India’s rapid expansion of renewable energy and transmission projects requires large swathes of land. As the scale of land needed for both generation and transmission grows, it is essential to ensure fair and transparent compensation for affected farmers and land-dependent communities. Land acquisition remains one of the biggest challenges facing the energy sector. If concerns over compensation and consent are not adequately addressed, projects can quickly run into legal disputes and prolonged delays, leading to cost overruns and losses for developers, while also disrupting the livelihoods of farmers and other land-dependent communities. The issue has gained greater visibility following recent farmer protests in Gujarat over land used for transmission infrastructure. While compensation mechanisms for land acquisition exist, their effectiveness depends on whether they adequately reflect the economic and livelihood impacts faced by affected communities.
This article examines the existing compensation frameworks and their limitations, the challenges faced by developers, and the concerns of farmers and other land-dependent communities. It incorporates the views of several sector experts on how these challenges can be addressed while supporting the pace of India’s clean energy transition.
Policy landscape
Power transmission projects in India are governed by the Electricity Act, 2003 and the Indian Telegraph Act, 1885. Land for the development of transmission line projects is not acquired. Instead, transmission utilities are granted the right of way (RoW) to install towers and overhead lines, while ownership of the land continues to remain with the farmer or landowner. After construction is completed, landowners are generally permitted to continue agricultural activities beneath the transmission lines.
To bring greater uniformity in compensation practices across the country, the Ministry of Power (MoP) first issued the RoW Compensation Guidelines in 2015. The compensation framework was substantially revised through the MoP’s guidelines dated June 14, 2024, followed by amendments issued on March 21, 2025 and December 15, 2025. Under the revised framework, compensation for the tower base area has been increased to 200 per cent of the market value of the land, while compensation for the RoW corridor varies based on the location of the land. Farmers are entitled to 30 per cent of the market value in rural areas; 45 per cent in municipalities, nagar panchayats and other notified urban planning areas; and 60 per cent in municipal corporation and metropolitan areas. The market value is determined by a market rate committee based on valuations carried out by independent land valuers.
Meanwhile, the land procurement process for renewable energy projects differs from that for transmission projects. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act) provides the principal statutory framework for compensation, rehabilitation and resettlement. It is mainly applicable in cases of compulsory acquisition, particularly by the government. However, a large number of privately developed solar and wind projects follow a different route, with developers purchasing or leasing private agricultural land directly from landowners. In such cases, the payment is generally determined through a mutually agreed sale price or lease rent, based on prevailing circle or market rates and, in some cases, specific state or solar policies and guidelines by the Ministry of New and Renewable Energy.
Farmers’ woes
Land-related impacts of large infrastructure projects extend beyond landowners. Even before compensation is determined, another challenge needs to be solved: establishing who actually owns the land and is therefore entitled to receive the compensation. According to Pallavi Bedi, Partner, Phoenix Legal, disputes during land acquisition and RoW typically arise over land titles and the identification of the rightful owners. This is particularly challenging in India because agricultural holdings are often fragmented and land records are unmutated. As a result, determining the rightful recipient of compensation can become a source of delay.
There are also instances where, although renewable energy and transmission projects benefit the wider region and country, local communities often bear the costs. In Charanka, Gujarat, villagers depended largely on farming and animal herding for their livelihoods before the Charanka Solar Park was developed. The land used for the project comprised private land purchased from small farmers as well as government-owned land classified as wasteland. However, this land also served as a common resource for subsistence farming and grazing. It was also a source of Prosopis juliflora, which was used to produce charcoal. The loss of these land resources, therefore, posed a significant threat to livelihoods (Komali Yenneti, Rosie Day, 2016, Journal of Rural Studies). Similar distributional irregularities have been observed in Rajasthan’s Bhadla and Fatehgarh solar parks. The absence of formal land-use records and titles has prevented some farmers and agro-pastoral groups from accessing monetary benefits linked to the land. At the same time, agro-pastoral groups and landless households, often from marginalised communities, have lost access to common resources used for livestock rearing as well as private farmland that provided wage employment (Sukanya Khar, Kaveri Iychettira, 2026, Energy Research & Social Science). In the case of transmission projects, while the RoW allows farmers to retain ownership of their land, restrictions on land use can continue to affect their livelihoods over the long life of the infrastructure. Anna Biswas, Managing Director, India, Forum for the Future, highlights, “While RoW does keep the title with the farmer, it imposes severe restrictions for the over 30-40-year life of that infrastructure. This means no construction, tree height limits and other cropping restraints, all of which mean that the type of income that can be generated from the land is restricted. This lack of flexibility reduces a farmer’s resilience in rapidly changing and volatile times.”
