Energy [R]evolution: A Watershed Moment in India
Solar pumps - the potential of a technology and realities on the ground
The concept of using solar energy - particularly photovoltaic (PV) technology - to pump water is not new. Academic papers have been praising its potential for decades, and programs to introduce the technology abound.
In India, several states have run subsidy programs, resulting in seven to eight thousand solar pumps installed in farmers’ fields. But that number is miniscule compared to the 9 million diesel pumps in use, mostly because uptake of solar pumps in the un-subsidized private market has been almost non-existent.
One obvious reasons for this is purchase price.
As we have seen in the previous post, diesel pumps are cheap, anywhere from 10,000-30,000 rupees (160-490 USD).
A comparably sized, 2-3 HP solar pump system sells for no less than 200,000 rupees (3,300 USD) - and often much more. This is more than ten times the price of a Honda pump. That's quite a sticker shock for even medium-size farmers.
Of course, solar pumps have one big advantage: they have almost no running cost. Solar pump owners don't spend anything on fuel (sunlight is free) and hardly anything on maintenance (zero for panels, and near zero for modern electric motors). The life expectancy of solar panels is 20+ years, the electric pump will last at least 10, and likely more. So once the farmer has made the initial investment, his water is basically free.
In the long term, the cost advantage of solar pumps is overwhelming, and the falling cost of solar panels continues to reduce the time to amortize the initial expense. Today, depending on how much he pumps, a farmer can recover his solar pump investment in as little as 2-3 years; from then on the water for his field is free, and any water he doesn’t need he can sell to his neighbors at 100% profit.
But despite this, diesel pumps continue to dominate: primarily due to credit availability, and farmer capacity for risk.
Most small farmers don’t have enough capital to buy a solar pump, forcing them to take out a loan to finance the purchase. But getting a loan is difficult, particularly for such a large sum and from rural banks that remain reluctant to finance “exotic” technology such as solar pumping.
Investing in a proven diesel pump is both cheaper and easier in terms of finance - rural banks know the technology and have been lending for this for decades.
Even if farmers are able to secure a big enough loan, they have to put up collateral, which is almost always their land. If the pump fails to perform as promised and a poor harvest results, it can mean defaulting on the loan and losing their farms.
Solar pumps remain a fringe technology, unproven to the farmer. Literally “betting the farm” on this is a huge risk to take, and recent experience has been a bad precedent. Many farmers trusted salesmen peddling expensive genetically modified seeds; the seeds failed to live up to expectations and left the farmers in massive debt. Many lost their family land as a consequence. Farmers have been burned before and are understandably reluctant and distrustful.
This mixture between credit scarcity and understandable aversion to risk has been a potent brake for solar pump adoption.
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