A 2,000-hectare (5,000-acre) solar village, which will be the first in Asia to produce 500 megawatts of power, was inaugurated in western India's Gujarat state on Thursday by Gujarat Chief Minister Narendra Modi.

"By harnessing solar energy to generate 500 MW power, we will be able to cut carbon emission by a whopping 8 million tons," he said.

At a cost of 120 billion rupees (2 billion euros), the Gujarat solar project will offer solar power manufacturing, assembly, as well as research and development-related facilities, Modi said. A training center has also been envisaged to train local people to work for corporations at the site.

The Indian government has committed to generating 20,000 megawatts of solar power by 2022. As part of this effort, the state of Gujarat intends to harvest 500 megawatts of electricity from its solar power park.

Solar success

While the goals are ambitious, they are not out of reach, according to Gon Chaudhuri, managing director of the West Bengal Green Energy Development Corporation.

Solar power projects have few downsides in India

"Any solar project will likely be successful in India, and Gujarat has very good solar radiation," he told Deutsche Welle. "A solar village in Europe gets about 1,000 kilowatt hours per square meter while in India it can be 1,700."

In fact, Gujarat's government has said the Charanka village, where the Gujarat park is located, receives an average of 330 sunny days a year, with an average intensity of six kilowatts per square meter, making it an ideal location for solar power generation.

Solar and other renewable energy projects in India are particularly environmentally friendly because they decrease the use of coal-based power plants, which account for nearly 62 percent of energy production, Chaudhuri said.

"A lot of the coal in India is of poor quality and releases a lot of greenhouse gases," he added. "In that sense, Indian solar energy programs, which have zero emissions, are very beneficial to the environment because they directly replace low-grade coal."

Economic benefits

In addition to the environmental benefits, the state government also said it hopes the village will result in 750 billion rupees (12.5 billion euros) of investment in Gujarat.

Most electricity in India comes from coal-fired power plants

The Gujarat Power Corporation (GPCL) has been appointed the central agency to establish, operate and maintain the park and 15 companies have already been provided with plots. The state government has also agreed to purchase 993 megawatts worth of power from the site to encourage development.

The Charanka village is leasing plots to companies on 30-year contracts and provides water, electricity, roads and power transmission services, according to a statement on the Gujarat government website.

As India's largest trade partner in Europe, German companies, which remain at the fore of solar power technology, are expected to participate in the Gujarat Solar Park's activities. It is unclear if German firms are among the 80 companies in private talks with GPCL.

The project's first phase is expected to go online by December 2011.

Author: Sean Sinico

Editor: Saroja Coelho