Promising Trends

Progress and challenges in the solar pump industry

The Government of India has set an ambitious target to install 500 GW of non-fossil fuel-based energy capacity by 2030. A significant proportion of this target is expected to be met by solar pow­er installations. While utility-scale solar po­w­er projects have grown rapidly, the distributed solar segment has seen a relatively slower pace of growth. However, investments in the distributed segment are rising as the country advances towards its cl­e­an energy targets. The government aims to install 2 million off-grid and 0.75 million grid-connected agricultural solar pumps by 2023. As per a Bridge to India report, the total number of solar pumps installed as of April 2022 was 357,496, leaving im­mense scope for more rapid deployment of solar pumps in the country.

Solar water pumps are crucial for agricultural applications as the agricultural sector alone accounts for roughly 18 per cent of India’s electricity consumption. Solar pum­ps can help reduce farmers’ dependence on grid electricity, which is often unreliable and erratic, as well as on diesel-based pu­mps. The reduced dependence on die­sel in the long run will help reduce India’s foreign exports. Promo­ting solar-powered pumps is an effective way to not only meet India’s carbon targets, but also to create opportunities for livelihood and diversify incomes in rural areas.

Renewable Watch highlights the technologies, progress, trends and challenges in the Indian solar pump market…

Pump technologies

Solar water pumping systems operate us­ing three primary components – solar mo­du­les, solar pumps, and solar pumping inverters. Solar modules convert solar po­wer into electricity, which is utilised by the inverters to convert DC into AC to po­wer the solar pumps. These systems primarily utilise two types of pump technologies – surface pumps and submersible pumps. Surface water pumps are ideal for generating a higher flow rate in water so­urces that are easily accessible and not great in depth. Submersible pumps are more common in the market and are ins­talled underground to pump water from de­ep wells and borewells to the surface. Other technologies such as floating pum­ps are also coming up to enable easier in­stallation in certain regions as well as to make the pumping process more efficient.

There are various factors that need to be considered while choosing from the various solar pump technologies. The type of water source and its depth are the key de­ter­minants. The quality of water and sedimentation level, locational factors that determine the weather and the water levels in the region are also important parameters that need to be considered before choosing the technology. The choice of pump size must be made keeping in mind the water table levels as bigger pumps may have the potential to deplete the water table while smaller pumps may not be effective in deeper waterbodies.

Progress under PM-KUSUM

The government launched the Pradhan Mantri Kisan Urja Suraksha Evam Utth­a­an Mahabhiyan (PM-KUSUM) in 2019 with the aim to install solar and other re­newable energy capacity amounting to 25,750 MW by 2022. The scheme entails an investment of Rs 344 billion by the ce­ntral government, including service char­ges to the implementing agencies. The scheme consists of three components, of which two focus on solar-powered agricultural pumps. Component B of the sc­he­me aims to install 1.7 million standalone solar-powered agricultural pumps with a capacity of up to 7.5 HP each by December 2022.

According to data from Ministry of New and Renewable Energy (MNRE) as of May 2022, a total of 361,462 standalone solar pumps have been sanctioned under the sc­heme, of which about 30 per cent or 111,697 pumps have been installed. In terms of state-wise progress under Com­ponent B, Maharashtra has been sanctioned the highest number of solar pumps at 100,000, of which merely 2.5 per cent or 2,595 pumps have been installed. Ra­ja­sthan is in the second place in terms of number of pumps sanctioned. The state has installed 40,081 pumps, which acc­o­unt, for 61.6 per cent of the total allocation of 65,000 pumps. Madhya Pradesh has installed 7,234 pumps (13 per cent) of the 57,000 pumps allocated under the sche­me. Arunachal Pradesh and Naga­la­nd ha­ve been allocated the least number of pu­mps at 50 each, while Kerala and Mani­pur have been sanctioned 100 and 150 pu­mps respectively. In terms of ins­talla­tion, Rajas­than is in the lead, followed by Har­yana with 35,040 out of 37,000 sanctioned pumps installed and Punjab with 9,074 out of 12,000 sanctioned pum­ps installed. Madh­ya Pradesh, Uttar Pra­de­­sh and Jharkhand have also installed so­me pu­mps. States/ UTs such as Andhra Pra­desh, Telangana, West Bengal, Delhi and Pudu­cherry have not been sanctio­ned any pu­mps, whereas Arunachal Pra­de­sh, Assam, Chhattisgarh, Kerala, Mizo­ram and Naga­land have not installed any pumps till date.

