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首页文档碳中和资料研究报告国际可持续发展研究所：可持续实施太阳能灌溉（英文版）

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Implementing
Solar Irrigation
Sustainably:
A guidebook for state policy-
makers on implementing
decentralized solar power plants
through PM-KUSUM Components
A and C (feeder-level solarization)
with maximum social, economic,
and environmental benefits
GUIDEBOOK
T
HE
E
NERGY
AND
R
ESOURCES
I
NSTITUTE
Creating Innovative Solutions for a Sustainable Future
Implementing
Solar Irrigation
Sustainably:
A guidebook for state policy-
makers on implementing
decentralized solar power plants
through PM-KUSUM Components
A and C (feeder-level solarization)
with maximum social, economic,
and environmental benefits
GUIDEBOOK
IISD.org
iv
Implementing Solar Irrigation Sustainably
© 2023 International Institute for Sustainable Development
Published by the International Institute for Sustainable Development
This publication is licensed under a Creative Commons Attribution-
NonCommercial-ShareAlike 4.0 International License.
International Institute for Sustainable Development
The International Institute for Sustainable Development (IISD)
is an award-winning independent think tank working to accelerate
solutions for a stable climate, sustainable resource management,
and fair economies. Our work inspires better decisions and sparks
meaningful action to help people and the planet thrive. We shine
a light on what can be achieved when governments, businesses,
non-profits, and communities come together. IISD’s sta of more
than 200 people, plus over 150 associates and consultants, come
from across the globe and from many disciplines. With oces in
Winnipeg, Geneva, Ottawa, and Toronto, our work aects lives in
nearly 100 countries.
IISD is a registered charitable organization in Canada and has
501(c)(3) status in the United States. IISD receives core operating
support from the Province of Manitoba and project funding from
governments inside and outside Canada, United Nations agencies,
foundations, the private sector, and individuals.
Implementing Solar Irrigation Sustainably: A guidebook for
state policy-makers on implementing decentralized solar power
plants through PM-KUSUM Components A and C (feeder-level
solarization) with maximum social, economic, and environmental
benefits
May 2023
Written by Anas Rahman, Siddharth Goel, Akash Sharma, Christopher
Beaton, Florian Postel, Kritika Kumar, and Ujjwal Kumar
Head Office
111 Lombard Avenue,
Suite 325
Winnipeg, Manitoba
Canada R3B 0T4
Tel: +1 (204) 958-7700
Website: www.iisd.org
Twitter: @IISD_news
/120
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ImplementingSolarIrrigationSustainably:Aguidebookforstatepolicy-makersonimplementingdecentralizedsolarpowerplantsthroughPM-KUSUMComponentsAandC(feeder-levelsolarization)withmaximumsocial,economic,andenvironmentalbenefitsGUIDEBOOKTHEENERGYANDRESOURCESINSTITUTECreatingInnovativeSolutionsforaSustainableFutureImplementingSolarIrrigationSustainably:Aguidebookforstatepolicy-makersonimplementingdecentralizedsolarpowerplantsthroughPM-KUSUMComponentsAandC(feeder-levelsolarization)withmaximumsocial,economic,andenvironmentalbenefitsGUIDEBOOKIISD.orgivImplementingSolarIrrigationSustainably©2023InternationalInstituteforSustainableDevelopmentPublishedbytheInternationalInstituteforSustainableDevelopmentThispublicationislicensedunderaCreativeCommonsAttribution-NonCommercial-ShareAlike4.0InternationalLicense.InternationalInstituteforSustainableDevelopmentTheInternationalInstituteforSustainableDevelopment(IISD)isanaward-winningindependentthinktankworkingtoacceleratesolutionsforastableclimate,sustainableresourcemanagement,andfaireconomies.Ourworkinspiresbetterdecisionsandsparksmeaningfulactiontohelppeopleandtheplanetthrive.Weshinealightonwhatcanbeachievedwhengovernments,businesses,non-profits,andcommunitiescometogether.IISD’sstaffofmorethan200people,plusover150associatesandconsultants,comefromacrosstheglobeandfrommanydisciplines.WithofficesinWinnipeg,Geneva,Ottawa,andToronto,ourworkaffectslivesinnearly100countries.IISDisaregisteredcharitableorganizationinCanadaandhas501(c)(3)statusintheUnitedStates.IISDreceivescoreoperatingsupportfromtheProvinceofManitobaandprojectfundingfromgovernmentsinsideandoutsideCanada,UnitedNationsagencies,foundations,theprivatesector,andindividuals.ImplementingSolarIrrigationSustainably:Aguidebookforstatepolicy-makersonimplementingdecentralizedsolarpowerplantsthroughPM-KUSUMComponentsAandC(feeder-levelsolarization)withmaximumsocial,economic,andenvironmentalbenefitsMay2023WrittenbyAnasRahman,SiddharthGoel,AkashSharma,ChristopherBeaton,FlorianPostel,KritikaKumar,andUjjwalKumarHeadOffice111LombardAvenue,Suite325Winnipeg,ManitobaCanadaR3B0T4Tel:+1(204)958-7700Website:www.iisd.orgTwitter:@IISD_newsIISD.orgvImplementingSolarIrrigationSustainablyAcknowledgementsTheInternationalInstituteforSustainableDevelopmentandtheConsumerUnity&TrustSocietyInternationalwouldliketothankeveryonewhocontributedtotheproductionofthisguidebook.Inparticular,wewouldliketothankourcolleaguesintheprojectconsortiumthatsupportedthispublication,particularlyMiniGovindan,RashmiMurali,andKritiSharmafromTheEnergyandResourcesInstitute.WewouldalsoliketothankourpartnersAbhishekJainandShaluAgrawalfromtheCouncilonEnergy,EnvironmentandWater(CEEW)fortheirexpertadvicethroughouttheproject.Wewouldalsoliketothankthemanygovernmentofficials,financialinstitutions,distributioncompanies,andthematicexpertswhoagreedtoparticipateinin-depthinterviewsandsharetheiradviceandexperiences.Theauthorsofthisguidebookwouldliketothankthefollowingindividualsandinstitutionsforthevaluablecommentsandrecommendationsthattheyprovidedaspeerreviewers:•AbhishekJainandShaluAgrawal,CEEW•AshwinGambhir,PrayasEnergyGroup•MartinScheffler,AurovilleConsulting•MohanaiahPaladi,FormerChiefGeneralManager,NationalBankforAgricultureandRuralDevelopment•PriyaJadhav,IndianInstituteofTechnologyBombay•RajanAggarwal,PunjabAgriculturalUniversity•SayantanDeyandSusmitaChatterjee,SwitchONFoundation•AkhileswariS.andRahulKumar,MinistryofNewandRenewableEnergy•SudattaRay,Yale-NUSCollege•TushaarShah,InternationalWaterManagementInstituteThispublicationcouldnothavebeenundertakenwithoutthegeneroussupportoftheIndo-GermandevelopmentcooperationprojectthattheDeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)GmbHimplementsonbehalfoftheFederalMinistryforEconomicCooperationandDevelopment(BMZ),includingsubstantiveinputsandsupportfromFlorianPostel,KritikaKumar,andNilanjanGhose,aswellasco-fundingfromthegovernmentsofDenmark,Norway,andSweden.Theopinionsexpressedandtheargumentsemployedinthisguidebookdonotnecessarilyreflectthoseofthepeerreviewers,organizations,andfunders,norshouldtheybeattributedtothem.IISD.orgviiiImplementingSolarIrrigationSustainablyExecutiveSummaryThePradhanMantriKisanUrjaSurakshaevamUtthaanMahabhiyan(PM-KUSUM)scheme,launchedin2019bytheMinistryofNewandRenewableEnergy,GovernmentofIndia,aimstotransformIndia’sagriculturesectorbyimprovingcropproductivityandincreasingfarmincomesthroughthesolarizationoftheagriculturesector.Thisdocumentformsthesecondpartofaguidebookseries,providingrecommendationstostatepolicy-makersonhowtheycanimplementsolarirrigationmodelseffectivelyandsustainably.ThisguidebookcoversComponentAandthesubcomponent“Feeder-LevelSolarization”undertheComponentCofPM-KUSUM.ThepreviousguidebookaddressedComponentBandthesubcomponent“IndividualPumpSolarization”underComponentC.AnillustrationofthedifferentcomponentsisprovidedinFigure1.ComponentAandthesubcomponentFeeder-LevelSolarizationunderComponentC(hereafterreferredtoasComponentC(FLS))ofPM-KUSUMinvolvesettingupsmall-scalesolarpowerplantsatthesubstationleveltopowerruralfeeders.Thesemodelsarerelativelynewforstatepolicy-makers.Hencetheguidebookadoptsacomprehensiveimplementation-focusedapproachcoveringfoursections:1.Context:Thewhat,why,andhowofdecentralizedsolarplants,theireconomicimpactondifferentstakeholders,andtheneedtoviewthemthroughawater–energy–foodnexuslenstomitigatepotentialexternalities.2.Financing:Thefinancingchallengesfacedbystates,farmers,andprivatedevelopersthatholdbackthescheme’simplementationanddifferentsolutionstoaddressthem.3.Implementationdesignandcoordination:Sustainableapproachesofimplementationandspecificmeasurestomaximizesocialandenvironmentalbenefits.4.Learningbydoing:Areasthatrequireon-the-groundexperimentstogenerateevidenceforpolicyformulationandaframeworktodesignsuchpilots.Context:Thewhy,how,andimpactsofdecentralizedsolarplantsThissectiondeconstructsthedecentralizedsolarplantmodelforsolarizingruralfeedersanditspotentialimpact,includingbenefitstodifferentstakeholders—farmers,distributioncompanies(DISCOMs),andthestategovernment—andimpactonthewater–energy–foodnexus.DecentralizedSolarPlantsAdecentralizedsolarplantunderPM-KUSUMComponentsAandC(FLS)hasamuchsmallercapacitythanagrid-scalesolarplantbutamuchlargeronethanatypicalhouseholdrooftopsolarsystem.Itislocatedclosetothefinalconsumersandconnectedtoadistributionsubstation.ComponentsComponentsAandC(FLS)aredesignedwithverydifferentobjectives.However,thetwomayoverlapundercertaincircumstances(FigureES1).Astategovernment’sprimarypolicyobjectivecanhelpdeterminewhichcomponentofPM-KUSUMisbesttopursueinaspecificregion.IISD.orgixImplementingSolarIrrigationSustainablyFigureES1.AreasofoverlapbetweenPM-KUSUMComponentsAandC(FLS)Source:Authors’diagrambasedonMNRE,2019,2020.SolarizingAgriculturalFeedersSolarizingagriculturalfeederscanprovidemultiplebenefitstofarmersandthestategovernment(FigureES2).FigureES2.Benefitsforfarmers,state,andDISCOMinsolarizingagriculturefeedersComponentC(FLS)ComponentASupportfarmerstosetupplantsontheirlandandearnadditionalincomeSolarizeagriculturalfeedersfordaytimepowerandreducesubsidiesOBJECTIVESTARGETFEEDERSSUBSTATIONSTYPEOFLANDRuralsubstationAgriculturefeedersFarmers’landAnysuitablelandAreasofoverlapBenefitsforstate/DISCOMBenefitsforfarmersImprovedqualityofpowersupply:Distributedpowerplantscanimprovevoltageconditionsandsupportothermeasurestostrengthenthedistributiongrid.Timing,duration,andpredictabilityofpowersupply:Farmerscangetupto10hoursofdaytimepowersupplytoreducethedifficultiesandhazardsoferraticnighttimepowersupply.Reductioninpowerpurchasecost:Thecostofpowerfromadistributedpowerplantistypicallylessthantheaveragepowerpurchasecostofthestate.Reductionintransmissionanddistribution(T&D)lossesandcharges:TheT&Dlossesandchargesuptothe11kVsubstationlevelthatafuturecapacityadditionwouldhaveincurredareavoided.Fulfillmentofrenewablepurchaseobligations(RPOs):IfaDISCOM’srenewablepurchaseisbelowRPOnorms,PM-KUSUMcanreducetheshortfall.TheDISCOMcanissuerenewableenergycertificates(REC)andearnincomeifitisinexcess.Long-termbenefitofpowersystemflexibility:Shiftingagriculturalloadtothedaytimetocoincidewithsolargenerationisthemostcost-effectivestrategyforgridstabilityinthecomingyears.Socialbenefits,includinglocalemploymentgeneration:Distributedsolarplantscanhelpcreatenewgreenjobsthataregeographicallywelldistributed.IISD.orgxImplementingSolarIrrigationSustainablyHowever,therearesomeissueswiththemodel,mostofwhichcanbeaddressedthroughbetterawarenessandintelligentschemedesign(TableES1).TableES1.ChallengesfacedbyDISCOMsinsolarizingagriculturalfeedersandpotentialsolutionsConcernsSolutionsSeasonalfluctuationinagriculturalloadThekeytoavoidingupstreampowerflowduringthenon-irrigationseasonisoptimaltargetingandsizingofthepowerplant.Sizingshouldconsiderthebaseloadrequirementofthesubstation.Highercostthanutility-scalesolarplantsAlthoughutility-scalesolarplantsoffercheaperpower,theirgrowthhasinherentlimitations,anddecentralizedpowerplantscanplayacomplementaryrole.Further,somecostadvantagesofutility-solarplantsareduetotemporaryincentives,suchastheinterstatetransmissionsystemwaiver.ImpactondailyloadmanagementShiftingagricultureloadtothedaytimeisthemostcost-effectivemeansofloadmanagementastheshareofsolarpowerincreasesinthegrid.StatescanusePM-KUSUMtoplanthelong-termtransitionofagriculturalpower.ExcesscontractedcapacityCost-benefitstudiesshowthatevenifittakesafewyearsforthedemandtoexceedcontractedcapacity,thereisabenefittostatesfromPM-KUSUM.Source:Authors.ImpactonWaterTheimpactofsolarizingagriculturefeedersongroundwatersustainabilityandwatermarketsisnotwellstudied.However,pastexperimentsonimprovingelectricityaccessshowthatwhenthelocalhydrogeologyissuitable,andwateristheprimaryconstrainttoincreasingcropproduction,thenthereisastrongpossibilityofincreasinggroundwateruse,reiteratingtheneedforcarefulschemedesign.PreventingGroundwaterDepletionCost-reflectiveelectricitypricingisthelong-termsolutiontoaddressgroundwaterconcerns.However,ifstatescannotimplementitduetopoliticalsensitivities,theyshouldconsiderotherstrategiestoaddressgroundwaterconcerns.PM-KUSUMguidelinesofferaframeworkforstatestoconsiderdemand-sidemanagementbyprovidingdirectincentivesforfarmerstostaywithinastipulatedbenchmarkelectricityconsumptionlimit,potentiallypreventinggroundwaterdepletion.Thereareadvantagesandchallengestothismodel(TableES2).IISD.orgxiImplementingSolarIrrigationSustainablyTableES2.ProsandconsofdirectwaterincentivesmechanismAdvantagesChallenges•Itisvoluntaryandbasedonincentivesthatmakeitmorepoliticallyfeasible.•Itdoesnotrequiretheparticipationofallfarmersinthefeeder.However,thehighertheparticipation,thebetterthepotentialoutcomes.•Identifyingtheappropriatebenchmarkconsumptionlimitorquota.•Participationoftenantfarmersduetotheirlackofelectricityconnection.•FinancialandcapacityburdenontheDISCOMtoimplementdirectincentives.Source:AuthorsCaseStudiesTwocasestudies—oneonMukhyaMantriSaurKrishiVahiniYojana(MSKVY)ofMaharashtraandtheotheronthePaaniBachaoPaisaKamao(PBPK)schemeofPunjab—areprovidedintheAppendix.MSKVYisthemostsuccessfulschemeforfeedersolarizationandprovidesvaluablelearningsforthePM-KUSUM.ThePBPKschemeisthelargestdirectincentivesschemeforwaterconservation.FinancingFinancingislinkedwithdifferentaspectsofthescheme,andanyrisksandopportunitiesaffectingtheschemearereflectedineaseoffinancing.Hence,thissectionusesfinancingasananchortoinvestigatechallengesfacinginvestmentintheschemeandrecommendsmeasurestoovercomethem.Financingremainsthebiggestchallengetothescheme’ssuccess.Therearetwowaystoboostinvestment:•Byreducingtheriskperceptionofthescheme•Byincreasingtariffstomakereturnsmoreattractivetothefarmer/developer.Threekeyconcernsleadtoahigherriskperceptionoftheschemeamongdevelopers.Someproposedsolutionsthatstatescanadopttoaddresstheseconcernsareasfollows:IISD.orgxiiImplementingSolarIrrigationSustainablyTableES3.KeyconcernsondistributedsolarpowerplantsandproposedsolutionstomitigatethemConcernsSolutionsConcernsaboutpoorgridinfrastructureDeveloperssuggestthatthesafeguardsrecommendedinthePM-KUSUMguidelinesforgridavailabilitydonotfullyallaytheirconcernsaboutthelikelihoodofoutagesduetothepoorstateofruralfeederinfrastructure.•Incorporating“deemedgenerationclauses”intothepowerpurchaseagreements.•Undertakinggridupgradingatthedistributionlevel,potentiallythroughconvergencewiththeRevampedReforms-basedandResults-linkedDistributionSectorScheme.•AlthoughComponentC(FLS)mainlytargetssegregatedfeeders,statescanoptforvirtualfeedersegregationinplaceswherephysicalsegregationdoesn’tmakeeconomicsense.ConcernsarisingduetooperationalandregulatorycostsDevelopersfaceachallengeinidentifyingandleasingaffordablelandforsettingupasolarplantandthetransmissionandevacuationinfrastructure.Anotherkeychallengeisrelatedtolandrevenueregulations,includingthetimelyapplicationofland-useregulationsrestrictinglandtransferincertainconditions.•Facilitatinginteractionsbetweenpotentialdevelopersandlandowners.Thisfacilitationcanhappenatthreelevels:•Identifyinginterestedfarmersbyinitiatingaregistryoflandownersinterestedinthescheme—aso-called“landbank”—andconnectingthemwithdevelopers.•SupportingdeveloperstoassessthesuitabilityofdifferentlandsusingtheDISCOMs’fieldstaffanddata-basedfacilitation.•Supportingnegotiationswithlandowners,especiallyfortherightofwayoftransmissionlinesandevacuationbay.•Enablingclosecoordinationwiththelandrevenuedepartmenttoaddressland-regulationconcerns.•Promotingalternativeownershipmodelslikespecialpurposevehicleswhereverlandleasingisrestricted.ConcernsarisingduetopaymentrisksandpoorcreditworthinessofdevelopersTwokeychallengesconcerningfinancingarethetimelypaymentofduesandaccesstofinance.DISCOMs’poortrackrecordinmakingtimelypaymentsnecessitatesthecreationofsafeguardsbystatesfortimelypayment.Accesstocreditfromfinancialinstitutionsisachallengeduetothelowcapacityoffarmerstoprovideupfrontcapitalandthepoorcreditworthiness.•Issuinglettersofcreditorstateguaranteestoallaypaymentconcerns.•Exploringthepossibilityofbringingincentralpublicsectorunitsasintermediaries,whichhasbeenasuccessfulmodelintheutility-scalesolarsegment.•Exploringalternativefinancingchannelsinpartnershipwithdevelopmentfinanceinstitutions.