Tata Power Ltd said today it would buy out BP Alternative Energy Holding's 51% stake in joint venture Tata BP Solar for an undisclosed amount.
Tata BP Solar manufactures solar photovoltaic cells and solar modules in India and also exports products.
"We believe the favourable policy environment in India has led to increase in size of the solar module and solar cell market, and is a great opportunity for the company to grow," said Anil Sardana, managing director, Tata Power.
Tata BP Solar will not be impacted by BP's decision to gradually exit the solar business, said Sardana.
Tata BP Solar will continue to access some BP technology until 2013 through a separate agreement, the statement said.
BP said last Wednesday it was shutting down its solar unit, which it has been scaling back since 2008, citing continuing global challenges that made it difficult to sustain long-term returns.
India plans to build an initial capacity of 1 GW of solar power by 2013, enough to power close to 1 million homes. It would then add 3-10 GW by 2017.
Coal currently accounts for 55% of India's power generation capacity of 182,344 MW.