Component C of the scheme aims to so­larise 1 million grid-connected agricul­tu­ral pumps of individual pump capacity up to 7.5 HP. As of May 2022, a total of 76,150 individual solar pumps have been sanctioned under Component C, of which only 1,047 have been installed. These in­clu­de 1,026 individual pumps in Rajas­than and 21 in Kerala.

Recent developments

The solar pumps segment has witnessed significant developments in recent mon­ths owing to the government’s focus on clean energy transition. In June 2022, Re­New Power partnered with the United Na­tions Environment Programme and the Self-Employed Women’s Association of India to train 1,000 low-income women salt-pan workers to work under the Project Surya initiative at Dhokavada village in Patan district of Gujarat. Under the pro­gramme, women salt-pan workers who work in the challenging and extreme temperatures in the Rann of Kutch marshes will be trained as solar panel and solar-pump technicians. The initiative displays the huge potential of the solar pump segment to make the renewable energy sector more inclusive and gender-equal.

In March 2022, the Karnataka state cabinet approved the proposal to execute PM-KUSUM in the state, with a target to provide solar-powered irrigation pump sets to roughly 10,000 farmers. As per the sche­me, the central government and the Kar­nataka government will each bear 30 per cent of the cost, while the remaining 40 per cent will be borne by the farm­ers. Recently, in some states such as Haryana, the governments have introdu­ced an additional top-up on subsidies, reducing the farmers’ overall share in the cost to almost 25 per cent. In January 2022, the Karnataka Vikas Grameen Bank also signed an MoU with MECWIN Tech­no­logies Limited, a Ben­galuru-based co­m­pany, to finance the introduction of solar-powered pump sets.

Given the importance of solar pumps, es­pecially in India’s agricultural sector, rese­ar­chers and technology developers have also been focusing on the segment. In February 2022, researchers at the Indian Institute of Technology Bhubaneswar de­ve­loped and launched a solar water pu­m­ping system with the ability to move from one farm to another. The mobile solar wa­ter pumps have been developed to support small-scale farmers in remote regi­o­ns. The pumps have been deployed ac­ross various districts in Odisha including Angul, Dhenkanal, Puri, Bhadrak, Kor­put, Keonjhar, Nayagarh and Mayurbhanj. Fur­ther, in August 2021, Gautam Solar install­ed solar pumps of 7.5 HP and 10 HP ca­pacity at 1,500 different locations in Har­yana under PM-KUSUM. To facilitate solar pump financing for farmers, the Punjab National Bank (PNB) signed an MoU with the SwitchON Foundation, a West Bengal-based not-for-profit organisation, in April 2021, for setting up the first loss default guarantee fund. With the creation of the fund, PNB will provide better terms of fin­ance, while the SwitchON Fo­un­dation will focus on creating awareness among far­mers and conducting due diligence prior to the loan disbursal.

Challenges and the way forward

While the outlook for the solar pump segment in India is promising, it is not free of challenges. MNRE data suggests that pro­gress under PM-KUSUM has been rather sluggish. For instance, out of the 20,000 pumps sanctioned in Chh­att­is­ga­rh, none have been installed so far. High upfront costs, lack of financing facilities available to farmers and limited awareness regarding the scheme may be key limitations in the uptake of solar pu­mps. Since farmers have to bear 40 per ce­nt of the project cost under the scheme in most states, access to formal bank credit is crucial. Certain safety concerns al­so exist. With submersible pumps, for instance, maintenance of the power cord is crucial as it is connected underwater to the pump.

Furthermore, many big players have not been able to expand to remote regions due to the pricing method used in the solar pump industry at present. These players have not been able compete with the rates of pumps tendered by MSMEs and find it unprofitable to supply pumps at the same rates offered by MSMEs.

Moreover, with the greater deployment of pumps across the country, some environmental concerns have surfaced in the form of unsustainable groundwater extra­c­­tion. This is especially critical when farmers find it more profitable to grow additional crops rather than sell the remaining electricity back to the grid. Thus, setting an optimal tariff would be a welcome step to conserve water tables.

Going forward, solar water pumps are likely to remain an efficient, reliable and cost-effective solution for farmers, especially in grid-isolated remote regions. Therefore, co­­ordination and cooperation among stat­es, streamlining of administrative proced­u­res, greater awareness, av­ailability of fin­a­ncing options and ad­option of the right bu­si­ness models and pricing can go a long way in ensuring the rapid deployment of solar pumps in the coming years.

By Kasvi Singh

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