India is making a massive commitment to the solar industry and it may be poised to have the world's largest solar power plant with plans for a 750 MW project. India's "ultra mega solar power plants" are part of a 25 GW plant to make the country a solar powerhouse. For some perspective, that's enough solar energy to power the equivalent of 4.1 million U.S. homes, and about half of the solar expected to be installed in all of 2014, so the opportunity for the industry is massive.

Solar companies are clamoring to get into the booming market and SunEdison (OTC:SUNE.Q) has already signed a 5 GW memorandum of understanding to develop projects in the State of Rajasthan. What's interesting is that India is going against the trends of the rest of the world, who are building smaller projects closer to demand sources.

The history of large solar plants

Huge solar plants aren't new to the industry. Over the last decade, solar power plants have gotten bigger and bigger. This year, First Solar (NASDAQ:FSLR) completed the 550 MW Topaz Power Plant, which is now the biggest in the world. But that will soon be eclipsed by SunPower's (NASDAQ:SPWR) 579 MW Solar Star Project, which will be completed in 2015. You can see below how SunPower project sizes have increased over the years.

SunEdison hasn't built projects that big but its plans in India are for 500 MW plants, which would be among the largest in the world. But SunEdison, First Solar, and SunPower have all been trending toward smaller plants outside India rather than continue to push the envelope of on size. That's what makes India's plans so interesting.

Going against the grain

It looks as if a vast majority of the 25 GW India plans to install will be massive solar plants, something the industry is moving away from. The reason installers aren't building plants is simple. It's easier to interconnect a 10 -100 MW plant to the grid, site the project, and get regulatory approvals to begin construction. In the U.S., Europe, Japan, and elsewhere these can be major hurdles. From the utility side, it's easier to integrate multiple small projects across a wider geographic area than one large solar power plant that can be interrupted by a single cloud.

India has eased a lot of the installer obstacles because it's helping site projects and provide land for developers. What India may not have is a grid capable of handling massive, intermittent generation sources. The country is known for having an unreliable grid that doesn't even reach millions of its residents and without the proper infrastructure like energy storage and peaker plants, massive solar plants could exacerbate the problem. This will be the biggest challenge for the country's solar plans.

One of the solar industry's emerging markets

No matter how India's market plays out, solar developers and panel manufacturers will be clamoring to be involved in India's booming solar market. The opportunity is just too big to ignore.

SunEdison has already made a move with its 5 GW MoU and First Solar has set up an India subsidiary that's already active in local bidding for projects. This is a big opportunity, driven by the fact that solar energy is now competitive with the grid and another good sign of solar energy's future growth.