Solar energy is being explored as an alternative to conventional grid electricity for powering irrigation. Interventions that utilize solar energy for irrigation can contribute to renewable energy generation goals, stabilize demand of grid electricity, and provide electricity to unelectrified regions while reducing long-term infrastructure costs. In India, solar energy is also viewed as a potentially more reliable energy source than the electrical grid, which tends to experience frequent power cuts and poor daytime supply due to excessive demand and load shedding. With a solar-powered irrigation system, a farmer may have access to reliable

Executive Summary: Solar systems for irrigation may provide reliable, renewable energy for

pumping water. In 2015, the Maharashtra Department of Energy initiated a 7,540 solar-powered pump pilot scheme. This report analyzes the economics and feasibility of the Maharashtra programme, and extrapolates these findings to other models of solar systems for irrigation.

Solar Irrigation Innovations in India: The Way Forward? By: Fernanda Diaz de la Vega, Raunak Mittal, Swati Narnaulia & Kelsey Reid

companies and rapidly depleting groundwater aquifers.

Solar Energy for Irrigation

Water, Food, & Energy Nexus

The International Innovation Corps (IIC) is a year-long fellowship hosted by the Harris School of Public Policy, University of Chicago in collaboration with USAID that places Indian and UChicago alumni professionals into Indian public sector institutions for developing scalable solutions to social problems. This team of IIC fellows, supported by Tata Trusts, partnered with the Energy Policy Institute at Chicago - India (EPIC). The IIC - EPIC team worked closely with the Department of Energy, Government of Maharashtra in exploring, researching, and proposing innovative solutions to some of the long-standing energy problems in the state. The team concentrated the majority of their efforts on the Solar Water Pump Pilot Programme, for which the tender was released in January 2015 and implementation began in May 2016 after an administrative delay. Therefore, the majority of the team’s analysis was conducted pre-implementation.

Footnotes: 1 IDFC Foundation. (2013). Indian Development Rural Report. New Delhi: Orient Blackswan. 2 Kulkarni, H., Shah, M., & P.S.VijayShankar. (2015). Shaping the contours of groundwater governance in India. Journal of Hydrology: Regional Studies, 172-192. 3 According to MahaDiscom the agricultural subsidy is around 1,000 Crores rupees per year.

India is an agrarian economy and irrigation consumes 80% of the country’s extracted groundwater resources.1 After independence, in its stride for food security, India instituted the “Green Revolution” which demanded intensive irrigation for high crop yields. As a result of inexpensive and evolving technologies to pump water from the ground and highly subsidised electricity for agriculture, groundwater irrigation increased exponentially. By 2015, there were more than 30 million pump systems across the country.2 This has led to a vicious nexus between energy, water, and food production, which in turn causes a significant power subsidy3 burden for the state-owned power

renewable, affordable energy during working hours that can power irrigation of their land. While many factors contribute to the potential of solar systems for irrigation, solar system for irrigation programme pilots must be evaluated further to understand the economic and environmental viability of these interventions.

districts across the state. The pumps are offered with a 95% subsidy (with funding from the state and the central government NABARD initiative), thus reducing costs for farmers. A majority of the pumps are sanctioned for severely drought stricken areas of eastern Maharashtra. In order to become a beneficiary of the programme, farmers must: i) have a landholding less than 5 acres; ii) have applied for an agricultural electrical connection; and iii) have access to a well.!

Maharashtra’s Solar Water Pump Scheme

Approach to Analysis In January 2015, the Maharashtra Department of Energy and subsidiary Maharashtra State Electricity Distribution Company Limited (MSEDCL) announced plans for pilot scheme of 7,540 off-grid solar water pumps of irrigation installed in 14

The following analysis is based on secondary research, economic modeling, key informant interviews with industry leaders and

A solar panel powering a pump in Jaipur district under Rajasthan’s solar water pump scheme. Photo: Swati Narnaulia

Solar-Powered Irrigation Schemes in India

Karnataka, 20141

• 250 pumps • on-grid, one feeder • 90% subsidy

Rajasthan, 20102

• 15,000 pumps by 2014, 1 Lakh by 2018

• off-grid • 80% subsidy • 3 HP pump systems paired with

micro-irrigation

Footnotes: 1 Shah, Tushaar, Verma, Shilp and Neha Durga. (2014). “Karnataka’s Smart, New Solar Pump Policy for Irrigation.” Economic & Political Weekly. 2 Goyal, Dinesh Kumar. (2013). Rajasthan Solar Water Pump Programme. Akshay Urja.

