This post originally appeared on the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) and has been reposted here with kind permission by the author.
It was a moment of validation for the scientific community when the recent Union Budget (2018) of India brought to light a new scheme called Kisan Urja Suraksha Evam Utthaan Mahaabhiyan (KUSUM), for promoting solar farming. With an allocation of USD 21.8 billion, the government plans to start building 10,000 MW solar plants on barren lands, providing 1.75 million off-grid agricultural solar pumps. Through the scheme, farmers’ income levels are projected to see a sharp rise as they will be given an option to sell surplus power generated to the local power distribution companies (DISCOM).
The announcement has brought in a sense of jubilance for researchers at the International Water Management Institute (IWMI) and the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) who, with support from Tata Trust and the CGIAR Research Program on Water, Land and Ecosystems (WLE), set up the first ever solar pump irrigator’s cooperative in Dhundi Village of Gujarat. This climate-smart initiative has been a novel intervention in the sense of the approach of farmer led and owned ‘cooperatives’. Since its inception in 2015, it has been hailed by stakeholders, especially the state policymakers as a model of reference to be scaled for attaining multiple benefits of income growth, regularization of power, sustainable ground water use and de-dieselising of agriculture leading to a curb in carbon dioxide emissions.
In fact, with escalating interest in its visible impacts, the Gujarat government had felicitated the solar cooperative members with a certificate of appreciation awarded to the same, by the Chief Minister of Gujarat on the occasion of Krishi Mahotsav or Agriculture Festival in 2016. In the following year, the site was visited by representatives from the Ministry of New and Renewable Energy of the government of India.
Taking account of the mounting interest of policymakers in the model, we engaged in a dialogue with the Finance Minister during pre-budget consultations with experts in the agriculture sector, to elaborate on the benefits of this model on scaling. The Dhundi model was also presented to the Prime Minister in a consultation with eminent economists organized by Niti Ayog (principle policy think tank of government of India) on 10 January 2018. Such efforts have come full circle with the Finance Minister of India announcing during the budget session:
“Many farmers are installing solar water pumps to irrigate their fields... government of India will take necessary measures and encourage state governments to put in place a mechanism that their surplus solar power is purchased by the distribution companies or licensees at reasonably remunerative rates.”
De-coding solar power as a remunerative crop
Climate-smart agriculture (CSA) as a concept envisions the creation and implementation of innovative models for attaining multiple benefits and resilience not just for the farming community but a wide range of stakeholders. The innovation in the given case can be gauged from the epithet for the model itself, SPaRC - Solar Power as Remunerative crop, since the power from the sun is fetching not just economic dividends for the farmers but also helping create a sustainable business model on the whole.
With an aim of promoting climate-smartness in farm irrigation systems, SPICE - Solar Pump Irrigators’ Cooperative was brought to being with 6 smallholder farmers organized into a platform and offered 7.5-10.8 kWp (Kilo-watt-peak) capacity solar irrigation pumps which were connected to each other in a micro-grid. The cooperative members provided around 5% of the capital cost of the solar panels, pumps and micro grid with the rest being subsidized by the project.
Further, a 25-year power purchase agreement was drawn with the local electricity utility i.e. the Madhya Gujarat Vij Company Limited (MGVCL). The latter offered the cooperative a feed-in-tariff of USD 0.07/kWh (kilo-watt-hour) for evacuating their surplus solar power to the electricity grid. This tariff is supplemented from IWMI-Tata funds by IWMI-CCAFS with an additional USD 0.02/kWh ‘Green Energy Bonus’ and USD 0.02/kWh ‘Groundwater Conservation Bonus’, taking the total tariff up to USD 0.11/kWh.
Achieving a metamorphosis
Treating solar power as a remunerative crop and crafting a resultant, sustainable business model began to rapidly transform the scenario around Dhundi with the most direct bearing on the very lives of the 6 farmers in the cooperative. By early 2016, nearly 48,000 kWh of surplus power was sold to the MGVCL, earning the farmers an additional income of around USD 5, 300. As benefits became clear, three more farmers joined the cooperative contributing USD 390/kWp upfront, five times more than what the first six members had contributed. Even more farmers wanted to join but the contract with MGVCL capped total capacity of Dhundi SPICE at 100 kWp. Since the inception of the first sale in May 2016, the total units of surplus power sold till date stands at approximately 98,000 kWh and is slated to cross the 100,000 margin very soon. In fact, in January 2018 alone, one of the members sold 4,300 units of power from his farm alone, thus, generating an additional income of around USD 470 for himself.
On the other side of the benefit spectrum lies the DISCOMS and the government itself that are being liberated from the debilitating farm power subsidies. In a scenario of farmers having access to grid power connectivity the DISCOM would be obliged to provide not just a hefty subsidy but also bear the additional costs involving infrastructure installation.
Most importantly, such initiatives put to motion the attainment of the nation’s intended nationally determined contributions (INDCs) towards reducing greenhouse gas emissions. At Dhundi, carbon dioxide emissions from the site has been reduced by 56.5 tons with the replacement of diesel with a clean source of power. The bonus of the model lies in making groundwater irrigation climate-smart as the potential for selling off surplus power is promoting measured withdrawal and application of water. Further, land use has seen change wherein the farmers have installed solar panels on their fields at an elevation, thus, allowing them to cultivate shade loving crops below the panels, thereby the model reducing the land footprint of solar expansion on the whole.
Tushaar Shah, an economist and public policy specialist, is a former director of the Institute of Rural Management at Anand in India. He has also worked extensively on energy-irrigation nexus in India.