Many of the monasteries, or gompas, lining Ladakh's Indus valley, in northwest India near China, boast a small blue rectangle of photo-voltaic technology. Standing 3,500 metres high (11,480 ft) they have the advantage of being closer to the sun than many other inhabited places.

"There's a lot of scope as we have over 300 days of sun a year here, and average solar radiation is high," said Tashi Chombel, an engineer in Ladakh's local government.

Solar power is mostly used for night-time lighting rather than to keep Ladakh's bitter winter cold at bay, which would need more costly systems. Villagers built around green oases in Ladakh's barren valleys collect sparse poplar wood and animal dung for fuel.

Most power in the Buddhist-dominated region comes from hydroelectric plants or diesel generators, but the bustling capital, Leh, is regularly plunged into darkness because of lack of supply. Businesses such as guesthouses stock up on candles.

Blackouts are unlikely to stop with just one new 45-megawatt hydroelectric plant starting construction this year, and not due onstream for five years. And running generators is getting expensive with diesel costing twice as much as two years ago after oil rose to more than $70 a barrel.

Such blackouts are seen as an obstacle to development in India, aiming for double digit growth and competing for oil assets around the world with China and western majors to feed the surging energy needs of its 1.1 billion population.

ENLIGHTENMENT

The government aims to bring electricity to all rural areas by 2012 and has committed $3.1 billion for rural electrification.

About 500 million Indians lack access to electricity, more than the population of the European Union, according to the World Bank, whose private-sector lending arm, the International Financial Corp., has said it will help with rural pilot projects.

"There's a misconception that rural areas cannot pay -- they are paying the highest cost in diesel generation," India's power secretary, R.V. Shahi, told a recent industry conference.

The government gives a 90 percent subsidy to those looking to install a solar panel in Ladakh, which cost around 13,000 to 16,000 rupees, but despite its ambitious rural target and the painful cost of oil it has given out few such grants this year.

"Cost is definitely one of the key issues and solar is much more expensive than wind, which is seeing phenomenal growth," said Bishal Thapa of ICF Consulting in Delhi. "The kind of institutional support solar receives is for off-grid applications and tends to go up and down."

Those who cannot wait rely on private diesel generators, but they suffered a 7 percent hike in diesel prices in June, as the government tried to limit losses for state-run refiners suffering from the gap between capped domestic and soaring world prices.

Chombel says that apart from fuel costs, diesel generators can take months to replace if they break down in Ladakh, which is cut off by road for about six winter months each year.

The Leh-based Ladakh Ecological Development Group has replaced one such generator with a 100-kilowatt solar plant, supplying power to 10 villages, and is planning another one.

It also advocates so-called passive solar for warmth, through heat-trapping brick walls and south-facing glass windows, that alone can keep rooms above zero when it is minus 20 degrees centigrade outside. It says this can reduce the use of wood.

But the agency seems pessimistic on funding for greater use of solar power. "Funding is not easy," said its director, Phontsog Namgyal. "The plant cost 77 million rupees, which came from donors, and one-off subsidies for solar panels are limited."

YAKS

The plant is run by Tata BP Solar, a joint venture between BP and the Tata Group, which says it has installed over a megawatt of solar power in Ladakh, including about 14,000 home lighting systems and over 9,000 solar lanterns.

For many isolated villages off the national grid in Ladakh's rugged terrain, such small-scale distributed generation is the only likelihood of light. The villagers pay an installation charge and then effectively rent the lighting systems.

"The systems were dropped off at the last motorable point, after which they were transported onwards by donkeys, yaks or human beings, sometimes at several days walking distance," said Tata BP Solar of one project. "The weather was bone chilling."

Tata BP Solar plans a 25-kilowatt power plant in Leh this year and more in the rest of Ladakh next year.