•Allowingjointventurescanalsohelpinterestedpartieswithcomplementarystrengthscometogether.•Enablingclosecoordinationwithbankingofficials,state-levelbankingcommittees,anddeveloperstoraiseawareness,supportbankers’training,andsimplifyproceduresinaccessingfinance.•Exploreconvergenceopportunitiesinfinancingwithotherschemes,includingmicro-,small-,andmedium-sizedenterprisesschemesandtheAgricultureInfrastructureFund.IISD.orgxiiiImplementingSolarIrrigationSustainablySettingatariffcommensuratetotherisksandeffortsundertakenbydevelopersiscriticalfortheviabilityofthedecentralizedsolarplantmodel.Ananalysisofthetariffadoptedindifferentstatesindicatesthatthereareafewcriticalissuesintheprocessofsettingatariff.Threekeyaspectsemergedasthereasonforanunviabletariffsetinmanystates,whichledtolimiteddeveloperinterest:1.Asmall-scalepowerplant’soperationandmaintenancecostismuchhigherpermegawattthanagrid-scaleplant.2.Theactualcapitalcostreportedduringourinterviewsandothersourcesishigherthantheassumptionsusedbymoststateelectricityregulatorycommissions.3.Thelogisticaloverheadsofestablishingasolarplant,suchaslandidentificationandnegotiation,addtothecostbutaren’tproperlyintegratedintothetariff.Statescaneitherrefinetheirtariffcalculationsormakethemmoreresponsivetomarketvariations.Statescanalsolookforalternativetariff-settingoptions,includingcomparisonwiththepresentlandedcostofpower.ImplementationDesignandCoordinationDecentralizedsolarpowerplantsimpactmultiplesectorslikepower,agriculture,andlandrevenue.Hence,awell-thought-outimplementationdesignplanisneededforstatestomaximizethescheme’soutcomes,withinputandparticipationfromallrelevantdepartments.AllocatingResponsibilitiesTheparticipationofallconcerneddepartmentsisdesirable,butsharingresponsibilitiesequallybetweenmultipledepartmentscanslowimplementation.Hence,thereneedstobeaproperbalanceinallocatingresponsibilitiesforoptimalcoordination.Thestateimplementingagency(SIA)isresponsibleforimplementationandmustensurecoordinationwithotherdepartments.1.FacilitatinginformationexchangeOurconsultationssuggestthatmanynon-implementingstatedepartmentsareunawareoftheschemeduetoitsnewness.Infacilitatinginformationexchangewiththesedepartments,theSIAwillalsogainimportantinformationonland-usechangeregulations,thelocalgroundwatersituation,andgeographicalareasforotherschemes.ItisrecommendedthatSIAsorganizeaninceptionworkshopandsubsequentcoordinationmeetingswithagricultureandlandrevenuedepartments,groundwateragencies,andSLBCs.AnindicativelistofkeyinformationtobesharedandcollectedisprovidedinTable7ofSection4.2.UndertakinginfrastructureplanningTomaximizethescheme’soutcomes,theSIAshould:°Identifythemostsuitablefeedersforthescheme°Decidetheoptimumcapacityoftheplants°Supporttheschemewithcomplementaryactivitiestostrengthenthegrid.IISD.orgxivImplementingSolarIrrigationSustainablyTomaximizetheeconomicoutcomes,theSIAshouldselectsubstationswithahighagricultureloadandasignificantnon-agricultureloadtominimizetheupstreamflowofpowerinthenon-irrigationseason.Targetingsubstationswithpoor-qualitypowermayincreasethescheme’ssocialoutcomesthroughimprovedpowerqualityforfarmers.MNREhasissuedsizingguidelinesfortheupperlimitofsolarplantseligibleforCFA.SIAsarerecommendedtoconductabaseloadanalysisatasubstationlevelandoptimizeplantsizetoreduceupstreamflowinthenon-irrigationseason.3.PromotinglinkagestoenergyandwaterefficiencyLinkingPM-KUSUMwithwaterandenergyefficiencypoliciesishighlydesirable.Butstatesneedtoconsidertheimpactofapolicyonthreestakeholders—theDISCOM,farmerswithelectricityconnections,andfarmersdependingonwatermarkets.PromotingEnergyandWaterEfficiencyStatesneedtoselectandidentifytherightsetofmeasures.Theimpactsofsomeofthesemeasuresarewellestablished,andothersrequirepilottestingbeforescalingup.Inlocationswheredirectcashincentivescanworkandaredesirable,statescanusethemasatooltoincentivizeenergyandwaterefficiency.FigureES3.MeasurestoincreaseefficiencyandsuitabilityinspecificcontextsProvenmeasuresforincreasingefficiencyEnergy-efficientpumpreplacement:Studiesshowpotentialsavingsof30%–40%energythroughpumpreplacement.However,alackofincentivestomaintainthepumpeffiencyquicklyleadstodeteriorationinafewyears.Capacitorbankinstallation:Installationofcapacitorbanksattheloadend(i.e.,withthemotor)significantlyimprovesthepowerfactor.However,akeychallengeisthatitiseffectiveonlywhenmostfarmersinafeederadoptitandhenceneedacoordinatedapproachfromtheDISCOM.Water-efficientpractices:Water-efficientirrigationtechnologiesandtechniquescansignificantlysavewaterandenergy.However,theabsenceofincentivesandneedforcapacitybuildingmakeitchallengingtoimplementatawiderscale.MeasuressuitableincertaincontextsDirectincentivemechanism:ThedirectincentivemechanismunderPM-KUSUMmayhelpreduceelectricityandwaterconsumptioninspecificcontextsbutmayalsoincreasethewatermarketratesanddisadvantagewaterbuyers.Thenetfinancialbenefitorcostofimplementingdirectincentivesforstatesrequiresfurtheranalysis.AdecisiontreeonwhethertoexplorethedirectincentivemechanismornotisprovidedinFigure12.IISD.orgxvImplementingSolarIrrigationSustainablySupportfromotherdepartmentscansignificantlyenhancetheschemeimplementation.ThefunctionsofdifferentagenciesareprovidedinTable8ofSection4.LearningbyDoingPM-KUSUMComponentsAandC(FLS)arenotyetwidelydeployed.Newchallengesforimplementationandsustainableschemeoutcomesmayariseinthefuture.Furthermore,policyinnovationsrecommendedinthePM-KUSUMschemeguidelines,suchaswaterincentivesandagrivoltaics,canoffersustainablesolutionsforstates.However,theyrequireevidence-basedstrategiestosuitdifferentcontexts.Henceitiscriticaltolearnbydoing—gatherdataonimplementationandconstantlyrefinedeploymentapproachesbasedonthedata.StrategyforMonitoringandEvaluationFigureES4.StrategyformonitoringandevaluationSource:Authors’.TheSolarEnergyDataManagementPortalConsistsoffunctioningdatafromthedistributedpowerplantandthepumpsinthetargetfeederFeedermeterdatafromthetargetfeederForbaselinedataonenergyconsumption.IfRMSisnotinstalledwithpumps,itcanalsoactasaproxyforconsumptiondataaftertheschemeimplementationToolsforgatheringdataImpactonfarmers’energyaccess→Energyconsumptionbyfarmer→Voltagevariations→Farmers’cropchoices→IntangibleimpactsduetotheshiftinpowersupplytodaytimeEconomicimpactonthestate→Totalenergygenerationfromsolarpowerplant→ThecoincidenceofsolarpowergenerationandconsumptionwithinthesubstationImpactongroundwater→Waterconsumption→Groundwaterlevel(longterm)Socialimpactofthescheme→Landsizecategoryoffarmersbenefitingfromthescheme→WaterpricesinthelocalwatermarketCriteriaandparametersforevaluationIISD.orgxviImplementingSolarIrrigationSustainablyPilotingInnovativeModelsStatescanallocateasmallshareofnewprojectsforpilotinginnovativemodels,includingwaterincentivesandagrivoltaics.Thisapproachwouldgenerateevidenceforsubsequentscalingupofthesemodelswithouthamperingcurrentdeployment.Weexploredtwokeyinnovativemodels:i)directincentivesforwaterconservationandii)agrivoltaics.EfficiencyIncentivesThePBPKschemeisthefirstlarge-scaleinitiativepilotingthedirectcashincentivesproposedinthePM-KUSUMguidelines.Initialstudiesbyresearchorganizationsfoundthatthecombinationofdaytimeelectricityprovisionandcashincentivesforunusedelectricityledtofarmersreducingtheirself-reportedirrigationhoursunderthePBPKscheme.However,moredataandimpactevaluationstudiesareneededbeforeanydefinitiveconclusionscanbedrawn.ThePBPKschemeofferssomeuniquelearningsinaddressingimplementationchallenges(SeethePBPKcasestudyintheAppendixforfurtherreading):1.Directbenefittransferschemeforagriculture:PBPK’sdesignisbasedononeofthreedirectbenefittransfermodels,wherefarmersareallocatedaseasonallyadjustedpredeterminedamountofelectricitybasedontheirconnectedloadandpaidamonetaryincentivedirectlyintotheirbankaccountsiftheyuselessthantheirallocatedconsumption.Initialtrialsshowedthatwithadequatecommunicationactivities,asizableshareoffarmerswasinterestedinenrollinginthescheme.2.Context-specificapproachtofixingquota:Althoughcalculatingtheelectricityquotabasedonthesizeofafarmer’slandholdingismoredesirable,PBPKusedtheprevailingelectricityuse-basedquotaforpracticalreasons.3.Water-savingtechniquesindemonstrationfarms:Popularizingwater-efficientpracticesiscriticaltoensuringsustainedreductioningroundwaterusage.Punjabcreateddemonstrationfarmsonschemefeederstohighlightthebenefitsofwater-savingtechniquesandresource-conservationtechnologies.4.Coordinationstructuresandincentivesforimplementingagencies:Asidefromwaterconservation,thePBPKdesignalsofocusedoncreatinginstitutionalstructuresthatpromoteeffectiveinteragencycoordinationandbetterimplementation.Theschemewasbasedonextensiveconsultationwithallstakeholders;therewashigh-levelpoliticalandadministrativecommitment;andtherewasaclearlydefinedmultilayeredadministrativestructureinplace(elaboratedinBox15).5.Measurestoincludetenantfarmers:Thestateintroducedamendmentstoitselectricitypoliciestoenablejointelectricityconnectionsinthenameoflegalheirsandenabledcashtransferdirectlytotenantfarmersaftertheenrolmentofthelandowner.LearningsfromthePunjabPBPKschememaynotapplytootherpartsofthecountrygiventhediversityofagroeconomiccontextsindifferentstates.Indeed,apilotstudyconductedinGujaratthattrialledelectricity-linkedincentivesforfarmersfoundahighenrolmentformeteringbutnoimpactonwaterconsumption.IISD.orgxviiImplementingSolarIrrigationSustainablyAgrivoltaicsAgrivoltaicsreferstothesimultaneoususeoflandforagricultureandphotovoltaicpowergeneration.Thisisachievedbydesigningasolarpowerplanttoenablecultivationbetweenorbelowthephotovoltaicpanels.TherehavebeenonlyahandfulofpilotsonagrivoltaicsinIndia.Mainstreamingthemrequiresthedevelopmentofnewbusinessmodels,regulations,standards,andpromotionalmeasuresandcreatingevaluationframeworksforcontinuouslearning(TableES4).TableES4.KeylessonsfromagrivoltaicspilotprojectsinIndiaBusinessmodelsTherearethreebroadbusinessmodelsthatwehaveexploredinagrivoltaics:1.Partnershipbetweenfarmeranddeveloper2.Systemwhollyownedandoperatedbyoneentity3.Developerasaprimarypromoter,farmerasapartnerThesuitabilityofthemodelsvarieswiththeagroeconomicsituation—thefirsttwoaresuitablewherehigh-valuecropsarecultivated,andlandrentishigh;thethirdmodelissuitableforaridandsemi-aridregions.PromotionalmeasuresThestatecanfacilitatetheuptakeofagrivoltaicsthroughawarenessandfinancialincentives.Organizingstate-levelworkshopsfordevelopersandfarmerscouldgenerateawareness.Creatingamechanismtofundspecialprojectsbasedonproposalsfromstakeholderscanhelpinnovatenewmodels.EvaluationStatesshouldevaluatethefirstsetoffutureprojectsalongfivecriteria:i)techno-commercialevaluationtounderstandtheviabilityandtechnicalcharacteristicsofdifferenttechnologymodels,ii)effectivelandareaofagricultureandcropyield,whichcanformthebasisofstandardsinthefuture,iii)impactonwaterresources,iv)shadingcharacteristicsofdifferentmodelstocreateguidelinesforcropselection,andv)otheroperationalchallenges.Source:Authors.IISD.orgxviiiImplementingSolarIrrigationSustainablyTableofContents1.0Introduction.....................................................................................................................................................................12.0Context:TheWhy,How,andImpactsofDecentralizedSolarPlants.................................................