Vikas Bajaj
New York Times News Service

KHADODA, India – Solar power is a clean energy source. But in this arid part of northwest India it can also be a dusty one.

Every five days or so, in a marriage of low and high tech, field hands with long-handled dust mops wipe down each of the 36,000 solar panels at a 25-hectare installation operated by Azure Power. The site is one of the biggest examples of India’s ambitious plan to use solar energy to help modernize its notoriously underpowered national electricity grid and reduce its dependence on coal-fired power plants.

Azure Power has a contract to provide solar-generated electricity to a state-government electric utility. Inderpreet Wadhwa, Azure’s chief executive, predicted that within a few years solar power would be competitive in price with India’s conventionally generated electricity.

“The efficiency of solar technology will continue to increase, and with the increasing demand in solar energy, cost will continue to decrease,” Wadhwa said.

Two years ago, Indian policymakers said that by the year 2020 they would drastically increase the nation’s use of solar power from virtually nothing to 20,000 megawatts – enough electricity to power the equivalent of up to 3.3 million modern U.S. homes. Many analysts said it could not be done. But, now the doubters are taking back their words.

Dozens of developers like Azure, because of aggressive government subsidies and a large drop in the global price of solar panels, are covering India’s northwestern plains – including this village of 2,000 people – with gleaming solar panels.

So far, India uses only about 140 megawatts, including 10 megawatts used by the Azure installation, which can provide enough power to serve a town of 50,000 people, according to the company. But analysts say the national 20,000 megawatt goal is achievable, and India could reach those numbers even a few years before 2020.

“Prices came down and suddenly things were possible that didn’t seem possible,” said Tobias Engelmeier, managing director of Bridge to India, a research and consulting firm based in New Delhi.

Chinese manufacturers like Suntech Power and Yingli Green Energy helped drive the drop in solar-panel costs. The firms aggressively increased production of the panels and cut costs in 2011 by about 30 percent to 40 percent, to less than US$1 a watt.

Developers of solar farms in India, however, have shown a preference for the more advanced, so-called thin-film solar cells offered by suppliers in the United States, Taiwan and Europe. The leading U.S. provider to India is First Solar, based in Tempe, Arizona.

India does not have a large solar manufacturing industry, but is trying to develop one, and China is showing a new interest in India’s growing demand. China’s Suntech Power sold the panels used at the Azure installation, which opened in June.

Industry executives credit government policies with India’s solar boom, unusual praise because businesses usually deride Indian regulations as Kafkaesque.

Over the last decade, India has opened the state-dominated power-generating industry to private players, while leaving transmission, distribution and rate-setting largely in government hands. European countries heavily subsidize expensive solar power by agreeing to buy it for decades at a time, but the subsidies in India are much lower and solar operators are forced into greater competition, helping push down costs.

India, to be sure, still significantly lags behind European countries in the use of solar. Germany, for example, had 17,000 megawatts of solar-power capacity at the end of 2010. But India, which gets more than 300 days of sunlight a year, is a far more suitable place to generate solar power. And being behind is now benefiting India, as panel prices plummet, enabling it to spend far less to set up solar farms than countries that pioneered the technology.

In its solar-power auctions, moreover, NTPC is not creating open-ended contracts. The last auction, for example, was for a total of only 350 megawatts, which will cap the government’s costs. The assumption is that the price of solar power will continue to decline, eventually approaching the cost of electricity generated through conventional methods.

Most Indian power plants are fuelled by coal and generate electricity at about 4 rupees (US 7.5 cents) per kilowatt hour. Yet, even in the December auction, the recent winning bids were already comparable to what India’s industrial and commercial users actually pay for electricity – from 8 to 10 rupees. And solar’s costs are competitive with power plants and back-up generators that burn petroleum-based fuels, whose electricity costs about 10 rupees per kilowatt hour.

“At least during daytime, photovoltaic panels will compete with oil-generated electricity more than anything else” in India, said Cedric Philibert, a senior analyst at the International Energy Agency in Paris. “This comparison is becoming better and better every month.”