India approves $922m for solar plan in bid to boost PV capacity

India's is going ahead with an ambitious US$20bn solar mission aimed at increasing the nation's installed solar capacity to 20GW by 2022 – a move intended to strengthen its position at next month's UN climate change talks in Copenhagen.

Approved last week by the country's cabinet, the plan is expected to dramatically increase solar energy production from 6MW currently to 200MW by 2012, rising to 20GW by 2020, and 100GW by 2030.

An earlier draft of the plan called for 200GW of capacity by 2050, although officials last week avoided mentioning the target, raising suspicions that the government may have had difficulties agreeing a date for it to hit the 200GW goal.

The cabinet sanctioned 43 billion rupees ($922m/£555m) for the initial phase of the scheme, with the total cost expected to reach around $20bn.

The money will be used to provide incentive schemes for the production and installation of solar systems, while offering tax breaks and financial incentives to utilities that purchase the clean power. Funds will also be allotted for solar research and development projects.

Further details of the scheme are expected to be announced in the next few weeks. It is widely expected that India will ask developed nations to help fund the plan, as officials have previously spelled out a need for foreign expertise and capital in order to roll out large-scale clean energy projects.

The solar mission is expected to provide a windfall for domestic solar-equipment manufacturers such as Moser Baer Photo Voltaic. It parent, optical media company Moser Baer India, earlier this month said it planned to spend US$5bn over the next decade to expand its manufacturing capacity for photovoltaic cells ahead of increased demand.

The cabinet's move comes weeks before the world's nations meet in the Danish capital to negotiate an international climate treaty. In Copenhagen, India is expected reiterate its stance that renewable power schemes, such as its solar mission, represent a more efficient means for developing countries to meet climate change goals than setting binding CO2 reduction goals.