A rough rule of thumb is that one megawatt of coal generating capacity costs about $1 million to build, while solar capacity costs roughly double that.

“The amount which we are going to talk about is huge. I can only say that much,” Farooq Abdullah, told reporters, adding that Prime Minister Manmohan Singh plans to announce its new policy next week.

“Our job is to bring the costs down. Whether we are going to give concession on import duties, whether we are going to give a sizeable subsidy to purchase solar power, all will be outlined in the mission,” he said.

India has set a target of building 78,700 MW of new power capacity in the five years ending in 2012, but top officials have said the country will fall short of that target.

Abdullah said 85% of the solar panels currently made in India are exported.

“We are unable to use them in the country as prices are high,” he added.

Indian firms including Moser Baer, XL Telecom & Energy, Bharat Heavy Electricals, KSK Energy Ventures already make solar panels or have plans to do so.

Abdullah also said that the William J. Clinton Foundation is talking to Gujarat and Rajasthan to set up 3,000 MW solar power units in each.