The investment by GE’s financial services unit in Welspun Energy Ltd.’s 151-megawatt photovoltaic plant is the U.S. company’s first in the local solar industry. GE said this week that it plans to invest more than $1 billion a year globally in renewable projects that promise “very significant returns.”

“India has gained incredible potential for the development of solar power,” Raghuveer Kurada, business leader for India and South East Asia at GE Energy Financial Services, said in a statement. “Our investment in Welspun Renewables’ solar project helps to realize that potential.”

India, which had virtually no solar power three years ago, plans to draw $11.7 billion of investment by 2017 to expand capacity sixfold as plunging panel prices make generation less costly. In contrast, fuel-supply bottlenecks are driving up the cost of power produced from coal and natural gas.

GE has already invested $10 billion in mostly wind and solar plants. Its entry into India’s solar industry “boosts the credibility of the whole sector” and demonstrates that local projects are now big enough and developers established enough to attract international interest, Welspun Energy Managing Director Vineet Mittal said in a phone interview from Mumbai.

Total Cost

Welspun built the plant at a total cost of 11.8 billion rupees ($194 million), Mittal said. GE’s investment will free up cash for Welspun to build new projects as it seeks to double capacity to 600 megawatts by the end of this year.

The plant in Neemuch in central Madhya Pradesh state operates at a capacity utilization factor of 26 percent, the companies said today in the joint statement. The figure is a measure of how efficiently a plant produces energy, compared with its maximum capacity.

In comparison, the average capacity utilization factor of plants in Gujarat state, home to the mostsolar-power capacity in India, was 18.7 percent in their first year of operation, Bloomberg New Energy Finance said in an October report.