Harnessing the Sun: Support required for adoption of solar pumps for irrigation

Support required for adoption of solar pumps for irrigation

Reliable and affordable power supply for irrigation is essential for increasing agricultural productivity. However, the power supply situation in the agricultural sector remains dismal as many farmers continue to rely on erratic rainfall for irrigating their crops. Others use polluting diesel pump sets to meet their energy requirements for irrigation. Farmers who do have grid connections for pumps suffer from inadequate power supply due to frequent and prolonged power cuts and erratic voltage. This condition persists in most states even when agricultural consumers receive free or highly subsidised electricity, leading to huge losses for discoms.

Solar pumps have emerged as a viable option to meet farmers’ irrigation requirements. The adoption of solar pumps would reduce the financial losses of discoms as they will no longer have to disburse subsidised power to farmers. Solar power is generated during the day and is thus ideal for farming activities, offering adequate power for irrigation. Farmers will not have to spend money on sourcing expensive and polluting diesel for irrigating their fields in case of power cuts. Any surplus power from solar pumps can be used by farmers for lighting or other applications. It can even be sold to discoms at competitive prices providing extra revenue for farmers.

Policy support

The central government has been actively encouraging the uptake of solar pumps among farmers through various schemes. All these programmes have some form of subsidy, which makes solar pumps affordable for farmers. The Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) is the latest scheme introduced by the government. With a total financial outlay of Rs 480 billion, KUSUM aims to encourage farmers to use solar power for meeting their irrigation requirements through the solarisation of existing pumps, and installation of new solar pumps and grid-connected ground-mounted solar power plants. The scheme not only provides a capital subsidy to farmers but also allows them to sell surplus green power to discoms. Many states have also rolled out similar schemes. For instance, the Gujarat government announced the Suryashakti Kisan Yojana in July 2018 to provide solar panels to farmers for generating clean and low-cost energy. The Himachal Pradesh government approved the Saur Sinchayee Yojana, worth Rs 2.24 billion, in August 2018. Other states like Maharashtra, Uttar Pradesh, Bihar and Karnataka have also initiated comprehensive solar pump programmes to address farmers’ woes and reduce discom losses.

Solar pump uptake

With continued impetus from the central and state governments, a total of 177,595 solar pumps were installed across the country between 2015-16 and 2018-19. The majority of these installations are being used for meeting irrigation requirements. Andhra Pradesh, Chhattisgarh, Madhya Pradesh, Rajasthan and Uttar Pradesh witnessed the maximum solar pump deployments during this period. These five states together account for 75 per cent of the total solar pump installations while Chhattisgarh alone accounts for 27 per cent. The high deployment rates in these five states can be attributed to the state governments’ initiatives to procure solar pumps in bulk and provide them to farmers at subsidised rates.

Over the past one year, several solar pump tenders have been issued by various state agencies. In January 2018, Karnataka Renewable Energy Development Limited issued a tender for procuring and setting up 1,013 solar pumps of 5 horsepower rating. The successful bidder had to supply, install, test and commission the solar water pumps, besides providing operations and maintenance services. In July 2018, Telangana State Renewable Energy Development Corporation Limited launched a tender for the deployment of solar pumps across the state under the Jawaharlal Nehru National Solar Mission’s off-grid and decentralised solar applications programme. The tender was supported by the Ministry of New and Renewable Energy. In August 2018, New and Renewable Energy Development Corporation of Andhra Pradesh Limited issued a tender for the installation of 25,000 off-grid solar photovoltaic water pumping systems. In December 2018, Maharashtra State Electricity Distribution Company Limited issued a tender for 50,000 solar pumps to be installed at project sites of identified farmers in the state.

Business models

Apart from supportive policies and capital subsidies, viable business models have contributed to the uptake of solar pumps in the country. The most popular are the community-based solar irrigation and shared-service models. In the community-based solar irrigation model, a few farmers together form a joint liability group. This group of farmers then buys one solar pump through a joint loan from a bank. A joint loan not only makes solar pump financing affordable for farmers, but also distributes the risk of payment defaults for banks. This model is more popular among farmers with large farms as they can afford to repay such loans. In the shared-service model, a renewable energy service company (RESCO) owns and operates a solar pump, while water drawn from this pump is shared by all the farmers in a specific area. Farmers pay a minimum service charge to the RESCO for using this water. This model is more popular among farmers with small land parcels that cannot bear the upfront capital cost of these pumps.

In areas not connected to the grid or with inadequate power supply, RESCOs use solar pumps to develop microgrids. The surplus power from these microgrids is used for lighting and other applications such as grinding and threshing. RESCOs also operate portable solar pumps, which are used on a rotation basis by farmers in a village. In the case of grid-connected systems, the surplus power is sold to discoms, bringing in additional revenue for farmers or the village as a whole, thus aiding economic development in the area.

Challenges and the way forward

Massive subsidies on solar pumps reduce the upfront capital investment to as low as 10 per cent. Even then the uptake of these systems has been lower than expected, especially in the agricultural states of Haryana, Punjab and Bihar. One of the major reasons for the low uptake is the lack of awareness among farmers. For farmers who are aware about government subsidies and policies, securing financing for these pumps is a challenge. Many lenders consider solar pumps as bad investment, and are often unaware about the government schemes. Thus, state governments, in coordination with NGOs working at the grassroots level, need to undertake capacity building and awareness programmes for farmers as well as lending communities in villages. Farmers also face issues in subsidy disbursement as the application process is complicated and time-consuming in many states. This becomes particularly challenging for small and marginalised farmers, who are reluctant to invest in a more expensive and new technology. Thus, streamlined processes should be developed to encourage more farmers to adopt this renewable source of power for irrigation. Since solar power is an intermittent generation source, solar pumps may reduce electricity generation during cloudy days. This further dents farmers’ confidence in solar pumps. To this end, RESCOs can work with these farmers to set up solar pumps with backup power systems. Further, skilled manpower may not be available to operate and maintain the system throughout the year. Thus, skill building for farmers to make them self-reliant is another focus area.

Going forward, state agencies and local authorities should work on creating more awareness regarding the benefits of solar irrigation through demonstration and pilot projects. Innovative financing schemes need to be developed to increase the uptake of solar pumps by small debt-ridden framers, who will benefit the most from these pumps. Local discoms can also work with RESCOs to implement large solar irrigation programmes in certain areas, and this will help them in load management and reduce their financial burden. With government policies and business models already in place, all that is required to drive solar pump uptake is capacity building by farmers and local authorities.