In case of Photovoltaic or direct conversion of sunlight to electricity via solar cell, the efficiencies limited to about 20 percent of the absorbed sunlight. Solar thermal conversion involves the production of shaft power and of electricity via a thermodynamic cycle. In this cycle, a heat engine is driven by energy absorbed from sunlight. The heat engine is the principal feature that distinguishes the discipline of solar-thermal electricity from photovoltaic or home heating and cooling. All heat engines are limited in performance by the fundamental laws of thermodynamics. To achieve the higher temperature associated with heat engine efficiency places special requirement on the solar collector used. The collector must be designed either to suppress normal loses that is, those due to radiation, convection or conduction-or to enhance the intensity of the incident solar energy by optical concentration. Finally, to provide a useful quantity of energy at a central location, some degree of power concentration is often required. Solar thermal systems for generating electricity use tracking mirrors to reflect and concentrate sunlight on to a receiver, where it is converted to high temperature thermal energy. The high-temperature heat in the receiver is then used to drive a heat engine and electric generator to produce electricity. Currently, three architectures for Solar Thermal Systems show promise for generating; parabolic troughs, central receivers, and parabolic dishes. In parabolic trough systems, sunlight is focused on to a receiver tube that runs along the focal line of the collector. Through collectors typically track the sun in one axis. A central receiver system uses a field of heliostats, or sun-tracking mirrors, to focus sunlight on to a tower-mounted receiver. And in a parabolic dish system, both the parabolic mirror and receiver track the sun. Many system configurations are possible. However, the architectures and optical characteristics of solar thermal systems influence the choice of receiver, power conversion equipment, and scale of systems. In typical trough systems, the relatively low concentration ratios (typically 20X - 100X), as well as the inherent economics of scale of steam-Rankine power conversion equipment have led to a large-scale power plants which use a heat transfer oil to collect solar heat in the receiver tube. Central receivers because of higher concentration ratios, typically a few hundred times, and the centrally located receiver have evolved towards molten-salt systems with thermal storage capabilities. Steam-Rankine central receiver systems are also cost effective at large scales, Dish-engine systems, in which the concentrator and receiver track the sun, achieve concentration ratios over 1000 X, and require small eternally heated power converters that are efficient and low cost. Sterling engines located at the focus of the dish have shown the most promise for producing competitively priced electric. The use of hundreds of modular dish-sterling systems at an installation, similar to wind farms that are being considered for utility applications. The earth receives about 75,000 trillion KW of energy from the sun every day. Just 0.1 percent of this is sufficient to meet the energy requirements of the world. Putting this in a different way, at noon, the solar energy striking an area of 70 miles long by 70 mile wide, if converted into photovoltaic electricity, would equal to the peak capacity of all existing power plant in the world. With the ever growing demand for electric power and continuously depleting fossil fuels such as coal, oil and gas various alternative sources of energy have been resorted to by advanced nations. While wind, geothermal and water power are safe to use, they can not be tapped at all times in all places. Ocean and tidal power generation are yet to take off as viable alternatives. Tapping nuclear power poses problems of waste disposal and safety aspects. Most of the processes involve a lot of capital as well as recurring expenditure. Solar power has an edge over all the other non-conventional forms of energy sources as it is non-polluting. The solar energy is abundant and is available at all parts of the world throughout the year. Although no alternative energy sources can compete with plentiful, low cost fossil fuel, the days when we can rely on the availability of such fuels are limited. There seems to be no reasons why the solar thermal electricity option should not be pursued aggressively, and if it is, this option can begin to impact our energy requirement in the coming years. Using sunlight to create electrical and thermal energy remains the most promising source of clean renewable energy, and projections as to how quickly solar power takes off could be grossly understated. The Indian government estimates that a potential of 50,000 MW of power capacity can be harnessed from new and renewable energy sources but due to relatively high development cost experienced in the past these were not tapped as aggressively as conventional sources. Nevertheless, development of alternate energy has been part of India's strategy for expanding energy supply and meeting decentralized energy needs of the rural sector. The program, considered one of the largest among developing countries, is administered through India's Ministry of Non-Conventional Energy Sources (MNES), energy development agencies in the various States, and the Indian Renewable Energy Development Agency Limited (IREDA). India is located in the equatorial sun belt of the earth, thereby receiving abundant radiant energy from the sun. The India Meteorological Department maintains a nationwide network of radiation stations, which measure solar radiation, and also the daily duration of sunshine. In most parts of India, clear sunny weather is experienced 250 to 300 days a year. The annual global radiation varies from 1600 to 2200 kWh/sq. m. which is comparable with radiation received in the tropical and sub-tropical regions. The equivalent energy potential is about 6,000 million GWh of energy per year. The highest annual global radiation is received in Rajasthan and northern Gujarat. In Rajasthan, large areas of land are barren and sparsely populated, making these areas suitable as locations for large central power stations based on solar energy. India supports development of both solar thermal and solar photovoltaics (PV) power generation. To demonstrate and commercialize solar thermal technology in India, MNES is promoting megawatt scale projects such as the proposed 35MW solar thermal plant in Rajasthan and is encouraging private sector projects by providing financial assistance from the Ministry.