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A farmer in Amravati district, Maharashtra explains his irrigation practices during a farmer meeting. Photo: Kelsey Reid

researchers, and surveys of farmers. Per-farmer costs to the government were calculated for three interventions (solar water pump, energy efficient pump, and standard electrical pump) based on site conditions such as landholding, crop, groundwater, etc. The findings are also informed by surveys of farmers in Maharashtra’s Akola, Amravati, Palghar, and Yavatmal districts, and solar pump users in Rajasthan’s Jaipur district. These farmers provided insights on irrigation practices and the pilot scheme. The Maharashtra programme was analysed for three assumptions of what makes solar systems for irrigation programmes viable and sustainable:

• The intervention should minimize costs for the government relative to alternative interventions,

• The programme should have positive effects on rural livelihoods; and

• The intervention should enforce disciplined use of groundwater.

Findings

The intervention should minimize costs for the government relative to alternative interventions.

The cost-effectiveness of interventions varies based on site conditions. In terms of costs to the government, it is less costly to provide a solar water pump to farmers who do not have agricultural electrical connections than to extend the electrical grid to them. These savings are augmented when cost calculations take into account how having a pump may change farmers’ behaviour in terms of cropping patterns. With a reliable source of energy to pump water, a farmer may decide to increase their cropping cycles or begin to harvest a more water intensive crop. Programme beneficiaries lack electrical connections; therefore the scheme provides a less costly alternative to extending the grid to these farmers. The programme should have posit ive effects on rural l ivelihoods. The programme has the potential to positively impact farmers’ incomes. Solar water pumps are a reliable source of energy for irrigation, and more consistent access to water could result in higher yields and increased incomes. Furthermore, farmers will have greater access to water using a solar-powered pump than their access if they rely on rainwater or have to pay the high

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Case Study: Farmers in Yavatmal The following is a case study of costs for the government of energy and irrigation interventions. The interventions evaluated include an electrical pump with full electricity subsidy, an energy efficient pump with full electricity subsidy, and a solar-power water pump subsidized as they are under the Maharashtra pilot programme.

The first case is a farmer in Yavatmal district with 3 acres of land who cultivates cotton using a 5 HP electrical pump. Assuming the farmer uses his pump for 5 hours a day during 5 months of the year, it is most cost-effective for the government to replace his standard electrical pump with an energy efficient pump. Figure 1 compares the net present value (NPV) for ten years of running the pump at this frequency for each potential intervention. Figure 1 . Cost to the government, farmer with agricultural electricity connection

Another farmer in Yavatmal with 4 acres of land cultivating soya bean and irrigating with rainwater (which provides water for 3 months a year) would require a 3 HP pump. The most cost-effective intervention the government could make for this farmer would be an energy efficient pump (Figure 2a). However, this result is driven by the fact that soya bean is not a water-intensive crop. Once a farmer switches from rain-fed irrigation to a pump, he may chose to harvest a more water-intensive crop or plant for more than one cycle. Given such a behavioural change, the farmer may now need to run his pump for more than 3 months a year. To allow comparison between this farmer and the farmer

described above, it has been assumed that the farmer would run the pump for 5 months of the year. If this is the case, a solar water pump is the most cost-effective intervention. Providing an electrical pump to a farmer with this frequency of use would result in the government assuming the costs of providing his subsidized electricity (Figure 2b). Figure 2a. Cost to the government, farmer without an agricultural electricity connection

Source: Economic Model

Source: Economic Model

Source: Economic Model

Figure 2b. Cost to the government, farmer without an agricultural electricity connection; taking into account estimated behavioural changes crops and cropping patterns

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Farmer Apprehensions

Farmers surveyed in Akola, Amravati, Palghar, and Yavatmal districts expressed the following concerns about the Maharashtra pilot. These factors negatively affect beneficiary buy-in and programme participation.

• Some farmers lack reliable and consistent access to water that could be used for pumping.

• They do not have a technology bias

and have a strong preference for whichever pump system they can receive sooner, whether electrical or solar.

• The economic burden of the down

payment would be lesser if beneficiaries could pay in installments.

