The Indian government is set to award 100 MW power projects to all states under the Nehru National Solar Mission (NNSM) by August this year.

Many states have come forward for the proposal under the NNSM, Uttamkumar Reddy, chairman, Solar Energy Manufacturers Association of India, said today.

"The mission envisages setting up of small and large solar or photovoltaic power plants to achieve the 1,100 MW target of phase-I, at an estimated cost of about Rs 18,000 crore," Reddy said during the announcement of Solarcon India 2010, a three-day solar energy conference which is set to kick off in Hyderabad on July 28.

He said states like Andhra Pradesh, Rajasthan, Punjab, Maharashtra, Gujarat, Chhattisgarh and Kerala are among the front-runners for the solar projects.

Under these projects, for each unit, the electricity departments of states concerned would pay Rs 5.50 and another Rs 12 would be paid by the government of India through Indian Renewable Energy Development Agency (IREDA). "Going forward, the industry hopes, pricing would be brought down to an extent of Rs 5-7 per unit to be produced at grid parity," he said.

He said there are only two funding agencies to solar power industry in the country - IREDA and Power Finance Corporation. He hoped that in the absence of banks coming forward to support solar industries, foreign financial institutions may find way to enter the industry.

Speaking on the developments in the industry, Ramesh Subrahmanyam, COO, Titan Energy Systems, said the government has to properly address the licensing issues. He suggested that there has to be a single window licensing.

"Energy Task force was set up by the FICCI to come up with a proposal to develop a single window system and make recommendations to the union government," Subrahmanyam said.

He said the cost of generation per MW of solar power would eventually come to one-third of the present Rs 14 to 15 crore. New technologies like cell efficiency improvement may bring down the cost of production.

The current installed capacity of solar power, which is pegged at 10 MW, may witness single digit growth this year, Subrahmanyam said.