Solar: A Game Changer for India’s Agricultural Sector

Solar power is one of the most versatile forms of energy, with boundless potential, if tapped wisely. Solar can be a game changer for the agricultural sector, saving precious water resources, reducing dependency on the grid, and even becoming an additional revenue stream for farmers.

Agricultural demand for electricity is one of the largest burden on India’s power sector as irrigation systems are largely undeveloped and farmers are dependent on electricity to power their pumps. Solar can mitigate this entire portion of demand by generating power at the source and converting users into suppliers. Even if each farmer uses a small parcel of land for a solar system, it will be sufficient for their needs, all while taking the burden off DISCOM’s shoulders.

With small solar projects on farmland, farmers can save water by reducing their reliance on coal-powered electricity, reduce burdens on the grid by utilizing their own clean power, and sell the surplus back to DISCOMs. It is a win-win-win for everyone: farmers, DISCOMs and the climate.

India is expected to spend over $21 million to implement solar power equipment and solar power projects in its agricultural sector over the next few years.

First announced in the budget speech by India’s Finance Minister in early February, details of the scheme are slowly emerging now. The Indian federal government, in partnership with state governments, plans to implement large-scale solar power projects and expand implementation of solar pumps.

A large portion of the planned $21 million will go toward subsidies to farmers to set up solar power projects and install solar pumps. The government has set a target to have 10 gigawatts of solar power projects installed on barren land. The federal government, state governments, and banks (through loans) will provide a 30% subsidy each while 10% of the cost will be met by farmers themselves. 

The subsidies will also go to distribution utilities which will procure any surplus electricity generated by these solar power projects after farmers meet their own needs. Utilities will be incentivized to acquire this surplus electricity which would likely be used by them to meet their renewable purchase obligation.

Additionally, the program will also help the installation of 1.75 million solar-powered irrigation pumps at farms across the country. At present, the farmers either use diesel or grid electricity to power their irrigation pumps. Due to political and social complexities, the distribution utilities often do not get any revenue from the sales made to farmers.

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