More than 200 million Indians are without electricity, and the majority lies in the rural areas, where the central grid fails to reach due to unreliable distribution and inconsistent terrain. The solutions that reach include majorly, decentralized energy resources via solar micro-grids, or solar home systems. New projects of energy sharing are coming up which allows a household to become a consumer, as well as a producer of energy in case of excess and sell it to make profit. But these projects fail within few years due to number of social, technical, cultural, political, and environmental dynamic factors playing role in the community. Thus, the research question is raised that “Given the dynamics of rural communities of India, how can socio-technical systems of solar electrification be sustained?" This project develops an institutional innovation framework that helps answer this question. The framework is conceptualized and operationalized to understand that how the institutions around these factors can be changed by the community and individual actions in such socio-technical innovations and infrastructure systems. The study follows empirical analysis and develops simulation model (agent based model) for the case study of rural solar electrification in India, which helps in developing the institutions. The case study and the framework together emphasizes the importance of the institutional innovation approach, where institutions need to be adapted and diffused within the community to make the sustenance of the project possible in various domains. The final results show that new type of projects, labelled as hybrid projects, would be most sustained. These would be sharing projects and would only use the existing micro grids, when there is higher demand. Also, it emphasizes on the need to look at institutions development, not just as a collective perspective which happens with interactions of actions, but also a perspective of majority or collection of actions. The policies generated at two levels of usage (prioritization of resource usage, constraints on resource usage, etc.), and for acceptance of innovations (co-operative shops, in-house manufacturing, etc.) prove to help the sustenance of these electrification systems further.

The energy markets are emerging slowly towards a more decentralized form, e.g. technologies are allowing prosumers to trade energy from their solar house rooftops. But as these markets are governed by people and depend on the behavior of people directly, they are susceptible to challenges from the social, economic and cultural norms around the people. One of the example is the cultural discrimination in energy trading noted by some researchers and practitioners in rural India, where people do not prefer to trade energy and goods with different castes, especially lower castes. This creates an unfair market for the poor and lower caste producers, and thus this thesis aimed at modeling such markets through agent based modeling, and introduce different automation mechanisms, namely local mediation, and bid splitting to prevent the effects of discrimination in energy trading. Local mediation allows introduction of a mediator who prevents from direct trade between people and thus prevents any discrimination, bringing in some sort of anonymity. The other mechanism of bid split allows splitting the bids by producer and consumer into small chunks, such that 2 producers in market with 1 and 100 units of energy to trade would look like 101 producers in market trading 101 units of energy. Evaluating the results of these mechanisms on increase of social welfare, efficiency, market access and reduction of inequality has shown that the bid split helps in reducing the discrimination, and so does the introduction of mediation (where the mediator does not discriminate). The former has much more significant effect on the market access, and the validation of the model has helped derive some policy recommendations for implementer in the energy industry and governance field e.g. on the load management for the devices.