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Economics of grid connected solar powered irrigation pumps in Dhundhi: a case study through the lens of energy-water nexus

Student name: Ms Shreya Bedia
Guide: Dr Sukanya Das
Year of completion: 2019


Agriculture though employs half of India’s population; its GDP contribution is very low owing to the poor farm productivity. Persistent erratic rainfall with additive pressure of ever-increasing population has deepened the need of irrigation access. This has led to increased installation of pumps resulting in higher energy requirement, highlighting the “energy-water nexus”. With the rising energy demand and scarce resources, policymakers sought to shift to alternate energy options. Solar powered irrigation systems (SPIP) as a solution serves the dual purpose of reliable irrigation source and contribution to country’s green energy targets. While some studies stated that solar pumps would eliminate the energy-water trade-off, other researchers argued against it and termed SPIP as ‘Frankenstein’ monster with potential to overexploit groundwater to save energy resource. With the largescale government policies encouraging SPIP, the study aims to assess its influence on farmers’ livelihood as well as the scale of groundwater extraction in agricultural use in Dhundhi, where solar pumps are deployed with an energy buy-back option. The study found out that solar pump users are being positively benefitted with a substantial increase in income stemming from cost reductions and timely irrigation. Higher water sales further augmented the income of solar pump owners (SPO) creating a negative externality for diesel pump owners who lost their customers to SPOs as demonstrated in the qualitative analysis. Though the scale and rate of water abstraction has increased post solar pumps, the high physical and economic productivity of solar pump owners has evidenced the efficacy of the energy incentive in curbing over-abstraction of water. The issue lies with the solar water buyers who have resulted in lowest physical water productivity in response to the irrigation cost from solar pumps which is a fixed rate per land unit opposed to price per hour charged in case of diesel pumps.

Keywords: Solar powered irrigation pumps, Energy-water nexus, Groundwater