So­lar water pumps mar­ket in In­dia, by Shiv Shanker Singh, Sr Con­sul­tant, En­ergy Ver­ti­cal,

Power Watch India - - CONTENTS - By Shiv Shanker Singh

Agri­cul­ture plays a vi­tal role in In­dia’s econ­omy. Over 52 per cent of In­dia’s to­tal work­force is cur­rently em­ployed in the farm sec­tor. As per es­ti­mates by the Cen­tral Sta­tis­tics Of­fice (CSO), the share of agri­cul­ture and al­lied sec­tors (in­clud­ing agri­cul­ture, live­stock, forestry and fish­ery) was 15.35 per cent of the Gross Value Added (GVA) dur­ing 2015-16 at 2011-12 prices.

Given that rains are not al­ways timely and evenly dis­trib­uted, farm­ers pre­fer pump sets as a more re­li­able and as­sured source of ir­ri­ga­tion. Power used for ir­ri­ga­tion is highly sub­sidised by the govern­ment. Farm­ers are get­ting elec­tric­ity ei­ther free or on very low cost (flat rate or Rs 1 to 1.5/unit) which has built up sig­nif­i­cant in­ef­fi­ciency in power con­sump­tion.

There are around 20 mil­lion elec­tri­fied pumps in In­dia, be­ing used for agri­cul­ture con­sum­ing around 170 bil­lion units. The im­pli­ca­tions of this aren’t small for dis­coms. While agri­cul­ture ac­counted for 22 per cent of to­tal elec­tric­ity con­sump­tion, it gen­er­ated just 8 per cent of the rev­enues of dis­coms in FY 2014-15. To re­duce this bur­den the govern­ment is work­ing to in­crease the in­stal­la­tion of so­lar water pumps in In­dia.

The Min­istry of New and Re­new­able En­ergy (MNRE) and sev­eral state gov­ern­ments have start­ing pro­mot­ing so­lar water pumps for agri­cul­ture. The so­lar water pumps come un­der the off-grid PV scheme of the JNNSM, and are pro­vided up to 30% cap­i­tal sub­sidy and soft loans at 5% in­ter­est rates. Among the states, Ra­jasthan has been a pi­o­neer in the same, and of­fers an ad­di­tional sub­sidy of 56% over and above the MNRE sub­sidy, which means that the so­lar water pump owner gets 86% sub­sidy in to­tal. In Tamil Nadu, a to­tal of 80% sub­sidy is pro­vided, whereas in Pun­jab, the to­tal sub­sidy comes to about 70%.

State gov­ern­ments are procur­ing the pumps from sup­pli­ers (OEMs/in­te­gra­tor) ap­proved by MNRE and dis­tribut­ing it to the farm­ers. 31472 so­lar pumps have been in­stalled in 2015-16 and the ex­pected fig­ure for 2016-17 is around 38,000 pumps. Un­der the scheme, 92305 so­lar pumps have been in­stalled as of 31 Oc­to­ber, 2016. Govern­ment de­mand is ex­pected to cross a mark of 50,000 so­lar pumps in 2017-18.

Though the scheme has seen much trac­tion in the last 2 years, it is still far be­hind the ini­tial tar­get of 1,00,000 so­lar pumps in 2014-15 and 1 mil­lion pumps by 2021. Key rea­sons are the flawed pro­cure­ment process and lack of aware­ness among farm­ers.

The Ma­ha­rash­tra govern­ment has given a con­tract for at least 10,000 so­lar pumps to be in­stalled in the pilot phase and ini­tially only 6,500 farm­ers had ap­plied to the govern­ment and agreed to put up so­lar pumps in their farms and ben­e­fit from the scheme. This is be­cause of the strin­gent govern­ment ap­pli­ca­tion cri­te­ria (farm­ers should hold less than five acres of land) and also farm­ers are wary about power me­ter­ing and its fu­ture im­pli­ca­tions.

En­ergy Ef­fi­ciency Ser­vices Ltd (EESL) also launched the Na­tional Pro­gramme for Smart Pumps in April 2016 to dis­trib­ute 2 mil­lion, Five-Star rated smart pumps to farm­ers at no cost. How­ever, their first ten­der to sup­ply 150,000 smart pumps in Andhra Pradesh, an­nounced in Au­gust 2016, has seen much re­sis­tance from the in­dus­try. The Andhra Pradesh HC stayed the ten­der af­ter hear­ing the pe­ti­tion filed by South­ern In­dia En­gi­neer­ing Man­u­fac­tur­ers’ As­so­ci­a­tion (SIEMA). The main rea­son for the stay is the lim­ited par­tic­i­pa­tion op­por­tu­ni­ties for MSME play­ers in the EESL ten­der. EESL is ex­pected to al­ter the scope and come up with a fresh ten­der. EESL’s en­try in the so­lar water pumps sec­tor can ac­cel­er­ate growth to un­prece­dented num­bers.

The next two years are ex­pected to be event­ful and packed with high growth for so­lar pumps. States in con­junc­tion with MNRE are ex­pected to ramp up their pur­chase of so­lar pumps. MNRE, state govt and EESL will ex­plore other pro­cure­ment, fi­nanc­ing and dis­tribut­ing mod­els. A learn­ing can be drawn from EESL’S UJALA pro­gramme to dis­trib­ute LED light­ing.

The au­thor is Se­nior Con­sul­tant, En­ergy Ver­ti­cal, Feed­back Busi­ness Con­sult­ing Ser­vices Pvt Ltd.

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