Falling cost of photo voltaic (PV) cells is making solar irrigation pumps a reality in India. It is only a matter of time before governments begin aggressive promotion of solar irrigation pumps. Several players are already in the market offering a range of solar pumping solutions. This note is inspired by a field visit to some of the solar pumps installed by Claro Energy in Bihar. Its cost structure - which is high on fixed costs and low on variable costs - makes solar pumps ideal for small farmers
wanting to double up as Irrigation Service Providers (ISP) to their neighbors. Solar pumps are widely seen as an ‘energy’ solution; however, in the Indian context, they need to be viewed as a composite energy-and-water intervention that will affect both energy as well as groundwater economies. Aggressive promotion of solar pumps in groundwater abundant Eastern India has the potential to catalyze an ever-green revolution there. The same strategy in Western and Southern India, however, can increase the stress on depleted groundwater resources because solar pump owners face near-zero marginal cost of groundwater. In water-abundant Eastern India, subsidizing capital cost of solar pumps can be part of a sound promotional strategy. Elsewhere, it may be appropriate instead to connect farmers as micro-level Independent Power Producers (IPPs) to the grid and offer attractive price for buying surplus power from them.
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