Prime Minister Narendra Modi has ramped up his target for solar energy as he bets on renewable to help meet rising power demand and overcome the frequent outages that plague Asia's third largest economy. India gets twice the amount of sunshine as compared to European countries that use solar power. But the clean energy source contributes less than 1 percent to India's energy mix, while its dependence on erratic coal supplies causes chronic power cuts that idle industry and hurt growth.
Modi now wants companies from China, Japan, Germany and the United States to lead investments of $100 billion over seven years to boost India's solar energy capacity by 33 times to 100,000 megawatts (MW), said Upendra Tripathy, the top official in the Ministry of New and Renewable Energy.
That would rise solar's share of India's total energy mix to more than 10 percent. In Germany, a leader in renewable energy, solar accounted for about 6 percent of total power generated in 2014.India had earlier set an investment target of $100 billion for the next five years for all types of renewable energy, with the wind taking up two-thirds of the total. In an interview, Tripathy said Modi's new solar target was ambitious, "but if you do not have a higher goal, you will not achieve anything".
Canadian Solar (CSIQ.O) and China's JA Solar (JASO.O) told Reuters they are looking at making cells or modules - used in solar panels - in India. JinkoSolar Holdings (JKS.N) said recent announcements have also raised their interest.
U.S.-based First Solar (FSLR.O) and SunEdison Inc (SUNE.N) have sizeable businesses in India, and together with local firms will invest $6 billion in India for the fiscal year to March 31. Tripathy expects new and existing companies to invest about $14 billion annually starting next fiscal year through to 2022.
Among First Solar top projects are two plants with Kiran Energy Solar Power and Mahindra Solar One totaling 50 MW in Rajasthan. SunEdison is working on a 39 MW project in India and hopes to participate in the solar expansion plan, said regional managing director Pashupathy Gopalan.