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.
The program will likely reap tremendous financial gains for the power distribution utilities that are unable to generate revenue from a majority of the electricity sales made to farmers. It will also greatly reduce the use of diesel, which would further help in reducing greenhouse gas emissions as well as fuel import costs.
India will host a conference summit for the International Solar Alliance next month. According to media reports, the ISA is aggregating solar pump demand from all member nations, following which tenders will be floated to procure the pumps at the lowest cost.