With a major portion of the Indian population being dependent on agriculture for their livelihood, there is a need for proper irrigation facilities in the country. However, power supply to rural farmlands is often unreliable, erratic and of low quality, making it inadequate for running grid-connected pump sets. Thus, many marginal farmers continue to rely on rainfall to irrigate their crops, while their more prosperous counterparts use polluting diesel pump sets. This is a common occurrence despite agricultural consumers receiving heavily subsidised or even free electricity in many states, while commercial and industrial consumers bear the burden of cross-subsidisation by paying exorbitant tariffs.
Solar pumps have emerged as an ideal solution to address these issues. Not only would these meet farmers’ requirements for affordable and quality power, but they would also free discoms from the burden of supplying power to this huge consumer base, which accounts for the lowest revenue amongst all consumer segments. Farmers often have to irrigate at night owing to power shortages during the day; solar pumps solve this problem as well. In addition, solar pumps are a non-polluting source of power compared to their diesel counterparts. They have also been made affordable for farmers in recent years through various incentives and subsidy programmes of the central and state governments. Thus, farmers no longer have to opt for diesel pumps with high operating costs to overcome erratic power supply. Further, surplus power from solar pumps can be used for lighting or other applications.
Progress so far
Over the past decade, various schemes have been adopted both at the central and state levels to promote the use of solar pumps for irrigation. Without doubt, the most far-reaching of these is the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), which was launched in March 2019 by the Ministry of New and Renewable Energy (MNRE). It is primarily aimed at promoting the use of solar energy in the agricultural sector through three components: small renewable energy plants on the barren/fallow land of farmers, stand-alone off-grid solar water pumps, and solarisation of existing grid-connected agricultural pumps.
As per recent MNRE data, over 281,368 solar pumps have been installed in the country as of February 2021. This signifies an addition of roughly 25,000 pumps in 2020-21 alone, which is a significant rise in the yearly installation of solar pumps. In 2017-18, just 3,300 pumps were installed, while in 2018-19 and 2019-20, 9,500 and 6,235 solar pumps were installed respectively. Among states, Chhattisgarh is in the lead with 61,970 solar pumps installed so far, and Rajasthan is close behind with 55,195 pumps. Other leading states include Andhra Pradesh, Uttar Pradesh and Madhya Pradesh with 34,045, 30,847 and 24,684 solar pumps installed respectively.
Many developments have taken place recently in the solar pump space, both at the central and state levels. In April 2021, the MNRE invited interested firms to submit expressions of interest (EoI) for the installation of innovative solar pumps across India under the PM-KUSUM scheme. This followed a similar notification from the MNRE in September 2020. The ministry had issued guidelines for promoting innovative solar pumps in June 2020. In January 2021, Energy Efficiency Services Limited invited bids for the development of 317,975 off-grid solar water pumps across 30 states and five union territories under Component B of the PM-KUSUM programme. Under this tender, developers were required to carry out the design, manufacture, supply, transport, installation, testing, commissioning, and repair and maintenance of pumps for five years.
At the state level, the most recent announcement came from the Odisha Renewable Energy Development Agency, which has floated a tender to select developers to set up 500 MW of solar projects under Component A of the PM-KUSUM programme. The projects will be set up under the build-own-operate model. A ceiling tariff of Rs 3.08 per kWh has been notified for the tender, and the bid submission deadline is June 22, 2021.
In January 2021, the Maharashtra Energy Development Agency issued an EoI for conducting feasibility surveys and the inspection of solar pumps set up under Component B of the PM-KUSUM programme in the state. In addition, the bidders would be responsible for verifying online application documents, conducting technical inspections, verifying installed pump sets, and testing the pumps. In the same month, West Bengal State Electricity Distribution Company Limited floated a tender to set up grid-connected solar systems for agricultural consumers under Component C of the PM-KUSUM programme. As per the tender document, 700 pumps are to be solarised across the districts of Hooghly, Purba-Burdwan and Birbhum. These pumps are to be spread across locations within the three districtsin seven packages of 100 pumps each.
In December 2020, Ajmer Vidyut Vitran Nigam Limited (AVVNL) floated a tender for the development of distributed grid-connected solar systems under Component C of the PM-KUSUM programme. As per the tender document, 479 distributed solar systems would be installed at 29 select feeders in the AVVNL network on a turnkey basis. In the same month, Madhya Pradesh Urja Vikas Nigam Limited invited bids from developers for the installation of 100 MW of decentralised grid-connected solar power projects under Component A of the PM-KUSUM programme. The grid-connected projects were to range between 500 kW and 2 MW in generation capacity, and record a capacity utilisation factor of at least 15 per cent annually.
In November 2020, Meghalaya Power Distribution Corporation Limited invited EoIs for the development of 10 MW of solar projects under Component A of the PM-KUSUM programme. Developers were required to procure barren land and the necessary infrastructure, and facilitate connectivity from 33/11 kV substations. Grid-connected or stilt-mounted projects were also to be set up with capacities ranging between 500 kW and 2 MW.
Finally, in September 2020, Central Electronics Limited issued a tender for setting up 1,707 solar pumps under Component C of the PM-KUSUM scheme. The pumps will be installed under Jaipur’s power discom. The scope of work for the winning bidder will include design, survey, supply, installation, testing and commissioning, along with five years of comprehensive maintenance of solar PV systems, which are meant for the solarisation of grid-connected agricultural consumers.
Business models and outlook
Apart from supportive policies and capital subsidies, viable business models have contributed to the uptake of solar pumps in India. One such model is community-based solar irrigation, wherein a group of farmers form a joint liability group and buy a solar pump through a joint loan from the banks. This not only makes the pump affordable for the farmers, but also distributes the risk of payment default for the banks. Another is the shared-service model, wherein a renewable energy service company (RESCO) installs and operates a solar pump. All willing farmers in the region can then draw water using this pump by paying a minimum service charge to the RESCO. While the first model is more popular amongst larger farmers, the latter one is for marginal farmers who cannot buy a pump on their own. Further, RESCOs develop microgrids using solar pumps in certain remote regions that are still unconnected to the grid or have severely inadequate power supply. The surplus power from these microgrids can be used for lighting and other applications such as grinding and threshing. In addition, portable solar pumps are used in certain villages on a rotation basis.
Massive capital subsidies have been announced for solar pumps to reduce the upfront capital investment for farmers. However, the uptake has been quite limited vis-à-vis the actual farmer population in the country. One of the primary reasons is the lack of awareness amongst farmers in remote regions of the country. This is especially the case for marginal farmers, who might not have heard of such schemes. Even if they have, they might lack the means or knowledge to benefit from such programmes. Securing finance is a major issue for such farmers, as banks might hesitate in giving loans to them. In addition, lack of technical knowledge regarding operating a solar pump might create doubts in the minds even of more prosperous farmers.
These challenges, although small, need to be addressed urgently to increase the adoption of solar pumps across the country. Local governments, industries and grassroots-level organisations need to work together to create awareness amongst farmers, especially in remote regions. Farmers can be educated about the various benefits of solar pumping systems and given the basic technical knowledge to operate such systems, removing any fears regarding lack of expertise. In addition, they should be schooled on conserving ground water. Further, lending communities need to be sensitised, and attractive, uncomplicated financing schemes need to be developed for local lenders as well as farmers in villages. Already, local discoms have started issuing tenders for implementing large solar irrigation programmes, and this will help them in load management and reduce their financial burdens.
Going forward, political will, capacity building and awareness generation will be the key factors that would help realise the full benefits of government policies and business models for promoting solar pumps.