U.S. Exit from International Solar Alliance: Implications for Global Solar Energy and Climate Diplomacy

Source: The Hindu

Introduction 

Recently, the U.S. government announced its withdrawal from 66 international organizations, citing that these bodies no longer served American interests. Among them was the International Solar Alliance (ISA), headquartered in India and jointly led by India and France. Established in 2015, the ISA has become a critical platform for climate finance. While U.S. contributions represented only 1% of the Alliance's funds, the withdrawal raises questions about global climate cooperation.

Timeline of Events

• November 2015: ISA launched at Paris COP21 by India and France. 
• 2021: United States joins the ISA. 
• 2021-2024: U.S. contributes approximately $2.1 million to ISA. 
• Late 2025: India's solar capacity reaches 144 GW modules, 25 GW cells. 
• October 8, 2025: President Murmu addresses Eighth ISA Assembly in New Delhi. 
• January 2026: U.S. announces withdrawal from ISA and 65 other organizations.

What is the International Solar Alliance?

About: 

• The ISA was established in 2015 to make solar power cheaper and easier to adopt, especially in developing countries.  
• While it doesn't build solar plants directly, it helps countries access finance, reduce risk for investors, and speed up solar adoption.  
• Today, the Alliance has over 120 member countries across Africa, Asia, and island nations. The U.S. joined in 2021 and contributed around $2.1 million over three years.

Legal Framework and Provisions: 

Framework Agreement of ISA (2015): 

• Article 2 - Objectives: Reduce cost of finance and technology for solar deployment, facilitate collaborative R&D, and promote solar technologies. 
• Article 4 - Membership: Amended in 2018 to allow all UN member states to join, enabling U.S. participation. 
• Article 8 - Withdrawal: Any member may withdraw by written notification. Withdrawal takes effect one year after receipt. 
• Article 10 - Financial Contributions: Contributions are voluntary and not legally binding, explaining minimal financial impact of U.S. withdrawal.

India's Domestic Legal Framework: 

• National Solar Mission (2010): Targets 100 GW solar capacity by 2022, extended to 500 GW renewable energy by 2030. 
• Electricity Act, 2003: Section 86(1)(e) mandates renewable energy purchase obligations, creating guaranteed demand. 
• Energy Conservation Act, 2001 (Amended 2022): Enables Carbon Credit Trading Scheme and mandates energy efficiency standards.

International Climate Commitments: 

• Paris Agreement (2015): India committed to 40% electricity from non-fossil fuels by 2030 and reducing emissions intensity by 33-35%. 
• Glasgow Climate Pact (2021): India announced net-zero by 2070 and 50% energy from renewable sources by 2030.

How Will U.S. Exit Affect the ISA?

Financial Impact:  

• The U.S. exit will not substantially harm the alliance financially. U.S. contributions made up only 1% of total funds. Indian officials confirmed ongoing programmes will continue. However, reduced major economy participation may influence investor sentiment in developing markets.

Impact on India's Solar Industry:  

• India does not depend on the U.S. for solar equipment. As of late 2025, India's solar module capacity reached 144 gigawatts, with cell manufacturing at 25 gigawatts. China produces 70% of global solar cells; India imported $1.7 billion of PV modules from China in FY25 (MNRE data). U.S. withdrawal does not affect Indian project costs or electricity tariffs. 

Conclusion   

• The U.S. withdrawal from the ISA represents a shift in American climate policy but does not fundamentally alter the ISA's trajectory or India's solar sector. The financial impact is minimal, domestic projects remain secure, and India's manufacturing capacity continues growing. 
• However, broader implications lie in climate diplomacy. The ISA's work in Africa and developing regions may face challenges as a major economy steps back. For India, this presents both challenges and opportunities—greater ISA leadership responsibility, potential market openings for manufacturers, and a more prominent role in Global South climate leadership.