Obstacles: Political loopholes, lack of low-cost credit hit agricultural solar projects
By Prabhudatta Mishra and Anupam Chatterjee
According to analysts, farmers could earn a tidy sum – an additional Rs 15 to 20 lakh per year for one hectare of land – from unconventional uses of the land like solar power generation without disrupting farming activities. This is up to three times what they currently earn from this farm operation alone.
While this means that it is indeed possible to double the income of farmers within a few years, political loopholes and the lack of low-cost credit facilities hamper the ambitious project. An exclusive government program put in place two years ago to encourage such ventures has been of little help.
Installing solar panels is capital intensive; it is estimated that around Rs 50 lakh is needed to erect the signs on an acre of land. For a large majority of the country’s farmers, such a cost is hardly affordable.
So, despite the proposed subsidies, only a few projects have been developed so far and even these have simply enabled farmers to obtain rental income of a few thousand rupees per year from solar developers.
Since 2.2 hectares of land is enough to produce 1 megawatt (MW) of agro-voltaics – a term used to refer to the co-development of the same area of ââland for both solar PV and agriculture – a massive amount of solar power – 629.69 gigawatts (GW) – could be generated from the country’s net seeded area of ââ140 million hectares, according to a report by the National Solar Energy Federation of the India (NSEFI) published in May. The potential for agro-voltaics is 49.50 GW and 56.6 GW of fallow land and other uncultivated land, respectively, according to the report.
About fifteen pilots have been in operation so far. Some states have also initiated the registration process to assess farmers’ interests in the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-Kusum) program, unveiled in February 2019 to catalyze the process. The government also relaxed guidelines for setting up solar power plants on farmland, allowing capacities below 500 kilowatts, meaning farmers with small farms could start businesses.
As India has 85% of marginal smallholder farmers out of a total of 14.5 crore of landowning cultivators, solar power could potentially be the easiest way to increase their income, said OP Yadav, director of the Central Arid Zone Research Institute (Cazri) based in Jodhpur. The institute ordered a 105 kilowatt solar power plant in 2017 on its campus with an investment of around Rs 55 lakh in an acre of land where agriculture continues on two-thirds of the area. It is, according to Cazri, the perfect model for small and marginal farmers.
The PM-Kusum program aims to install 10 GW of solar power plants on farmland, install 17.5 lakh agricultural solar pumps and connect agricultural electricity distributors to solar power to ensure that only clean energy is used for irrigation. Total program expenditure is set at Rs 1.2 lakh crore with central financial support of Rs 34,422 crore. State governments could provide a 30% subsidy and the remaining 40% would have to be provided by the farmer.
In addition to providing an additional source of income for farmers through the sale of surplus electricity from their solar power plants to state-run electricity distribution companies, the PM-Kusum program aims to reduce the burden of subsidizing farmers. States by reducing the amount of electricity to be supplied. for watering.
Solar power plants can even be erected on agricultural land without hampering mechanized agriculture. âOur solar power plant is raised to a height of about 3.5 meters, which allows for regular farming activities and even mechanized farming on tractors,â said Sharavan Sampath, CEO of Oakridge Energy. Sampath’s company developed a 110 kilowatt solar unit on an elevated structure on farmland on the outskirts of Delhi as part of the state government‘s Mukhyamantri Kisan Aay Badhotri Solar Yojana program. “The farmer earns an average rental income of Rs 50,000 to Rs 70,000 per acre, in addition to his basic income from farming,” Sampath added.
âAbout 1.5-2.5 acres are needed to build 500 kilowatt solar units on farmland and on an approximate basis, about 4 units of electricity are generated per kilowatt per day,â said Subrahmanyam Pulipaka, CEO by NSEFI. âThe expenditure for building solar units on farmland is also relatively higher due to smaller capacities, and the cost of building a 500 kilowatt power plant is more than Rs 1 crore and the cost will be 10 to 12% higher if the panels are installed on elevated structures, âPulipaka added.
However, making credit available from banks at a cheaper interest rate and facilitating grid connectivity are two major demands of farmers interested in solar farming. âEven if the government grants a 60% subsidy (Center 30% and Government of Rajasthan 30%), it will still be difficult to make the required investment. Unless the banks lend 30-35% of our land, we will not be able to generate funds on our own, âsaid Hariram Baswana from Budi Arjunpura village in Nagaur district in Rajasthan. If the banks are ready, at least 15 to 20 farmers in his village are ready to install solar power plants, added Baswana.
Unfortunately, due to the unavailability of credit, farmers are forced to lease their land at very low rates of 50,000 / acre to any developer, said Bhagirath Choudhary of the South Asia Biotechnology Center. The PM-Kusum guidelines also facilitate this as they state: âIf farmers / farmer groups / cooperatives / panchayats / agricultural producer organizations (OPF) are not able to organize the required equity capital for the implementation instead of the renewable energy project (REPP), they can opt for the development of the REPP via the developer (s) or even via local DISCOM. Choudhary said: âThe solar farm is a revolutionary approach to generate additional income for small farmers. States must develop a viable bridge platform to connect the solar farm to the electricity grid. “
The NSEFI report suggested that a specific conversion of temporary agrivoltaic lands or some other mechanism should be found to prevent agricultural land used for agro-voltaics from being governed by regulations on non-agricultural land use. It also recommended that a minimum of 80% of the total area be available and used for agricultural purposes.