ₹15,000-₹18,000 rupees annually, and will also provide them an opportunity to be a “prosumer”—a portmanteau word for someone who is both a producer and a consumer—of electricity, as they can sell excess power to DISCOMs if they want to. 

Apart from this distributed solar prosumption scheme, the Centre has also given renewed push to the existing “Development of Solar Parks and Ultra Mega Solar Power Projects” scheme, by recently approving 50 new mega solar parks across 12 states with a total installed capacity of 37,490 MW. 

India’s solar ambition is being fueled by its myriad other initiatives, like the Production Linked Incentive (PLI) scheme to boost domestic manufacture of solar PV modules, PM-KUSUM scheme that aims to harness decentralized solar energy production to meet agricultural irrigation needs, and the International Solar Alliance, which it spearheads.  

Whereas this policy push towards increasing the share of solar energy in our renewable energy mix contributes to reducing our carbon emissions, the country’s solar policies have failed to meet the standards of “energy justice” in this green transition process. “Energy justice”, as has been conceptualized by Professor Raphael J. Heffron – one of the leading scholars in the eponymous field – is “the application of human rights across the energy life-cycle, …from extraction, to production, to operations and supply, to consumption, to waste management, including decommissioning”.  

This expansive understanding of justice in energy transitions prompts some questions about India’s quest to become a solar power—do the country’s solar policies make provisions to protect worker rights across the entire solar value chain—right from production of PV modules, to workers who might be involved in their transport and installment? Have our solar policies envisaged the creation of decentralised infrastructure to safely handle solar e-waste that would be generated, given the impending increase in demand for PV modules?

Research shows that while India is under-prepared to handle this crisis of justice in its solar transition journey, policy reforms could help salvage our green transition.

Protecting workers’ rights across the solar value chain

It is well known that, currently, the world is dependent on China for its solar PV modules. It is also well-known that China has been accused of human rights violations in its solar value chain—especially of persecuting the Uyghur Muslim workers employed in the module manufacturing factories of the Xinjiang region. This import dependence of India on China—for the short to medium term—is a threat to our democratic ideals of protecting human rights of all, and especially the rights of workers. 

In order to reduce these structural dependencies on China, even though India has come up with a slew of favourable policy measures—like, the PLI scheme for increasing domestic manufacture of solar PV modules, and imposing Customs duty on Chinese imports to protect the fledgling domestic manufacturing capabilities—we still have a long way to go in terms of creating a worker-centric domestic solar value chain, that doesn’t reproduce the Chinese human rights excesses. 

Hence, a welcome addition to our solar policy mix, could be what’s known as the “Human Rights and Environmental Due Diligence”—a sustainability governance tool that holds promise in centering human well-being in transition processes. What is this Human Rights and Environmental Due Diligence/HREDD? And, how can it be implemented in a country like India, where most of our economy is informal? The next section answers these questions. 

Human Rights and Environmental Due Diligence (HREDD): A step towards solar energy justice

The term “due diligence” is widely used in the fields of business and accounting, and refers to the practice of conducting detailed investigation and/or audit of financial records of firms, before entering into agreements with them. This auditing process is done to not only detect financial irregularities, but more importantly, to prevent future financial losses to the transacting firms’ accounts. 

The concept of Human Rights Due Diligence (HREDD) refers to conducting such audits by firms across their value chains—with their vendors and suppliers—to detect human rights and environmental irregularities in their production processes. Thus, if implemented in the Indian solar value chain, HREDD can act as a governance tool to identify, prevent, mitigate, and account for human rights and environmental impacts of business activities—both present and future—across the solar value chains that include supply chain workers, communities, employees, and consumers. 

Several European nations, like France, the Netherlands, Germany, Norway and Switzerland have recently introduced mandatory HREDD legislations, which create compliance mandates on all businesses (with national-level variations in scope of application based on the number of employees and the annual turnover of the business) incorporated in their respective jurisdictions in terms of setting up risk management systems, and to conduct periodic risk assessments to avoid punitive action. Corporate support to HREDD legislations in Europe has been uneven, as has been highlighted in this study. The study shows that many businesses value the legal certainty and level playing field that such legislations provide them, but there are also businesses that see these compliances as tick-in-the-box regulatory requirements, and conduct audits in select areas only and/or only in limited parts of their value chain. 

Nevertheless, as Surya Deva, the eminent scholar of Business and Human Rights argues in his paper, HREDD is a policy tool to institutionalise the process to identify business-related human rights abuses, and does not automatically guarantee an outcome of respecting everyone’s human rights across business value chains. HREDD legislations, therefore, should be seen as the first step towards formulating human-centric policies, and especially so in the context of enabling just energy transitions.

The case for mandating HREDD in the Indian solar sector is strong, as, firstly, instances of caste and gender discrimination in solar jobs, and empirical evidence that point to reproduction of structural inequalities that are further marginalising vulnerable communities have been documented. Holding the market accountable to protect human rights via this governance tool, instead of solely relying on top-down state-led policy action on worker welfare would not only signal our policy commitment towards ensuring energy justice for all the solar stakeholders, but would also mark our first step in facilitating an energy transition that is also just. 

Secondly, mandating HREDD for solar supply chains can serve as an effective sector-specific just transition policy that builds on the “minimum labour standards” set in our new labour codes. The four new labour codes, that are yet to be implemented, have set a uniform national floor wage, have extended social security benefits to unorganized, platform, and gig workers, and have universalised occupational health and safety standards across all commercial establishments. They also hold the principal employer accountable to provide welfare measures for contract workers—which are all progressive measures in ensuring protection of worker rights. 

