India's National Action Plan on Climate Change, first announced last year, includes plans to install up to 200 GW of solar generation capacity by 2050. The first 20 GW of solar capacity is planned to be installed by 2020.

In the first phase of the plan extending through 2012, the government plans to deploy 100 MW of solar cells on public sector buildings, promote utility-scale photovoltaic projects and set up local solar manufacturing parks. The plan envisions 1 GW installed solar generation capacity by 2012, up from almost nothing in 2008, according to a research note from Barclays Capital.

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The government aims to spend an estimated US$20 billion over the next 30 years on the plan. About $1 billion will be spent in the next five years, Barclays estimates.

As part of the plan, India intends to set up two or three solar manufacturing parks consisting of polysilicon manufacturing plants to make solar cells capable of generating up to 2 GW per year.

"In our view, solar PV capital costs relative to India's per capita GDP currently make India an attractive market for commercial/industrial applications and we expect growth in this segment to be significant," said Vishal Shah, an analyst with Barclays Capital in an research note. "India is currently not a major solar market, but this new proposed program has the potential to attract several project investors for large scale utility projects," he added.

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Companies who could benefit from the plan include several that already have links to India such as GT Solar, First Solar, JA Solar and BP Solar, Barclays said. "We expect more details on the solar plan to be announced over the next few months and implementation to begin from 2010," said Shah.

The news comes as Barclays predicts an uptick in prospects for U.S. solar companies. U.S. firms could benefit from anticipated utility contracts and new solar grant programs coming from the U.S. Department of Energy, the analyst firm said.

By contrast, stock prices for China's solar companies are inflated and "shipments guidance for select Chinese stocks can still be considered aggressive," Shah said.

Market watcher iSuppli projected a global downturn in solar cell sales in 2009, largely due to the end of government incentives in Spain, a high growth solar market. Barclays noted that in addition to India's new plan, China and Greece are opening up new solar incentive programs.