By March 2012, the end of its fiscal year, India has committed to install 250 MW of photovoltaic systems—up from just 22 MW at the start of the year. As this growth is in keeping with India’s National Solar Mission, which aims to install 20 GW by 2022, the country's solar industry now seems set to take off.

Teething pains remain, however. “We are looking at capacity-building. Considering the technological content, we have to plan in a manner that is cost-effective,” said Anil Kakodkar, the newly appointed head of the National Solar Mission (NSM), at a January 2012 conference in Bangalore. An initial challenge, he said, was evaluating whether India’s large land surfaces and weather conditions would be suitable for solar installations. “I am afraid we have not fully understood this factor as yet,” he said.

In an auction, the Ministry of New and Renewable Energy has awarded photovoltaic contracts—largely in the desert state of Rajasthan—totaling 350 MW and worth $770 million to 28 developers. The project has an initial completion deadline of March 2013. Companies that signed the power purchase agreements included Azure Power India, Mahindra Solar One, French-Fonroche Energie and South Africa’s Solairedirect.

Rajasthan's strong transmission network is one reason why developers have an interest in the area. In a report, Bridge to India, a consultancy based in New Delhi, says that due to its high irradiation levels, Rajasthan is likely to become the "hub of solar power generation in India." 

In addition to the federally operated NSM, various states are independently promoting solar power. Rajasthan launched its solar policy with an aim to install 12 GW of solar by 2022.

The first phase will see 250 MW by 2013. Projects must be between 1 MW and 50 MW in size. The developer can choose any established and operational technology from India or abroad. Tamil Nadu has plans to create 10 so-called Solar Parks, each with a capacity of 300 MW, at a total cost of about $10 billion.

U.S companies are aggressively looking at India’s solar-power potential. India’s ACME, having partnered with Burbank, Calif.-based eSolar for solar-thermal projects, says it sees concentrated solar power playing an increasingly competitive role in the conventional power market. Its technology is scalable and uses tower-mounted boilers, or receivers, and flat mirrors, or heliostats, for concentrating solar energy and producing steam for generating electricity. 

Recently, Bangalore-based GMR Energy commissioned its first 25-MW solar powerplant, located in the west Indian state of Gujarat. Set up in a Solar Park and using crystalline photovoltaic technology, it is the first of several projects that will be synchronized with the grid. Electricity will be supplied on a 25-year power purchase agreement.

Meanwhile, Mumbai-based Mahindra Solar One commissioned its first 5-MW solar plant in Rajasthan, becoming the first to achieve non-recourse financing—a signal of the banking sector’s confidence in the solar industry.

Moser Baer Clean Energy Ltd., the project's developer, owner and operator, recently commissioned a 30-MW solar farm in Gujarat. “We see Gujarat as the best solar destination due to its progressive solar policies,” said Ratul Puri, Moser Baer chairman.