Renewable energy is one of the fastest growing industry segment in the world. Global investments in this sector soared to $148 billion in 2007, according the United Nations Environment Programme report on global trends in sustainable energy investment. Its ability to create jobs in urban and remote rural areas is unparalelled. Billions of dollars worth of investments are lined up by governments and investors across the globe?including China and India.

China with its landmark Renewable Energy Law, endorsed in 2005, aims to boost its renewable energy capacity to 15% by 2020 and envisages investment of over $180 billion.

Large-scale investments in India by domestic and foreign investors will follow a comprehensive renewable energy law which is still in the making, industry sources said.

However, Indian renewable sector, as part of the energy sector in the country, is covered by several common policies and Acts.

According to GM Pillai, director general of the Pune-based World Institute of Sustainable Energy, there have been certain recent, major legislative and governmental initiatives in India, aimed at reforming the energy sector, like The Energy Conservation Act, 2001, The Electricity Act, 2003 and The National Electricity Policy, 2005.

All these have been welcome steps in the right direction. They have also started showing results. However, they have not been successful in adequately addressing a quiet transition under way in the energy sector, which is going to phenomenally transform the way we produce and consume energy in the next few decades?transition to a clean and green energy economy.

Deepak Gupta, secretary, ministry of new and renewable energy sources, said in Chennai that the ministry has appointed a consultant to draft a ?renewable energy law?. It may be ready in six months. However, the journey of the draft to a law with ratification of the parliament would be cumbersome and time-consuming.

Captains of the industry do hope that the much-awaited law would be a mixture of several successful laws that have transformed the renewable industry scene in Europe, the US and China.

The pivotal point in any renewable law is the ultimate return the investor and power producer can get. Love for nature, nation?s energy security, fighting factors that cause climate change and other universal benefits melt down to the prime factor of profit and return on investment.

Germany?s law that mandates utilites to buy power from renewable sources and the introduction of feed-in tariff rate since 2000 has made it the world leader in power generation from renewable sources. The necessity of the utilities to buy power produced from renewable sources make them look for such power. Anybody with facilities to produce power from wind turbines, rooftop solar generator or small hydro stations can sell the power.

The price for the power on sale is determined by what is called ?feed-in tariff rate? fixed by law under a feed-in tariff rate scheme. It is the payment to the owner of a qualifying generator for all the electricity produced by that generator,not just for the electricity exported to the grid.

The scheme has helped to create a network of small renewable energy producers. Reports from Germany say that at least a dozen communties produce almost all the elecricity they need by using everything from solar cells, wind turbines to cowdung. More than half the world?s solar power generation capacity is operting on the roof tops of German homes, despite the country?s cloudy climate. The net result has been marvellous. By the end of 2007, renewable energy has grown to 14% from 6% of the total elelctricity market. Investments in green technology last year exceeded $14 billion.

Following Germany?s lead, dozens of countries all over the world have adopted similar policy modified to suit local needs.

Even amid the financial turbulance, both chambers of the US Congress apporved a Bill recently to extend the renewable enrgy production tax credit (PTC) to the end of 2008. PTC?a vital component of financing utility-scale wind energy projects?had been effective from 1994 and extended several times since then. Wind industry hopes to get further concessions from the new government in 2009.

The US Senate has approved another package which provides for the creation of an eight-year investment tax credit (ITC) for residential-scale small wind turbines. The US wind energy industry installed 5,244 mw of power in 2007, expanding the nation?s total wind power generating capacity by 45% in a single calendar year and injecting an investment of over $9 billion into the economy, according to the American Wind Energy Association. The new wind projects account for about 30% of the entire new power-producing capacity added nationally in 2007 and will power the equivalent of 1.5 million American households annually.

China had its renewable energy law endorsed in 2005 and made effective from 2006. The country has two forms of renewable pricing: a government-fixed price and a government-guided price. For example, for power from biomass or plant materials, bio-power, the government will set the price based on the provincial or local on-grid price of desulphurised coal and in addition a subsidy of 0.25 yuam (about $0.03) per unit. It will be available only for 15 years and projects approved after 2010, the subsidy provided for a unit will decrease at an annual rate of 2%.

For biomass and wind power projects, selected through competitive bidding, the bid-winning price will be accepted if it doesn?t exceed local price of grid-connected power. The price of solar, marine and geothermal power projects will be determined on an economic basis.

In the proposed Indian law, the focus would be on actual generation of power rather than capacity installtion, which had given room for gross misappropriation in the early years of renewable energy generation in the 1990s.