The Role of Government Policy in Accelerating Renewables in Asia

Meta Description: Government policy remains the key driver of Asia’s renewable energy growth. Learn how feed-in tariffs, auctions, and carbon goals shape the region’s transition. Introduction Asia’s renewable energy transformation would not exist without strong policy intervention. From China’s state-led planning to market-driven auctions in India and feed-in tariff schemes in Vietnam, governments are shaping how fast — and how sustainably — the region decarbonizes. In 2025, the balance between policy ambition and market design defines success across Asia’s diverse economies.

Feed-in Tariffs and Auctions: Two Paths to Growth

In the early 2010s, feed-in tariffs (FiTs) drove renewable investment in Asia, guaranteeing fixed purchase rates for developers. Vietnam’s FiT created a solar boom, adding 16 GW in under two years. Malaysia and Thailand followed similar programs with rapid rooftop adoption. Now, many countries are shifting to competitive auctions, which attract lower-cost bids while maintaining investor confidence. India’s solar and hybrid auctions are benchmark examples of price efficiency. Indonesia’s 2024 regulation introduced technology-neutral auctions to attract foreign capital.

Carbon Neutrality Commitments

Most major Asian nations have announced net-zero or carbon neutrality targets: China: 2060 Japan & South Korea: 2050 India: 2070 ASEAN (collective goal): Carbon-neutral power mix by 2050 These targets have triggered large-scale planning for renewable integration, storage, and electrification of transport.

Regional Cooperation and Grid Integration

Policies promoting cross-border power trade are expanding. The ASEAN Power Grid (APG) initiative aims to connect regional grids from Laos to Singapore. South Asia is exploring interconnections between India, Nepal, and Bangladesh. Such frameworks improve energy security and balance supply-demand gaps.

Incentives and Local Content Rules

Governments are also supporting local industries through tax incentives and domestic manufacturing requirements. India’s PLI Scheme subsidizes solar module production. Indonesia and Malaysia promote local assembly for job creation. Japan and South Korea prioritize R&D in hydrogen and offshore wind.

Policy Challenges Ahead

Despite progress, inconsistencies remain: Frequent regulatory changes deter investors. Slow permitting and grid access delays increase costs. Fossil fuel subsidies persist in parts of Asia, distorting market competition. Clearer roadmaps, digital permitting, and regional coordination are now the top policy priorities.

Key Takeaway

Government policy remains the cornerstone of Asia’s renewable acceleration. Consistent frameworks, transparent auctions, and cross-border collaboration are critical for achieving national targets while sustaining private investment.