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India is densely populated and has high solar insolation, an ideal combination for using solar power in India. India is already a leader in wind power generation. In the solar energy sector, some large projects have been proposed, and a 35,000 km area of the Thar Desert has been set aside for solar power projects, sufficient to generate 700 GW to 2,100 GW. In July 2009, India unveiled a US$19 billion plan to produce 20 GW of solar power by 2020. Under the plan, the use of solarpowered equipment and applications would be made compulsory in all government buildings, as well as hospitals and hotels. On November 18, 2009, it was reported that India was ready to launch its National Solar Mission under the National Action Plan on Climate Change, with plans to generate 1,000 MW of power by 2013.
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With about 300 clear, sunny days in a year, Indias theoretical solar power reception, on only its land area, is about 5 Petawatt-hours per year (PWh/yr) (i.e. 5 trillion kWh/yr or about 600 TW). The daily average solar energy incident over India varies from 4 to 7 kWh/m with about 15002000 sunshine hours per year (depending upon location), which is far more than current total energy consumption.

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The amount of solar energy produced in India is less than 1% of the total energy demand. The grid-interactive solar power as of December 2010 was merely 10 MW. Govern-ment funded olar energy in India only accounted for approximately 6.4 MWyr of power as of 2005. However, as of October 2009, India is currently ranked number one along with the United States in terms of solar energy production per watt installed.

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As of 2004 there are about 80,000 unelectrified villages in the country. Of these villages, 18,000 could not be electrified through extension of the conven-tional grid. A target for electrifying 5,000 such villages was set for the Tenth National Five Year Plan (2002 2007). As of 2004, more than 2,700 villages and hamlets had been electrified, mainly using solar photovoltaic systems.

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The government of India is promoting the use of solar energy through various strategies. In the latest budget for 2010/11, the government has announced an allocation of 10 billion (US$190 million)towards the Jawaharlal Nehru National Solar Mission and the establishment of a clean energy fund. It is an increase of 3.8 billion (US$72.2 million) from the previous budget. This new budget has also encouraged private solar companies by reducing customs duty on solar panels by 5% and exempting excise duty on solar photovoltaic panels. This is expected to reduce the cost of a roof-top solar panel installation by 1520%. The budget also proposed a coal tax of US$1 per metric ton on domestic and imported coal used for power generation.

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