This essay makes a case for embedding the analysis of institutions for technological change in an understanding of the politics of markets. In turn, this needs knowledge of institutions and of their relations. The first stage that is needed to explain the retarded development of apparently appropriate solar energy technology in India is developed; and the implications for technology theory, analysis and policy are outlined. India's technology system was created precociously early to facilitate research and development. Technology is available. It is not obstructed by intellectual property rights so much as by the structure of domestic energy subsidies and support measures, the risk aversion of banks and the coordination failures of the system of market- and state-institutions for renewable energy technology. As a result, the state is seriously hampered from acting in the long-term public interest. In general, policy reform may require institutional destruction as well as creation, adaptation and persistence.
