Solar company executives have often talked about India as a potentially huge market. Now they can count on the government's help to make that a reality.

The Indian government has greenlighted its first national solar power program that aims to see 20 gigawatts of solar energy generation capacity by 2020, the Reuters reported. The program comes with a $19 billion budget, money that would subsidize manufacturing and power project building, as well as research and development.

That's an ambitious goal for India, which added about 25 megawatts of generation capacity in 2008, according to GTM Research. From 2001 to 2008, the country had erected 143 megawatts of solar energy systems.

India's plan calls to mind a similar initiative by neighboring China, which recently selected 462 megawatts of projects for its Golden Sun program, which would subsidize at least half of the installation costs (see Here comes China's $3B, 'Golden Sun' Projects). China is looking at reaching 10 gigawatts of solar energy generation capacity by 2010.

India's plan is bigger, but realizing it could be a lot tougher.

For one, India doesn't have the same booming solar manufacturing sector that China enjoys. China is home to some of the largest producers of solar panels in the world, such as Suntech Power and Yingli Green Energy. In fact, Suntech plans to increase its production capacity to 1.4 gigawatts by the middle of 2010, the company said this week.

The vast majority of solar energy equipment from China goes overseas to Europe and North America. China's solar initiative would create a huge market for its domestic manufacturers.

More Indian companies are entering the market. Moser Baer, the giant optical mediastoragemaker, has invested in the production of both crystalline silicon and amorphous silicon solar panels. Back in early 2008, the company discussed investing $1.5 billion to boost its amorphous silicon solar panel production to 565 megawatts by 2009.

But the recession forced Moser Baer to halt manufacturing of crystalline silicon panels altogether until August this year, the company said. Two months ago, Moser Baer said it won a contract to build a 1-megawatt solar farm in India using its amorphous silicon solar panels.

Lat month, KSK Surya Photovoltaic Venture said it would spend $500 million to buy land and build a factory in Hyderabad that would use factory equipment from Applied Materials to make amorphous silicon solar panels.

India could also be a large market for solar thermal power developers. Executives from German and American companies such as Solar Millennium and BrightSource Energy have pegged India as a desirable location to erect fields of mirrors to concentrate the sunlight to heat fluids and produce steam, which is then piped to a generator for electricity production.

eSolar, based in Pasadena, Calif., meanwhile, has licensed its solar thermal power technology to Acme Group. Acme plans to build solar farms in India (see eSolar's Transformation Continues With Indian Deal).

Photo via Moser Baer.