By offering competitive tariff to private industries, the Uttar Pradesh government is attracting investment in the solar power generation sector. Interested industries in setting up such solar plants should set up within 13 months of time, the government has said. The government's condition is that the such industries should directly sell power generated to UP Power Corporation for 10 years.

New and Renewable Energy Development Agency (NEDA) has been given the task to take up tariff-based competitive bidding for purchase of 200 mw power from solar photovoltaic projects to be established in the state. At present, solar power generation in the state is only around 13 mw that comes through small projects and the average rate provided for purchase through grid is around Rs 5.

However, in the competitive bidding, the companies will offer tariff at which they will be able to provide solar power to the state, taking into account their investment. The UPPCL will then enter into a 10-year power purchase agreement with the firms offering the lowest tariffs. A similar model for solar power projects is adopted in states like Madhya Pradesh, Orissa and Tamil Nadu. While Gujarat, a leader in the field, offers around Rs 15 per unit for solar power, states like Rajasthan offer land as an incentive.