42.1WhyDoestheContextMatter?.......................................................................................................................................52.2WhatAretheMainDifferencesBetweenPM-KUSUMComponentsAandC(FLS)?...........52.3HowDoFarmersBenefitFromSolarizingAgriculturalFeedersUnderPM-KUSUM?............82.4HowDotheStatesandDISCOMsBenefitFromPM-KUSUM?............................................................102.5HowDoSolarizedAgricultureFeedersImpacttheWEFNexus?.........................................................133.0Financing.........................................................................................................................................................................233.1WhyDoesFinancingMatter?...........................................................................................................................................243.2HowCanStatesReduceInvestmentRiskstoPM-KUSUM?..................................................................253.3HowCantheStatesArriveatanOptimumTariff?.........................................................................................374.0ImplementationDesignandCoordination....................................................................................................454.1WhyDoDesignandCoordinationMatterforImplementation?..........................................................464.2WhatRolesShouldtheStateImplementingAgencyPlay?....................................................................464.3HowCanOtherDepartmentsandAgenciesSupportImplementation?.......................................575.0LearningByDoing......................................................................................................................................................645.1WhyIsItImportanttoAdaptByLearning?.........................................................................................................655.2ImplementingMonitoringandEvaluation.............................................................................................................655.3PilotingandEvaluatingInnovativeAspectsofSchemeDesignforSustainability.............68References..............................................................................................................................................................................77Appendix................................................................................................................................................................................82IISD.orgxixImplementingSolarIrrigationSustainablyListofFiguresFigureES1.AreasofoverlapbetweenPM-KUSUMComponentsAandC(FLS).......................................ixFigureES2.Benefitsforfarmers,state,andDISCOMinsolarizingagriculturefeeders.....................ixFigureES3.Measurestoincreaseefficiencyandsuitabilityinspecificcontexts...............................xivFigureES4.Strategyformonitoringandevaluation.......................................................................................................xvFigure1.PM-KUSUMcomponents...................................................................................................................................................2Figure2.ObjectivesofdecentralizedsolarpowerandhowtheylinktoPM-KUSUM............................5Figure3.AreasofoverlapbetweenPM-KUSUMComponentsAandC(FLS)..............................................6Figure4.Impactonqualityofpowersupply............................................................................................................................9Figure5.Impactontiming,duration,andpredictabilityofthepowersupply..............................................9Figure6.Benefitsforfarmers,state,andDISCOMinsolarizingagriculturefeeders..........................20Figure7.Twomodelsoffinancingsolarpowerplants....................................................................................................24Figure8.Landowner–developerinteraction..........................................................................................................................28Figure9.CeilingtariffforPM-KUSUMComponentAdeterminedbydifferentstates.......................37Figure10.Agriculturalconsumptionandsolargenerationprofilesfromasolarizedagriculturefeeder.......................................................................................................................................................................................49Figure11.WEFlinkagesoffeedersolarization...................................................................................................................52Figure12.Decisiontree—Whentoexploredirectincentiveschemesforenergyandwaterconservation...................................................................................................................................................................................................54Figure13.Measurestoincreaseefficiencyandsuitabilityinspecificcontexts....................................62Figure14.Strategyformonitoringandevaluation...........................................................................................................74ListofTablesTableES1.ChallengesfacedbyDISCOMsinsolarizingagriculturalfeedersandpotentialsolutions................................................................................................................................................................................................................xTableES2.Prosandconsofdirectwaterincentivesmechanism........................................................