• Farmers rely heavily on community

organizations, producer companies, and farmer cooperatives for market linkages, technical training, and other interventions that improve livelihoods.

• They are unfamiliar with the

technology and are unsure of its efficiency, particularly on cloudy days, without having seen a pump in operation.

Programme Recommendations

In order to align with the three factors for a successful programme defined in the section above and to address the concerns expressed by the farmers there are actions that MSEDCL can take without having to modify the tender. To increase buy-in and familiarize farmers with the technology, the pump suppliers may:

• Use communication methods that are easy and inexpensive to disseminate;

• Identify local anchor farmers with solar pumps who can highlight benefits of the system

• Coordinate with interventions under linked government programs, i.e. Dhadak Sinchan Yojna, to ensure access to water; and

operational costs of a diesel pump. With greater access to water throughout the year, farmers may be able to harvest more than one crop each year. However, unless farmers are properly linked to viable and larger markets the scheme may not positively affect rural livelihoods. The intervention should enforce disciplined use of groundwater. The pilot does not have adequate structures and incentives in place to ensure efficient and disciplined use of groundwater. Uninterrupted access to electricity for six to eight hours a day may increase the rate of groundwater extraction and surpass the rate of recharge. One example of how to enforce this can be found on the case of Rajasthan, where micro-irrigation technologies were a requirement for beneficiaries because they reduce water consumption.

• Forge partnerships with existing community organisations to align the intervention with other rural livelihood initiatives.

The case of the Maharashtra pilot offers lessons about solar systems across India. Though this scheme only entails off-grid systems under individual ownership, the analysis of costs to government and perspectives from farmers provide valuable insights relevant to designing and

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Way Forward for Solar Systems for Irrigation

While the Maharashtra pilot will provide some insights on the viability of solar systems for irrigation, it also incites policy questions that will need to be further explored through evaluations of other systems with various models of ownership

Alternative Models

Co-author Raunak Mittal notes solar panel system specifications in Jaipur district, Rajasthan. Photo: Kelsey Reid

implementing a variety of solar system for irrigation interventions: Engage existing community organisations to enhance information dissemination: Farmer cooperatives and producer companies have regular contact with farmers, understand farmers’ needs and behaviors, and are a resource for market linkages and technologies. They can educate farmers about the scheme and provide support on utilizing the systems effectively. Consider making mandatory micro-irr igation technologies and water harvesting schemes: Micro-irrigation technologies lower water consumption by efficiently distributing water directly to crops. Water harvesting programmes can offset reliance on groundwater. Requiring farmers to employ these interventions may aid in efforts to reduce the rate of groundwater depletion.

Financial and technical models of solar systems for irrigation other than those implemented in the Maharashtra pilot may

be better suited to address the aforementioned criteria for a viable intervention. One alternative is on-grid solar systems, which allow farmers to sell excess units of electricity (beyond what they use for pumping) generated by the solar panels, to the electricity distribution company to be utilized on the conventional grid. This model may introduce discipline into groundwater use because farmers may value the income they can earn for excess energy units more than they value excess water. In terms of costs to government, on-grid systems are most appropriate for electrified regions and areas where the costs to extended the line are minimal. The energy sold back to the grid would counter the costs of the solar system, which may enable a lower subsidy and farmer contribution.

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and technology. It remains unclear what economic and technical mechanisms can be instituted in these programmes to ensure proper use of groundwater. Off-grid and individually owned solar-powered pumps do not institute a marginal cost for excessive water extraction, and could contribute to increased depletion of an already limited groundwater supply. Further research is needed on the conditions best suited for on-grid solar systems, particularly given how these schemes may incentivize efficient use of groundwater. As solar systems for irrigation proceed, it will also be necessary to track whether they adequately reduce the subsidy burden and financial distress of the state distribution

Farmers in Akola district read the application form for Maharashtra’s solar-powered pump pilot scheme.

Photo: Kelsey Reid

companies. The economics of these systems for both the government and farmers must be investigated for both on-grid and off-grid systems and various ownership models. Determining appropriate financial contributions from farmers and energy unit purchasing rates (in on-grid schemes) will be essential to the success and sustainability of these interventions. Finally, more should be done to understand how community organizations and local government institutions could help to introduce these new technologies to farmers. Situating these interventions in broader efforts to positively affect rural livelihoods may augment the social impact and economic gains for programme beneficiaries.

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