We argue that promoting Solar Power as a Remunerative Crop (SPaRC) can help fix the perverse incentives that have frustrated groundwater demand management efforts in India.
India relies heavily on groundwater, primarily for irrigation, but also increasingly for meeting domestic and industrial water demand. The atomistic and anarchic development of groundwater since the 1970s has democratised irrigation access and lifted millions of small farmers out of poverty (Shah 2009). However, it has also spawned large and growing pockets of severe groundwater depletion and associated socio-ecological and livelihood distress. This is particularly alarming in the context of growing climate-induced uncertainties where groundwater can play an important buffering role.
Groundwater depletion in India is driven primarily by a political economy based on entrenched farm and energy policies. Farmers in arid and semi-arid regions face little or no economic water scarcity thanks to free or highly subsidized farm power supply and assured procurement prices for water intensive crops. At the same time, farmers in relatively water abundant eastern India tend to economize on water use due to limited public procurement, poor rural electricity grids and the rising cost of diesel fuel. The invidious water-energy-food nexus explains the perverse direction of virtual water trade as water-scarce India exports to water-abundant regions (Verma et al. 2009).
Agriculture accounts for nearly a fifth of India's total electricity consumption but contributes less than five percent to the utilities' revenues. Farmers get free or highly subsidized, but rationed and mostly poor-quality, power, often at inconvenient times. In response, farmers commonly deploy auto-switches and have little or no incentive to be energy- and water-efficient. Efforts to introduce efficiency have been frustrated thanks to farmers vehemently demanding – and often receiving – free farm power and assured procurement at attractive prices in return for votes. Thus, India's farm power subsidies, roughly US$ 20 billion per year, keep utilities bankrupt, farmers unhappy and groundwater depleted.
The growing popularity of solar pumps adds a new dimension to this nexus. Farmers love solar pumps as they free them from the tyranny of rationed and unreliable grid supply; electricity utilities are driven by the prospect of limiting farm power connections and subsidies; solar companies are excited by the tremendous opportunity in India's 21-million strong pump economy[i]; and climate scientists love solar pumps for their mitigation benefits.
However, indiscriminate promotion of solar pumps threatens India's groundwater aquifers. Field evidence from Rajasthan – one of India's driest states with significant groundwater depletion – shows that adoption of subsidized, stand-alone solar pumps significantly increases groundwater abstraction (Gupta 2019). This is not surprising since solar pumps offer 2200-2500 hours of reliable, unrationed, day-time power to farmers with negligible operating costs. With no other use potential, they create incentives for farmers to pump endlessly.
One way to avoid this is by incentivizing farmers not to use all the energy generated by solar panels for pumping groundwater. In 2015-16, the International Water Management Institute (IWMI) set up a small pilot in Gujarat to demonstrate SPaRC (Solar Power as Remunerative Crop). The basic idea behind SPaRC is this: farmers need power to pump groundwater to grow crops and earn income. Since energy supply to farms is free (or subsidized) and water rights are neither clearly defined nor easily enforceable, farmers will keep pumping even if the marginal returns are small. This drives groundwater over-exploitation and depletion. Instead, if farmers can also earn income from producing solar energy as a crop, this would incentivize them to use energy and groundwater efficiently.
In the field pilot, nine farmers with solar pumps were organized into the "world's first solar pump irrigators' cooperative". This cooperative entered into a 25-year power purchase agreement with the local electricity utility to sell surplus power to the grid at a fixed price. Data shows that farmers maintain baseline agricultural production and still export 2/3rds of the solar energy generated on their farms. The additional income from solar more than matches their crop income (DSUUSM 2018).
IWMI's SPaRC experiment inspired the Government of Gujarat's new solar pump policy, Suryashakti Kisan Yojana (SKY). So far, more than 4,200 farmers have been solarized with the option to sell surplus power to the grid. It is still early days for a systematic assessment of the long-term impact of SKY on agriculture, energy use and groundwater sustainability. But early analysis of SKY data shows that income from solar power sales has emerged as a driver of efficient pumping behaviour, particularly in groundwater-stressed regions (Shah and Rai 2021). At the national level, Government of India's ambitious PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan) campaign has set a target of installing 1.5 million grid-connected along with two million off-grid solar pumps over the next couple of years. This sets up a potentially significant natural experiment.
Can all solar pumps be SPaRC-enabled? Perhaps not – SPaRC requires reasonably good grid coverage and uptime, not available everywhere. Will all farmers respond uniformly to the incentives offered by SPaRC? Unlikely. Can SPaRC adoption solve all of India's groundwater over-extraction problems? Probably not. Will declining tariffs for solar energy trivialize SPaRC's incentives? Will the benefits of SPaRC be equitably distributed among rich and poor farmers; men and women; pump owners and water buyers? Will SPaRC trigger desirable behaviour changes among all farm categories across all hydro-geologies? Can the feed-in-tariff for 'solar crop' get engulfed in perverse politics? Will efficient water and energy use translate into sustainable groundwater regimes? Answers to all these questions will be clear over the next few years.
