A farmers’ cooperative in Gujarat using solar-powered water pumps is showing the way to optimal irrigation and generating additional income by selling surplus electricity
In January 2015, the International Water Management Institute (IWMI) initiated a pilot project in Thamna, Gujarat, with just one farmer, who added a solar pump in addition to his electric water pump on his fields. This enabled him to produce 40 to 50 KWh a day. He sold his surplus power at INR 5 per KWh to the power distribution utility and earned INR 7,500 for producing 1,500 units in a span of just four months.
Subsequently, Gujarat became the first state to have a Solar Pump Irrigators’ Cooperative Enterprise (SPICE). Termed Dhundi Saur Urja Utapadak Shahakari Mandali (DSUUM), it is one of the first instances where farmers are selling surplus power to the power distributor by connecting solar pumps to the grid. With an installed capacity of 56.4 KW, the co-op has entered into a 25-year power purchase agreement with the Madhya Gujarat Vij Company Ltd (MGVL) for supplying solar power at INR 4.63 per KWh.
The farmers of Dhundi co-op provided irrigation as service to 50 ha of land and at half the rate previously paid by small farmers who do not own a well. As a result, even small farmers saved on irrigation cost. Owing to the use of solar power, which replaced 2.85 tonnes of diesel consumption, 5,097 units of clean electricity were generated.
“The total benefit accrued to the cooperative is close to Rs 3 lakh and it evacuated 5,097 units in 80 days. Had this power been used for pumping, 25 million litres of groundwater would have been drafted,” Neha Durga, who works with Tushar Shah who heads the IWMI-TATA Water Policy Research Programme (ITP) in Anand, Gujarat, told indiaclimatedialogue.net.
How it unfolded
According to Omkar Jani, Principal Research Scientist (Solar Energy) at the Gujarat Energy Research and Management Institute (GERMI), similar to any other Indian state, Gujarat still has over 350,000 electricity connections to farms. Every year, the electricity company is able to connect 100,000 farmers to the grid, but at the same time, receives 80,000 fresh applications. Farmers are heavily subsidized as the government bears the cost of connecting a farmer to the grid, which is about INR 175,000 per farmer. In addition, the farmer pays a tariff of only INR 0.60 per unit in Gujarat, which is substantially lower than the actual cost of power.
Electricity companies also face the challenge of power thefts, a problem that Gujarat has successfully curbed to a great extent. Therefore, as per the conventional environment in the Indian power sector, the agriculture segment poses huge deficits in the balance sheet of any electricity company and is responsible for the ill health of such companies.
Another concern is that farmers often receive power at odd times, like 2 am, due to staggering. Power supply is staggered because of the larger intention of ensuring reliable supply to each farmer on the grid. However, such timings are not only inconvenient, but the farmers also tend to inefficiently use power and water at odd hours.
The new model
The model that IWMI came up with was one where power would not only be saved, but the farmers would also get paid for saving power. Moreover, since solar power is readily available during the day, power supply during the day would not be a problem at all. Even the utility is neutral to buying solar power from farmers because they need to buy power from larger companies anyways to meet their solar purchase obligations.
IWMI substantially contributed to the capital cost from its R&D funds, which not only included the distributed solar plants in the farms of each participating farmer, but also the electric cables and associated electric equipment up to interfacing with the existing electricity grid, says Jani.
The IWMI estimates that currently, around 11 million farmers in India are connected to the electricity grid and they could, in principle, install solar-powered water pumps and sell the surplus energy they produce.
Neha explains that ITP has been working on the energy-irrigation nexus in South Asia for the last one and a half decade. “The intricate relationship between financial health of energy utilities and farm power requirement were well researched. In 2012, when the solar discussion was gearing up and the prices of panels were falling very fast making it affordable, ITP was able to utilize its wisdom about energy-irrigation in the context of solar panels and understood the potential of solar pumps to revolutionize the way agriculture is done in India. ITP believes that solar pumps will bring about the much needed breakthrough in agriculture.”
Research reveals that the use of solar pumps in irrigation is gaining ground. A study, titled Harvesting Solar Power in India, by Ashok Gulati, Stuti Manchanda and Rakesh Kacker states, “By the end of 2014-15, around 19,500 solar pumps were installed in India as part of decentralized/off grid initiatives. In 2015-16 alone, 31,472 solar pumps were installed, which is greater than the cumulative number so far.”
Need for right policy
Even as studies prove that solar pumps are suitable for agrarian practices in India, support at the decision making level is equally important. Neha believes that the right policy framework is needed to promote solar pumps. “As of now, they are promoted by high capital subsidy on one pump. This limits the size and the number of pumps which can reach the ground. Instead, a good credit linked model is required for reducing the subsidy per pump.”
“Co-operatives of 40 to 50 such solar pump owners should be formed in each village so as to pool their power and evacuate power to the grid. Solar irrigation pumps do not require much land, as they are mounted at a height and do not hinder crop productivity,” Tushar Shah told indiaclimatedialogue.net.
In a circular dated May 21, 2016, the Ministry of New and Renewable Energy asked banks to follow the example of Syndicate Bank and waive off additional collateral of land (for loans amounting INR 200,000 to INR 500,000) to encourage more farmers to avail loans for solar pumps. “It would be important to organize the farmers into cooperatives as seen in the case of Gujarat or Farmer Producer Organisations. With monitored and effective implementation, this innovation can become a boon for the agriculture and power sector of the country,” it adds.
ITP has been suggesting that high capital subsidy be replaced by a mix of capital subsidy, which shall be much lower than the current percentage, and a remunerative feed-in-tariff be paid to the farmers for selling surplus power to the local utility. It also mooted the concept of Solar Power as Remunerative Crop (SPaRC) in 2012. Essentially, it considers solar power as a crop, which does not require any fertilizer or other inputs, is drought-proof and free from pest attack.
Neha adds that unlike megawatt plants or rooftop solar plants, micro-grids such as the ones for Solar Pump Irrigators’ Cooperative Enterprise are a better proposition. “SPaRC’s aim is to mainstream this idea in the national debate on process of solarization which has completely ignored this space.”
Meanwhile, Dhundi’s success has ensured a stream of visitors from afar. “Recently, 35 people from Kerala, including farmers and government officials visited Dhundi. Also, five representatives from farmers’ bodies in Bhavnagar, Gujarat, came to see how this could be useful for them. Development professionals from Switzerland, who wanted to see how solar pumps are being used, were here too,” Neha told indiaclimatedialogue.net.
Jani believes that a lot of other states would like to copy paste this model since it is good. “Since it is a win-win situation economically for all, it has been accepted very fast.”
The IWMI has made presentations to the chief ministers of Chhattisgarh and Jharkhand on the solar model and pitched ideas to the Maharashtra government.
GERMI on the other hand, is working with the Energy and Petrochemicals Department of Gujarat with the aim of replicating this model. “We are trying to work on a good financial model. The aim is to get developers, who act as a catalyst between the farmers and the power company. So, the distribution company will only have to deal only with a developer. The developer will invest the money, provide power to the farmer and in turn, make his money,” explains Jani.
According to him, the Dhundi model is substantially subsidized owing to the fact that it was a pilot. “Any model dependent heavily on subsidies is not scalable. But, we are working on tweaking the financial model, optimizing between subsidies, investments, returns and benefits. Fortunately, the preliminary numbers are very encouraging, and we are sure that we will be successful in developing a very healthy and replicable model.”