Mandatory HREDD (mHREDD) for the solar sector would help strengthen this new pro-labour policy regime, as it facilitates business stewardship in taking preventive steps, taking corrective action, and publicly communicating actions taken by businesses to ensure that the green transition is not only sustainable, but also just. This combination of market and state action can provide a renewed impetus to our just transition journey, in terms of building trust and legitimacy among the public towards the government and businesses. 

Thirdly, implementing HREDD in India will help us realise the just transition goals set by the International Labour Organization in its 2015 “Guidelines for a just transition towards environmentally sustainable economies and societies for all” As per these policy guidelines, apart from designing apt macroeconomic and sectoral policies, domestic climate transition policies should ensure equal access to opportunities for skills acquisition and recognition for all, integrate occupational safety and health policies to protect workers’ interests across product life cycles, ensure that workers have access to adequate social protection in the transition process, and should enable protection of worker rights such as—non-discrimination, freedom of association, and right to organize and collective bargaining. These policy prescriptions, as can be seen, nudge national governments to ensure that social justice principles are embodied within the transition policies.  

Hence, mandating HREDD in the Indian solar supply chain can usher in a new era of just solar energy transition in India. But how can this be done, given that the Indian solar market is highly fragmented?

Our solar energy sector consists of players across ten categories—utility-scale solar, engineering, procurement, and construction (EPC) services, rooftop solar, solar inverters, modules, trackers, and mounting structures, open access solar, and solar robotic cleaning—of which utility solar accounts for over 76% of overall installations, and the top five large-scale project developers (Avaada Energy, NTPC Renewable Energy, Adani Green Energy, Tata Power Renewables, and Azure Power) collectively account for around 52% of the market share. 

Given this data, the HREDD policy for the Indian solar sector can target these top players to begin with, and can then be extended phase-wise to other categories and players with suitable amendments, based on the results of this policy implementation.

Tackling the solar e-waste problem: Need for a circular economy

Whereas our solar value chain can be nudged towards social sustainability by formulating HREDD policy as described above, we also need reforms in solar e-waste management policies, as our current regulations have not created a facilitative environment for safe handling, recycling, and refurbishing of solar waste that is going to be generated due to the mass uptake of solar energy. It is well-known that an average solar panel, at the end of its life, has hazardous e-wastes (in the form of heavy metals like lead and cadmium), which requires safe handling, preferably by trained professionals.

The recently introduced E-waste (Management) Rules, 2022, bring solar waste under its ambit, and authorise the Central Pollution Control Board to lay down guidelines to manage e-waste, including waste from solar PV modules, panels and cells. But these rules have not created provisions to facilitate a circular economy for the Indian solar sector. 

The rules in their current form, put the financial burden of solar e-waste recycling on the for-profit businesses, without creating an ecosystem to formally establish a solar e-waste industry in our country. There are no policy incentives for solar PV refurbishers and recyclers to organize themselves into self-sustaining businesses that can monetise on solar waste. Given this policy lacuna, why would for-profit solar PV manufacturers invest in technological and logistical infrastructures and/or partner with recyclers and refurbishers, when they could save costs by relying on the existing informal waste management ecosystem? Given this, wouldn’t our current solar transition policies further marginalise the informal waste pickers, putting them at health risks due to exposure to harmful solar e-wastes?

Secondly, given the multiplicity of solar companies (including refurbishers, recyclers, and manufacturers) that will crop up to meet the increased demand for solar energy, how will the government ensure that all companies set up seamless end-to-end waste management logistics that do not lead to leakages during transport and installations? What about regulating the informal repair economy that could crop up on the sidelines?

Thirdly, what about the lack of control over citizen behaviours in terms of safe usage, refurbishing, and recycling of solar waste? Our current solar transition policies have left these regulatory bottlenecks unanswered.  

To address these questions, I suggest the following three policy reforms: firstly, the government could incentivise the creation of a formal solar waste economy, so that reliance on the precarity of informal workers is eliminated, and waste management operations are standardised among manufacturers, refurbishers, and recyclers. This way, solar waste can not only be monetised, but can also contribute to our economic development.

The government can also build public-funded solar waste recycling facilities, so that uniformity in the quality of recycling technology can be maintained, and the financial burden of waste management can be shared between the state and the market. Creating this kind of a state-sponsored pro-environmental infrastructure, especially in the initial phases of formalising our solar waste economy, will help give a push to safe solar waste management practices among all the stakeholders. 

Also, the government can run awareness campaigns to encourage citizens to practice safe disposal and recycling practices. It can subsidize solar waste recyclers and refurbishers to provide attractive rebates and rate reductions to consumers, to help create safe waste management habits among the consumers.

The way forward

The current solar transition policies fall seriously short of facilitating a circular economy value chain for the solar PV modules and their components, both in the industrial and domestic sectors, which may lead to adverse environmental, public health, and social harms. By inculcating the core tenets of energy justice principles within the HREDD policy framework, and by incentivising businesses for responsible waste management practices as laid out above, we can ensure that our solar transition policies are designed to be inclusive—especially of workers, waste pickers, and those most vulnerable to environmental and social harms. Where the national discourse on “just transition” is predominantly around coal transition, it’s high time that the need for a just solar transition is acknowledged in our policy discourses.  

The views expressed in the article are solely the author’s and do not reflect the opinions and beliefs of CarbonCopy.