Alternative compensation mechanisms
The current land compensation mechanisms do not fully capture the wider and long-term impacts of renewable energy and transmission projects. The financial impact on farmers can continue well beyond the initial payment, particularly where project infrastructure affects how land can be cultivated or limits its future use. “Compensating based on land value alone is not enough. Farmers also face recurring losses because crops may yield less under transmission towers and lines. In many cases, mechanised farming becomes difficult, and the land gets fragmented. There is also a loss of future opportunities, such as the possibility of using the same land for solar or wind projects,” says Labanya Prakash Jena, Director, Climate and Sustainability Initiative.
Addressing these concerns would require not only revisiting the quantum of compensation, but also ensuring that the process of compensation is transparent and that communities receive benefits beyond the initial payment. Singh highlights Tata Power’s approach of making compensation payments directly into farmers’ Aadhaar-linked bank accounts and undertaking corporate social responsibility (CSR) activities based on need assessments to support farmers and address local concerns. Such CSR activities are carried out by other developers as well.
There is also an option for moving from one-time compensation towards models that provide benefits over the life of the project. More equitable compensation models could include periodic payments or a share of project revenues, allowing farmers to benefit from the continued use of their land. Dr Debajit Palit, Centre Head, Centre for Climate Change and Energy Transition, Chintan Research Foundation, suggests such an approach. “Instead of treating compensation as a one-time payment, part of the compensation could be structured as an annual payment, similar to a lease. Another possibility is to provide farmers with an equity share in the project so that they can benefit as the company earns profits in the future,” he says. For transmission projects, Biswas similarly argues for linking compensation to the long-term value generated by the infrastructure. “We would stop asking ‘what is the RoW corridor worth today?’ and start asking ‘what share of this asset’s 40-year revenue stream should the land that hosts it receive?’,” she says.
Furthermore, the benefits of compensation mechanisms should not be limited to individual landowners. A share of project revenues could support local infrastructure, livelihoods and other development needs, ensuring that benefits reach landless workers and others who depend on the land but do not hold formal titles. Dr Palit also emphasises the importance of ensuring that the benefits of renewable energy projects reach local communities, suggesting that companies can consider community benefits as part of their CSR initiatives.
Moreover, developers can help reduce the livelihood impact on affected communities by creating alternative sources of income. Through projects, they can ensure that they create local jobs and contracts during construction; invest in livelihoods and local infrastructure such as roads, irrigation and skill development; and use technologies that minimise the land footprint. Dr Sapan Thapar, Associate Professor, TERI School of Advanced Studies, similarly suggests focusing on climate-resilient farming and encouraging farmer-producer organisations with linkages to agricultural markets such as e-NAM. He also suggests developing skills in areas such as solar PV, biomass, cold storage and solar dryers, while training rural youth to manage decentralised energy plants.
The way forward
Land-related disputes affect multiple stakeholders, including farmers, local communities, developers and the wider energy transition ecosystem.
The continued occurrence of protests, despite the availability of compensation and other mechanisms, highlights the gap between policy and ground-level implementation. It raises concerns about the effectiveness of these measures, which ultimately depends on how well they address the actual economic and livelihood concerns of affected communities.
Addressing these challenges will require improvements not only in compensation but also in the way land is identified, acquired and administered. Singh suggests digitising and integrating land records, and publishing the availability of large land parcels suitable for renewable energy projects on an online portal. This could improve transparency around land availability and help developers identify suitable sites more efficiently. He also recommends single-window processing for statutory approvals and the creation of special cells or units in renewable energy-active states to address administrative, law and order and other socio-political issues related to renewable energy projects.
Going forward, developers could reduce their dependence on land by diversifying their project models. Offshore wind, floating solar and agrivoltaics can reduce pressure on conventional land resources, while agrivoltaics can allow farming and solar generation to coexist.
All in all, a combination of fair compensation, community participation, better implementation of existing policies and alternative project models can help reduce land conflicts, minimise project delays and support faster renewable energy and transmission development. This will be critical for India’s energy transition. w
Nidhi Dua
