New Delhi, Nov 19 (IANS) In a major boost for the energy sector, the cabinet Thursday approved the Jawaharlal Nehru National Solar Mission that aims to generate 20,000 megawatt of power a year by 2022.

'The cabinet has sanctioned Rs.4,337 crore ($900 million) for the initial activities in this regard,' Information and Broadcasting Minister Ambika Soni told reporters after the meeting of the cabinet presided over by Prime Minister Manmohan Singh.

'The mission initially aims at generating 200 MW by 2012,' she added.

Noting that Rs.355 crore had initially been allocated for reserach and development, she said this would be 'aggressively pursued' to reduce costs.

This apart, there would be field testing of emerging applications in the latter part of the mission, while existing applications would be used in the first part, the minister said.

In his Independence Day address to the nation Aug 15, Manmohan Singh had said the solar energy mission would be launched Nov 14. But the launch date was put off as the government was not ready with its implementation.

Two major changes have been made since the last draft of the mission document was made public, members of the council said on condition of anonymity. One was to push back the target date for generating 20,000 MW a year from solar power to 2022 from 2020, to bring it in line with India's five-year plan cycle.

More important, the section on putting a cess on coal used for power generation in order to fund the solar mission has been dropped, more than one member of the council told IANS. 'Without this, how are we going to finance this mission?' one of them wondered.

The main bottleneck in spreading solar energy today is cost. While it costs Rs.3-4 to generate one unit of electricity from coal, it costs Rs.14 to do so from solar photovoltaic cells. If various subsidies given to the coal industry now are removed, the cost will go up to Rs.5-6, still well below the cost of solar power.

This does not take into account the other costs of using coal - respiratory diseases caused by pollutants released when coal is mined and then burnt, the destruction of soil associated with the mining, the effects of climate change caused by coal burning in terms of reduced farm output and more frequent and more severe droughts, floods and storms.

While there is no official calculation of these costs, an environmental economist has estimated them to total Rs.4 per unit. That would bring the real cost of producing electricity from coal to Rs.9-10 per unit, still below the cost of tapping solar power.

But solar power technology has been improving rapidly. Till a few years ago, it cost Rs.27 to produce one unit of electricity from solar photovoltaic cells.

While the renewable energy industry is excited about the mission, it is not happy with the planning process.

'We are being asked to increase solar energy production hundredfold in the next 13 years, from 200 MW to 20,000 MW by 2022, but we have not been consulted on how it is to be done,' a senior executive of a firm making solar photovoltaic cells told IANS.