India to unveil 20,000 MW solar power plan

“The amount which we are going to talk about is huge. I can only say that much," Farooq Abdullah, told reporters, adding that Prime Minister Manmohan Singh plans to announce its new policy next week.

The policy framework, known in official circles as “the National Solar Mission," will address the high cost of manufacturing solar panels as well as the high price of solar power, Abdullah said.

A rough rule of thumb is that one megawatt of coal generating capacity costs about $1 million to build, while solar capacity costs roughly double that.

“Our job is to bring the costs down. Whether we are going to give concession on import duties, whether we are going to give a sizeable subsidy to purchase solar power, all will be outlined in the mission," he said.

India struggles with a severe shortage of electricity, with peak power falling about 12% below demand. Rolling blackouts are common and businesses rely heavily on backup generators.

The country has set a target to build 78,700 megawatts of new power capacity in the five years ending in 2012, but top officials have said India will fall short of that target.

Abdullah said 85 percent of the solar panels currently made in India are exported.

“We are unable to use them in the country as prices are high," he added.

Indian firms including Moser Baer, XL Telecom & Energy, Bharat Heavy Electricals, KSK Energy Ventures already make solar panels or have plans to do so.

Abdullah also told reporteRs that the William J. Clinton Foundation is talking to the Indian states of Gujarat and Rajasthan to set up 3,000 MW solar power units in each.

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