According to the Ratnagiri police, police had to resort to firing to quell the mob, which had taken to stone pelting.
The deceased has been identified as Tabrez Sehkar. The five injured protesters have been rushed to the Ratnagiri Civil Hospital.
According to the activists, hundreds of people from Madban, Jaitapur, Nate and other villages in the district on Monday held spontaneous protests against the 9,900 MW project.
Maharashtra Home Minister R R Patil said the agitators had stormed the police station when most officials were on duty at the project site in Jaitapur since the locals were to stage a demonstration there.
Anger was brewing in the area following Union Environment Minister Jairam Ramesh's statement here last Friday ruling out a "rethink" on the project.
Patil said the protesters were also suspected to have decamped with some firearms and ammunition.
"A deputy superintendent of police and some constables have been injured in the incident," Patil said, adding the violent crowd set afire some police vehicles, forcing the police to fire in the air to scare the protesters away.
However, as that failed to bring the situation under control, police fired at the crowd resulting in the death of Sejkar.
The minister's statement drew angry criticism from the opposition with Girish Bapat (BJP), Bala Nandgaonkar (MNS) and Subhash Desai (Shiv Sena) accusing the government of not taking seriously the protests against the proposed facility.
The issue of police firing was raised in the House by Shiv Sena leader Subhash Desai, who demanded a statement from the government.
Describing the firing as "shocking", Desai alleged that the authorities were putting pressure on the locals to accept the compensation and threatening them with dire consequences if they refused.
The House had to be adjourned for 10 minutes and later for the day as the opposition demanded a detailed statement on the issue.
The issue also figured in the legislative council where Revenue Minister Narayan Rane said the protesters tried to forcibly enter the project site at Jaitapur and were stopped by the police, leading to stone pelting.
Police had to resort to baton charge and firing to bring the violent protesters under control, he said.
With inputs from PTI