After the formal award of the project, Welspun Solar Madhya Pradesh Pvt Ltd will put up one solar photovoltaic project of 100 MW and another of 25 MW capacity.
Mittal said the project will cost about $225 million and will be set up on barren tract of land in Mandsaur and Neemuch district of Madhya Pradesh in 18 months.
The project would be funded in 75:25 debt-equity ratio, he said adding typically, a solar power project costs Rs 9-10 crore per MW.
"Solar energy will become a game-changer and I expect it will reach grid parity by 2015," Mittal said.
Grid parity means solar power tariff equalling that of thermal power.
Madhya Pradesh conducted the auction through ‘reverse bidding’ process under which it would award projects to those who offer to sell power at the best (least) rates.
It received bids for 430 MW for its tender for 200 MW, from 12 developers like Azure (which submitted a bid for 5 MW), BGR Energy (10 MW), Essel Infra Properties (30 MW) and IL&FS (50 MW).
Mumbai-based Alpha Infraprop Pvt Ltd submitted the lowest bid of Rs 7,900 per megawatt-hour, or Rs 7.9 per unit, for 20 MW of capacity. This is about 13 per cent lower than the global average for a photovoltaic project using crystalline panels.
Simplex Infrastructure Ltd and Acme Tele Power Ltd (ATPL) followed with bids of Rs 9.59 per unit and 12.45 a unit.
Mittal said Welspun Energy plans to add about 250 MW in the new and renewable energy projects during current fiscal. By 2015-16, it is targetting a portfolio of 1,750 MW, 60 per cent of which will be wind energy and remaining 40 per cent solar power projects.
It currently operates 30 MW of solar power plants in Gujarat, Andhra Pradesh and Rajasthan and recently bagged a 50 MW solar power project in Jawaharlal Nehru National Solar Mission (JNNSM) bidding.
The company plans to set up solar photovoltaic farms with a total capacity of 100 MW in Andhra Pradesh and has signed agreement to set up 500 MW of wind power projects in the state.