Union Minister for Power, Coal and New & Renewable Energy Piyush Goyal said that this decision was taken following a request from the state government.
Punjab Chief Minister Parkash Singh Badal had requested the central government to allocate a mega solar power plant.
Half of the 2,000MW solar power generated will be acquired by the state-run power generator, National Thermal Power (NTPC).
A detailed proposal will be issued by the Punjab government on its plan to install 100MW solar panels on rooftops of government buildings.
Goyal told said about INR4bn ($65.7m) will be provided jointly by Rural Electrification and Power Finance to the state government for the installation of smart electricity meters in Punjab, while the remaining INR1bn ($16.4m) for the project will come from the state.
The project is part of the Union government’s efforts to boost eco-friendly and cost effective solar power generation, Press Trust of India reported.
