India to auction solar power licenses

License to build solar power plants resumes after two years.

India this month could announce an auction of licenses to build the solar-power plants with a combined capacity of 750 MW. It is also expected to provide US$48 million in direct grants for this project for the first time. The Ministry of New and Renewable Energy is awaiting Cabinet approval for the auction, which may be announced within the next two weeks.

Cabinet approval is expected very soon. The ministry is seeking approval to disburse the grant, which will cover as much as 30% of project costs. Previously, the government supported the solar industry by buying power at above-market rates.

The government is offering 25 million rupees per megawatt to projects that will range in capacity from 10 MW to 50 MW, according to auction guidelines. Developers will submit bids specifying the amount of funds they require, and those needing the least will win.