Though still in the draft stages, a new Indian energy policy is setting the goal of 20GW of solar power by 2020 to help the subcontinent close the gap between itself and countries like China, according to Reuters.

The 30-year plan is estimated to cost about US$9 billion but would give India more clout in the climate talks in December that follow up on the first phase of the Kyoto Protocol. There is no definite date for the plan's release, though most sources expect a time in September. An official commented that "the draft should not change much and the target of 20GW will be there."

The plan, entitled the National Solar Mission, aims to "ensure large-scale deployment of solar generated power for both grid connected as well as distributed and decentralized off-grid provision of commercial energy services." Money would be spent on incentives for production and installation as well as research and development, and the plan offers financial incentives and tax holidays for utilities. If implemented, the three-phase plan would start off phase one with 1-1.5GW of solar power by 2012. The move could unlock India's huge renewables potential and benefit domestic companies, as was the case when China introduced subsidies.

The National Solar Mission would prevent 42 million tons of carbon dioxide emissions and provide solar-powered lighting for 3 million households by 2012. Solar-powered equipment and applications would be mandatory for hospitals, hotels and government buildings, while states would be required to buy a portion of energy generated from renewable sources and encourage use of solar lighting systems in villages and small towns with micro financing. The plan also outlines a system of paying households for any surplus power from solar panels fed back into the grid.

Many observers regard India's long-neglected power sector as the greatest infrastructure investment opportunity in a country where nearly 56% of the 1.1-billion plus population do not have access to electricity. In spite of its pledge to clean technology, coal remains the backbone of India's power sector--accounting for about 60% of generation--with the government planning to add 78.7GW of power generation during the five years ending March 2012. Of this, 15.1GW has been commissioned. In comparison, China's power generation capacity rose to 792.5GW in 2008, more than five times India's capacity.

Experts say the voluntary domestic action will add to India's bargaining power in international negotiations, although India's refusal to commit to any binding emission targets has angered many rich countries demanding greater commitment. "Such unilateral action will give India the moral high-ground because the rich countries have not committed to anything (in terms of finance and technology)," said Siddharth Pathak, Greenpeace India's chief climate campaigner.