SPaRC has triggered a lot of interest among academia, policy and media. Its basic premise and assumptions have been discussed in a lively debate (Shah et al. 2017; Sahasranaman et al. 2018, 2021; Verma et al. 2019)[ii]. Meanwhile, other states are also experimenting with SPaRC variants and alternative models that claim to be more economical and rapidly scalable. SPaRC-enabled experiments have been initiated in Karnataka (Shah et al. 2014; Durga et al. 2021), Andhra Pradesh[iii], Rajasthan (World Bank 2020) and are in the works elsewhere. Maharashtra's agricultural solar feeder policy entails commissioning decentralized solar plants and is also a part of PM-KUSUM.
An external evaluation of SPaRC (Douthwaite and Shepherd 2020) has lauded its role in shaping policies and fostering an ecosystem of competition among various solarization trajectories. As the undisputed early adopter of solar irrigation – India is home to more than 93% of the world's installed solar capacity for irrigation (IRENA 2020) – India's experiments will shape, inspire and inform solarization in the rest of the world.
Shilp Verma
Senior Researcher, Water-Energy-Food Policies, IWMI: shilp.verma@cgiar.org
Photo Credit: IWMI
References
Douthwaite, B. and Shepherd, K. 2020. Outcome Evaluation of Climate-Smart Research on Solar-Powered Irrigation in India. Colombo, Sri Lanka: CGIAR Research Program on Water, Land and Ecosystems (WLE), 59p. Available online: https://wle.cgiar.org/outcome-evaluation-climate-smart-research-solar-powered-irrigation-india
DSUUSM. 2018. Tri-Annual Progress Report, 2015-18. Dhundi Saur Urja Utpadak Sahkari Mandali (DSUUSM), Dhundi Solar Energy Producers' Cooperative Society, Dhundi village, Thasra Taluka, Kheda District, Gujarat.
Durga, N., Shah, T., Verma, S. and Manjunatha, A.V. 2021.Karnataka's 'Surya Raitha' Experiment: Lessons for PM–KUSUM. Economic and Political Weekly, 56(48): 55-60.
Gupta, E. 2019. The impact of solar water pumps on energy-water-food nexus: Evidence from Rajasthan, India. Energy Policy, 129: 598-609.
IRENA 2020. Off-grid Renewable Energy Statistics 2020. International Renewable Energy Agency (IRENA), Abu Dhabi. Available online: https://www.irena.org/publications/2020/Dec/Off-grid-renewable-energy-statistics-2020
Sahasranaman, M., Kumar, M.D., Bassi, N. Singh, M. and Ganguly, A. 2018. Solar Irrigation Cooperatives: Creating the Frankenstein's Monster for India's Groundwater. Economic and Political Weekly, 53(21): 65–68.
Sahasranaman, M., Kumar, M.D., Verma, M. S., Perry, C.J., Bassi, N. and Sivamohan, M.V.K. 2021. What Will Solar Pumps Achieve? Managing Groundwater–Energy Nexus in India. Economic and Political Weekly, 56(11): 22–25
Shah, T. 2009. Taming the Anarchy: Groundwater Governance in South Asia. Washington D.C.: RFF press.
Shah, T. and Rai, G.P. 2021. Solar Pumps and Water-Energy Nexus in Gujarat, India: First Assessment of the World's Largest Pilot on Grid-connected Solar Irrigation Pumps. Preprint on Research Square. Available online: https://doi.org/10.21203/rs.3.rs-658617/v1
Shah, T., Durga, N., Rai, G.P., Verma, S. and Rathod, R. 2017. Promoting Solar Power as a Remunerative Crop. Economic and Political Weekly, 52(45): 14-19
Shah, T., Verma, S. and Durga, N. 2014.Karnataka's Smart, New Solar Pump Policy for Irrigation.Economic and Political Weekly, 49(48): 10-14
Verma, S., Durga, N. and Shah, T. 2019. Solar Irrigation Pumps and India's Energy–Irrigation Nexus. Economic and Political Weekly, 54(2): 62-65.
Verma, S., Kampman, D.A., Van der Zaag, P. and Hoekstra, A.Y. (2009). Going against the flow: A critical analysis of inter-state virtual water trade in the context of India's National River Linking Program. Physics and Chemistry of the Earth, 34 (4-5): 261-269.
World Bank. 2020. Grow Solar, Save Water, Double Farmer Income – An innovative approach to addressing Water-Energy-Agriculture nexus in Rajasthan. Washington DC: World Bank. Available online: https://openknowledge.worldbank.org/handle/10986/33375
[i] As per the most recent data (reference year 2013-14), India has 20.51 million groundwater-based minor irrigation structures (Rajan and Verma 2017).
[ii] See here: https://www.epw.in/engage/discussion/are-solar-irrigation-pumps-panacea-to-indian-agriculture-gujarat-sparc-model
[iii] https://cscportal.in/grid-connected-solar-bldc-pumpset-scheme/