US solar power developer SunEdinson plans to create Indias largest solar-panel facility in a joint venture with domestic conglomerate Adani Enterprises.
The factory will be located in the western state of Gujarat and the two parties will invest as much as $4 billion in the building process. The project is estimated to be completed by 2018.
“This facility will create ultra-low cost solar panels that will enable us to produce electricity so cost effectively it can compete head to head, unsubsidised and without incentives, with fossil fuels,” said SunEdisons CEO Ahmad Chatila.
The joint venture is in line with Indias plan to increase solar installations in order to ensure non-stop electricity to its population. Led by Prime Minister Narendra Modi, the government raised its aim to expand solar generation capacity to 100 gigawatts by 2022 from a previous target of 20 gigawatts.
India relies heavily on coal-generated power, which is highly unpredictable and causes frequent electricity outages. Indias ground get hits by twice as much sun rays compared to most European countries, but still the energy source only accounts for less than 1% of the countrys power generation.
Currently Indias solar generation capacity stands at 2.7 gigawatts out of a 255 gigawatts overall capacity. Also solar-powered electricity is nearly twice as expensive compared to power created via sources like coal.
SunEdison, the worlds largest developer of wind and solar power by projects, said that the joint venture will generate almost 20 000 jobs and will also help Indias efforts to boost overall domestic manufacturing.
The project was announced on Sunday at the “Vibrant Gujarat” event held in Mr. Modis home state, where he was chief minister until last year. Mr. Modi has also invited other companies from China, Japan, Germany and the United States to invest into Indias solar power sector in an attempt to jump start economic growth.
Indias dependence on coal and other fossil fuels has led the country into a trade deficit threatening its economic development. Imports of oil, gas and coal have dramatically increased in the past few years, prompting Mr. Modi to launch its “Make in India” campaign.
SunEdison gained 1.73% on Friday and closed at $19.42 in New York, marking a one-year increase of 34.12%. The company is valued at $5.26 billion. On Monday in pre-market trading the stock edged up 4.79% to $20.35 at 12:43 GMT.
According to the Financial Times, the 14 analysts offering 12-month price targets for SunEdison Inc have a median target of $28.00, with a high estimate of $40.00 and a low estimate of $5.00. The median estimate represents a $44.18% increase from the last close price.
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