Solar pump scheme needs serious relook

By: |
August 14, 2019 1:09 AM

Renewable energy is clean energy, but it doesn’t always lead to green solutions. For clean energy to become green, solutions must be comprehensively designed

With solar power predicted to be at least 30% cheaper, the subsidy burden is likely to reduce significantly (Representational Image)With solar power predicted to be at least 30% cheaper, the subsidy burden is likely to reduce significantly (Representational Image)

The Ministry of New and Renewable Energy (MNRE) recently rolled out a massive solar-pump programme called the PM-KUSUM scheme.

The scheme has a target to set up 25,750 megawatts (MW) solar capacity by 2022 to power irrigation pumps, with central financial support of Rs 34,422 crore. It includes installation of 1.75 million off-grid and 1 million on-grid solar pumps as well as 10,000 MW of solar capacity in rural areas through decentralised ground-mounted plants of 0.5 MW to 2 MW capacity. These plants will be used to solarise the rural grid.

Just to contextualise, 25,750 MW solar capacity can power about 11.5 million 3 HP (horsepower) pumps or 7 million 5 HP pumps. At present, nearly 30 million irrigation pumps are estimated to be operating in India, of which 21 million are electric and 9 million are diesel-based. The KUSUM scheme can potentially convert one-third to one-fourth of all irrigation pumps into solar-powered pumps in a short period of three years.

This rapid transition is possible because the scheme makes buying pumps extremely affordable for medium-sized and large farmers. With 30% subsidy from the central and state government each and provision to take bank loans for 30% of the cost, farmers have to shell out only 10% of the cost to buy solar pumps. But, what will be the implications—positive and negatives—of this rapid transition?

Let me start by acknowledging that the scheme is good to increase farmers’ income in the short term. As solar power is cheaper than diesel, in states like Bihar, where farmers largely use diesel pumps, off-grid solar pumps will reduce the cost of irrigation significantly. This will allow farmers to grow more crops, even the water-intensive ones, at a lower cost of cultivation, thereby increasing income.

In Punjab, where electric pumps dominate and the power subsidy to the agricultural sector is about `7000 crore annually, solarisation of agriculture feeders will reduce the subsidy burden significantly. Farmers’ income will also be augmented by selling electricity from solar plants on to the discoms.

The most important part of the solar pump is that the solar cycle matches the irrigation cycle. Farmers will get assured irrigation for at least six hours during day time, and they don’t have to remain awake at night to irrigate their farms (grid supply is more assured at night in most states). All in all, the scheme is good for farmers. But is it good for farmers in the long run?

Agriculture in India has become increasingly dependent on groundwater for irrigation. Nearly 90% of India’s total groundwater draft is used to irrigate 70% of the country’s total irrigated land. While this has helped increase productivity and farmer income, it has also led to massive overexploitation of aquifers. In many states, the condition of aquifers has reached a crisis point as both, the quality and quantity of groundwater are depleting at an alarming rate.

The problem of overexploitation of groundwater is driven by the availability of subsidised—often free—power for irrigation, which creates little incentives to use power or water efficiently. Indeed, states like Punjab, Haryana, Tamil Nadu, etc, with very low tariffs for agriculture, have the highest share of semi-critical, critical and overexploited aquifers. The states are today shelling out around Rs 50,000 crore every year as electricity subsidy for agriculture. This is unsustainable in every aspect, including the long-term future of farmers and food security of the country.

The World Bank predicts that around 60% of the aquifers in India will be in a critical state by 2032 if we do not change the current practice of overexploitation of groundwater for irrigation. Large-scale deployment of solar pumps, without a comprehensive plan to monitor and control water usage, is likely to make this prediction a reality. Let me explain.

When a farmer uses a diesel pump, he is mindful of the cost of diesel and hence not likely to run the pump more than what is required to irrigate his land. There is, therefore, an inbuilt cost factor in diesel pumps that restricts wasteful use of water. These diesel pumps will be replaced by the far cheaper off-grid solar pumps, with no running expenses. There is, therefore, a high possibility of overuse of these pumps, leading to groundwater depletion. The KUSUM scheme has also not provided any provision to utilise surplus power from off-grid pumps to light rural homes and businesses. This means that these systems will only be used to pump water and hence the high probability of overexploitation of groundwater.

In the case of solarisation of agriculture feeders, the implications can be even more disastrous. Currently, states like Punjab and Haryana bear a huge burden of agriculture power subsidy. With solar power predicted to be at least 30% cheaper, the subsidy burden is likely to reduce significantly. This means that the state governments have even less incentive to increase agriculture tariff to conserve water when the grid is solarised. Thus, the gross overexploitation of groundwater is likely to continue.

Overall, the KUSUM scheme fails to promote efficient irrigation and incorporate explicit and strict measures against groundwater exploitation. The scheme only mentions exploring the possibility of its convergence with state-level schemes for promoting the micro-irrigation systems and energy-efficient pumps instead of mandating the same.

But it is very much possible to increase the use of solar energy for irrigation, reduce groundwater exploitation and help small and marginal farmers. For this, the KUSUM scheme will have to be redesigned and positioned as a water and agricultural scheme, and not merely as a renewable-energy scheme.Here are a few points to consider to improve the design of the scheme.

One, the central government could push massive irrigation reforms in states through this scheme. For instance, KUSUM should only be extended to states willing to take strong measures to improve irrigation efficiency and control exploitation of groundwater.

Two, it must mandate micro-irrigation for solar pump beneficiaries. Groundwater extraction must be closely monitored and strict mandates on pump size and bore-well depth must be set. Supporting low water-intensive crops in water-scare regions, too, is crucial.

Three, deployment of off-grid solar pumps must be restricted to areas where the grid has not reached and groundwater is abundant. Even in groundwater-abundant areas, off-grid solar pumps must be used for rural electrification or developed into community-based water sale models to maximise utilisation and reduce water wastage.

Four, solarisation of rural feeders should be the preferred solution, given that it is most economical and provides additional income to farmers. However, this should be accompanied by a gradual increase in electricity tariffs, which is crucial to control groundwater exploitation and reduce the burden of agricultural subsidy.

Last, given the central role of discoms, electricity regulators need to ensure that solar pumps and decentralised plants are allowed to evacuate power to the grids easily and payments are made to the farmers regularly.

Renewable energy is clean energy, but it doesn’t always lead to green solutions. For clean energy to become green, solutions must be comprehensively designed in an integrated manner.

The author is Deputy director-general, CSE
Twitter: @Bh_Chandra
Views are personal

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Need procurement reforms
2Fixing the data economy, and economic inequality
3Making competition drive a consumer-centric power system