Solar Power In India
Solar Panels Sreeja VN/IB Times

The Indian government will set up the world’s largest solar power plant in its northwestern state of Rajasthan, an official statement said on Friday, and the venture is expected to significantly reduce solar power taxes in the country.

The project, known as the "Ultra-Mega Green Solar Power Project," will have a total power generation capacity of 4,000 megawatts, which is more than double the total solar power generation capacity in India.

“This will be the largest solar-based power project in the world. Being the first project of this scale … this project is expected to set a trend for large-scale solar power development in the world," a government statement said.

The project will be spread across 23,000 acres of land belonging to the state-run Sambhar Salts Ltd, near the Sambhar Lake, which is about 47 miles away from Jaipur, Rajasthan’s capital city. The first phase of the project, which will be for 1,000 megawatt capacity, is expected to be completed in three years and will be run by a joint venture of five state-run utilities, including BHEL, Power Grid Corporation of India and Solar Energy Corporation of India.

"Based on the experience gained during implementation of the first phase of the project, the remaining capacity would be implemented through a variety of models," the statement said.

The plant, when fully operational, will generate 6,000 million units of electricity a year, and it is expected to bring down the solar power tariffs in the country.

India, which is facing a severe power shortage, has been promoting solar and wind energy to meet its increasing energy needs. Solar power currently contributes less than 1 percent to India’s energy mix, which is heavily dependent on coal and hydro power plants. However, the government aims to increase the current capacity of 1,700 megawatts of solar power to 20,000 megawatts of solar energy by 2020, through its ambitious project, the national solar mission.

The government is hoping to sell solar power from the proposed plant at 5.50 rupees (about 9 cents) a unit, which would be the lowest tariff for solar power in the country.

"Solar power at the rate of Rs 5.50 per unit would surely bring in buyers. Prior discussion with the government, distribution companies and the ministry of finance have yielded that solar power at this rate is most viable for finance and purchase," Amit Kumar, Associate Director (energy & utilities) at PwC told the Economic Times.