Substantial Investment Subsidies for Solar Power

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Source: This post is based on the article Substantial Investment Subsidies for Solar Power” published in Down to Earth on 1st September 2021.

Relevance: Solar power’s role in addressing the issues of groundwater exploitation and DISCOM distress.

Synopsis: Substantial investment subsidies on the solar pump has the potential to address the irrigation-energy nexus in the Indian agriculture sector. Along with its potential, it is also necessary to check its viability, drawbacks etc.


The Government of India (GoI) has been promoting solar irrigation pumps (SIPs) by offering substantial investment subsidies. These SIPs promise a low carbon footprint, consistent energy availability, zero fuel costs and low operational costs.

  • The west-south corridor spanning from Punjab to Tamil Nadu has lower groundwater availability than the Ganga-Brahmaputra belt. Electric water pumps for irrigation dominate this corridor. This domination of electric water pumps led to severe depletion of the water table, along with leading to the DISCOMs crisis.
    • Farmers in this corridor also face frequent power cuts, low voltage and receive stable electricity only at night.
  • The Ganga-Brahmaputra basin in the eastern corridor is a water-rich and flood-prone area dominated by diesel water pumps.
Potential of SIPs

West-South corridor:

  • Benefit to farmers of the west-south corridor:  The west-south corridor will benefit significantly from introducing SIPs since the region has many solar hotspots and receives peak sunlight hours.
    • This ensures a regular and efficient supply of electricity to farmers.
  • It will also help relieve DISCOM’s subsidy burden from ₹30,000-35,000 per year per SIP.
  • SIPs will help move towards a zero-carbon footprint in the groundwater economy by decreasing reliability on fossil fuel-based electricity production.

Eastern corridor:

  • The recent rise in diesel prices has naturally increased the costs of irrigation. Therefore, introducing SIPs in this region may boost agricultural growth.
  • However, this region receives lesser sunlight than the West-south corridor, making it a less viable option.
  • Despite these reservations, SIPs are being viewed as the answer to erratic power supplies, the DISCOMs crisis and a more sustainable source of irrigation by the government.
  • There is a risk of over-exploitation of groundwater since on-demand cheap power will always be available after the introduction of SIPs.
  • However, the govt has introduced several solar irrigation schemes, such as PMKUSUM and SKY.
  • Another programme called Solar Power as a Remunerative Crop [SPaRC] was initiated in Gujarat by the International Water Management Institute.
  • In these schemes, preference is given to farmers who are already using water-saving micro-irrigation systems or are open to doing so.
  • The criteria for availing subsidies may benefit only medium- and large-scale farmers, as they are more likely to have a micro-irrigation system in place.
  • High initial capital investments– Despite subsidies, the initial capital investment remains high, raising questions about the viability of SIPs.
  • High operational and maintenance cost– The operation and maintenance of solar PV systems require trained professionals and machine components, which may be hard to find in rural areas. However, to overcome the obstacle, the Union Ministry of New and Renewable Energy aims to upskill youth for employment opportunities in the growing Solar Energy Power Project in India and abroad under it’s Suryamitra Skill Development Programme.

About SPaRC programme:

  • Under it, the International Water Management Institute had proposed incentivising farmers to sell solar power as a remunerative crop to curb the usage of diesel pumps in the west-south corridor.
  • Farmers can sell surplus solar power by feeding into the grid. This alternative will incentivise farmers to conserve groundwater and energy.
  • It could also increase farmer income and enable more efficient irrigation by encouraging farmers to adopt crops with high returns to irrigation.
  • The programme includes a balanced incentive, comprising a capital cost subsidy and feed-in tariff [FiT] paid to farmers for the energy they sell back through grid-connected solar pumps.


While SIPs hold immense potential to mitigate groundwater depletion and power subsidy burden on DISCOM, steps are required to improve its adoption, viability and benefits.

Terms to know:


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