Solar Compass 2 (2022) 100023 Contents lists available at ScienceDirect Solar Compass journal homepage: www.elsevier.com/locate/solcom Enabling policy and regulatory environment for solar power development: Lessons in Asia-Pacific region Dan Millison, Len George, Jiwan Acharya, Priyantha Wijayatunga Asian Development Bank, Manila, Philippines a r t i c l e i n f o Keywords: Solar parks Policy and regulatory environment Value addition Solar manufacturing a b s t r a c t Solar energy democratizes energy access. It also has helped address price volatility that is typically associated with the use of imported fossil fuels and has received prominence particularly during crisis periods including oil price shocks. Countries such as Sri Lanka and Bangladesh took the lead to scale up the use of solar home systems in the 90’s providing income generation and social development in rural areas. A new cycle of solar development has taken place over the last 15 years propelled by the use of enabling policy and regulatory instruments, ramping up of solar manufacturing capacity in People’s Republic of China, the scaling up of clean projects through models such as solar parks that took off in India and replicated in other Asian countries including Cambodia. The declining cost of solar power coupled with the mobilization of long tenor concessional public financing (including multilateral support) has helped address key risks and crowd in private capital to the sector. Over time, there is a focus on energy storage for better utilization of solar power as well as offer value added services including for heat and water production, transport sector decarbonization and now green hydrogen. This expands the use case for solar power permitting it to play a more prominent role in meeting energy requirements in the region and particularly in the context of NDC commitments. Policy and regulatory instruments would also need to evolve to help meet these newer and more ambitious deployment plans. 1. Introduction National energy policies are shaped by both internal and external factors. This paper takes a historical view of solar development in Asia and the Pacific, highlighting the external factors that have been driving the global market and the internal policy responses for domestic energy needs. Direct use of Solar energy is attractive because it is available ev- erywhere on earth, and therefore offers potential for democratization of energy services. At the same time, solar (and other renewable resources) offer the prospect of eliminating the price volatility associated with fos- sil fuel markets. Eliminating fossil fuel price volatility is one thing but eliminating fossil fuel use altogether is a more daunting challenge, but necessary to address global climate change and biodiversity crises. Solar photovoltaic systems which convert photons to electrons were demonstrated in the late 19th century and later applied for power on spacecraft. The oil price shocks of 1973–74 and 1979–80 fostered in- terest in solar for a while but by the early 1980s solar was relegated to “side show” status in most countries. Notable exceptions are Sri Lanka and Bangladesh, which pioneered deployment of solar home systems (SHS) with microfinance beginning 1997. In Sri Lanka, under two World Bank projects, the initial target of 15,000 systems was surpassed with 21,000 systems by 2002 and 106,000 systems by 2009. The socioeconomic impacts ranging from technical capacity development to increasing income generating and children’s education opportunities in the rural communities under these interventions were significant [1]. Bangladesh started the program in 2003 with an initial target for 50,000 systems ranging from 20 to 120 Watts to be installed over 5 years. This quickly scaled up to 50,000 sys- tems per month, and by 2014 > 3 million systems had been installed. During this period, per capita incomes rose by 9–12% and per capita expenditures by 4–5%, which is partly attributable to the solar pro- gram. More than 17,000 technicians have been trained for installation and maintenance [2]. Bangladesh continues to focus on bottom-of-the- pyramid consumers with its solar irrigation program. The experiences in Bangladesh and Sri Lanka are transferable but have not been widely replicated across the Asia-Pacific region. This lack of replication is due partly to consumer preference for grid-connected electricity, which is reinforced by a general policy preference for cen- tralized grid expansion by existing electric power utilities (which is per- ceived as a more efficient use of public sector funds). When distribution grids reach new customers, the solar home systems may be abandoned leading to asset stranding and credit defaults. After the commodity and energy cycle of 2007–08, when crude oil prices peaked around $150 per barrel, some countries started to get se- rious about solar power. Policy support for solar energy evolved rapidly after 2008. Feed-in tariffs (FiTs) were already common by 2008, and many countries coupled FiTs with net metering for rooftop solar devel- opment. In the late 2000s, three countries played very important roles in accelerating solar energy deployment: (i) Germany implemented a https://doi.org/10.1016/j.solcom.2022.100023 Received 3 June 2022; Received in revised form 9 August 2022; Accepted 9 August 2022 2772-9400/© 2022 The Author(s). Published by Elsevier Ltd on behalf of International Solar Alliance. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)