................xiTableES3.Keyconcernsondistributedsolarpowerplantsandproposedsolutionstomitigatethem.................................................................................................................................................................................................xiiTableES4.KeylessonsfromagrivoltaicspilotprojectsinIndia.........................................................................xviiTable1.DesigndifferencesbetweenPM-KUSUMComponentsAandC(FLS)............................................7Table2.ChallengesfacedbyDISCOMsinsolarizingagriculturalfeedersandpotentialsolutions.............................................................................................................................................................................................................21Table3.Prosandconsofdirectwaterincentivesmechanism..............................................................................21Table4.Measurestoenableinformationsharingbetweendevelopersandlandowners..................29Table5.Keyparametersforlevelizedcostcalculationbydifferentstates.................................................38IISD.orgxxImplementingSolarIrrigationSustainablyListofBoxesBox1.Agrivoltaics–ExtendingsolarplantstocultivablelandsunderPM-KUSUMAandC(FLS)......................................................................................................................................................................................................................7Box2.Improvedelectricityaccessleadingtoincreasedwaterconsumption:TheSuryaRaitascheme...................................................................................................................................................................................................15Box3.ThePaniBachaoPaisaKamaopilotexperienceinPunjab.......................................................................18Box4.PM-KUSUM—RDSSschemeconvergence.............................................................................................................26Box5.Virtualfeedersegregation—afreshlook.................................................................................................................27Box6.Examplesofonlinetoolsforsolarplantsiteselection.................................................................................30Box7.SolarFarmerSchemeinKarnataka..............................................................................................................................32Box8.PartnershipwithCPSUs........................................................................................................................................................33Box9.ConvergenceofComponentAwithMSMEschemes:ExperiencefromRajasthan...............35Box10.Alternativefinancingchannels—experiencefromIndia’srooftopsolarsector....................36Box11.Approachestotariffdetermination..........................................................................................................................41Box12.EligibilityforcentralfinancialassistanceunderComponentC(FLS)............................................51Box13.Howchangingpowersupplyaffectswaterbuyers:LessonsfromWestBengalandGujarat................................................................................................................................................................................................................53Box14.CESL-Goapartnership:Pumpreplacementincludedinthetariff...................................................55Box15.Effectivecoordinationstructuresforwaterconservation:ExperiencefromPBPKinPunjab............................................................................................................................................................................................................57Box16.MSKVYschemedesign.......................................................................................................................................................83Table6.Keyconcernsondistributedsolarpowerplantsandproposedsolutionstomitigatethem................................................................................................................................................................................................42Table7.Recommendeddepartmentsforinclusioninaninceptionworkshop............................................47Table8.Relevantagenciesandtheirsupportingroles.................................................................................................58Table9.Measuringeconomicimpactofthescheme......................................................................................................67Table10.Measuringimpactonfarmers'energyaccess...............................................................................................67Table11.Measuringsocialimpactofthescheme............................................................................................................68Table12.Measuringimpactonthegroundwater..............................................................................................................68Table13.EnrolmentinthePBPKscheme................................................................................................................................69Table14.KeylessonsfromagrivoltaicspilotprojectsinIndia................................................................................76TableA1.DetailsoftenderspublishedundertheMSKVYscheme.....................................................................84TableA2.EnrolmentintwophasesofthePBPKscheme..........................................................................................92IISD.orgxxiImplementingSolarIrrigationSustainablyAbbreviationsandAcronymsCAPEXcapitalexpenditureCESLConvergenceEnergyServicesLimitedCTUCentralTransmissionUtilityCUFcapacityutilizationfactorDFIdevelopmentfinanceinstitutionsDISCOMdistributioncompanyEESLEnergyEfficiencyServicesLimitedESCOEnergyServiceCompanyFLSfeeder-levelsolarizationFYfinancialyearINRIndianrupeeISTSinterstatetransmissionsystemKVKKrishiVigyanKendraLCOElevelizedcostofelectricityMERCMaharashtraElectricityRegulatoryCommissionMGSIPAMahatmaGandhiStateInstituteofPublicAdministrationMNREMinistryofNewandRenewableEnergyMSEDCLMaharashtraStateElectricityDistributionCompanyLimitedMSKVYMukhymantriSaurKrishiVahiniYojanaMWmegawattsMWpmegawattpeakPFCPowerFinanceCorporationPM-KUSUMPradhanMantriKisanUrjaSurakshaevamUtthaanMahaabhiyanPPPpublic–privatepartnershipPSPCLPunjabStatePowerCorporationLimitedPVphotovoltaicRDSSRevampedReforms-basedandResults-linkedDistributionSectorSchemeRErenewableenergyIISD.orgxxiiImplementingSolarIrrigationSustainablyRECrenewableenergycertificatesRESCORenewableEnergyServiceCompanyRMSremotemonitoringsystemRPORenewablePurchaseObligationSEDMSolarEnergyDataManagementSERCStateElectricityRegulatoryCommissionSIAStateImplementingAgencySECISolarEnergyCorporationofIndiaSLBCState-LevelBankingCommitteeSMEsmallandmedium-sizedenterprisesSPVspecialpurposevehicleWEFwater–energy–food1.0IntroductionIISD.org2ImplementingSolarIrrigationSustainablyIn2019,theGovernmentofIndialaunchedamajorschemetopromotesolar-poweredirrigation:thePradhanMantriKisanUrjaSurakshaevamUtthaanMahaabhiyan(PM-KUSUM).Theschemeconsistsofthreecomponentspromotingdifferentdeploymentapproaches:•A–10gigawattsofdecentralizedground-mounted,grid-connectedrenewablepowerplantsonfarmers’land•B–2millionstand-alonesolar-poweredagriculturepumps•C–Solarizationof1.5milliongrid-connectedpumpsundereitheroftwomodels—individualpumpsolarizationorfeeder-levelsolarization(FLS)(SeeFigure1fordetails)Solarizingirrigationhashugepotential.Cost-effectiveandreliableirrigationcansignificantlyimprovefarmerincomesandwell-being.Shiftingawayfromhighlysubsidizedgridelectricitycanrelievefinancialpressureonelectricitydistributioncompanies(DISCOMs)—areviewoftariffordersin17statesandUnionTerritoriesfoundthat75%ofallsuchsubsidiesgotoagriculture(Aggarwaletal.,2020).Furthermore,solarirrigationcanhelpIndiaFigure1.PM-KUSUMcomponentsComponentASettingup0.5–2MWsolarplantsonbarrenanduncultivablelandsoffarmers,allowinganadditionalincomeComponentBOff-gridsolarpumpsforfarmersusingdieselpumpordonothaveaccesstoirrigationComponentCSolarizationofgrid-connectedpumpsforassureddaytimepowerandtoreducesubsidyComponentC(IPS)SolarizationofindividualpumpsinafeederComponentC(FLS)SolarizationofallpumpsinafeederwithsolarpowerplantsatthesubstationlevelIISD.org3ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingshifttocleanenergy,reducingairpollutionandgreenhousegasemissions.Atthesametime,caremustbetakentoimplementitsustainably.Therearecomplicatedinterconnectionsbetweenwater,energy,andfood—oftencalledthe“water–energy–foodnexus”orWEFnexus—whereinterventionsinoneareacancauseunexpectedimpactsinanother.ThisguidebookhasbeendevelopedincooperationwiththeMinistryofNewandRenewableEnergy(MNRE).Itisdedicatedtosupportingstatepolicy-makersandagenciesinsustainablyimplementinggrid-connectedsolarpoweratasubstationlevel,thereby“solarizing”thesupplyusedbyfarmersconnectedtothesubstation.Werefertothisas“decentralizedsolarpowerplantsforirrigation,”whichincludescomponentsAandC(FLS)ofPM-KUSUM.GiventherelativelackofexperiencewiththesemodelsinIndia,weaimtobringtogetheressentialguidanceonimplementingthemeffectively.Wealsoexaminesustainability,identifyingbestpracticesformaximizingsocialoutcomesandgroundwaterresources.Basedonaninitialneedsassessment,thisguidebookcoversthefollowing:1.Context:Whatarethesemodels,andwhataretheirpotentialimpacts?2.Financing:Whatcanstatesdotoreducethecostsoffinancing?3.Implementationdesignandcoordination:Howcanspecificinter-andintra-departmentalcoordinationmechanismsimproveoutcomes?4.Learningbydoing:Whilestatesprioritizeimmediatedeployment,howcantheyintegratepilotsofinnovativeapproachesformaximizingsustainabilitytoinformongoingimprovements?Asaguidebook,thispublicationisbasedonthebestavailableevidence,butitisnotaresearchpaper.Wefocusonpracticalsuggestionsforstatepolicy-makersandimplementingagencieswithillustrativeexamples,drawingonacombinationofsecondaryandprimaryresearch,including:•Reviewsofexistingpolicyresearchliterature•32in-depthinterviewswithstateandcentralofficials,financiers,andpolicyexperts•CasestudiesonstateschemesinMaharashtraandPunjab(seeAppendix)•Abackgroundpaperonagrivoltaicsbasedonliteraturereviewandstakeholderconsultations(providedasasupplementarytothisguidebook)•Variousmultistakeholderroundtableswithpolicy-makersandexpertsonsolarirrigationThisguidanceisfocusedonlyoncomponentsrelatedtodecentralizedsolarpowerplantsforirrigation.Itisintendedtodirectlyassiststatepolicy-makerswithimplementingPM-KUSUMandberelevantforanysolarirrigationscheme,includingfuturepoliciesoncePM-KUSUMiscompleted.Forguidanceonotherformsofsolarirrigation—stand-aloneandgrid-connectedpumps—seeourseparateguidebookImplementingSolarIrrigationSustainably:AGuidebookforStatePolicy-MakersonMaximizingtheSocialandEnvironmentalBenefitsFromSolarPumpSchemes,publishedin2021.2.0Context:TheWhy,How,andImpactsofDecentralizedSolarPlantsIISD.org5ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoing2.1WhyDoestheContextMatter?Inpreparingthisguidebook,consultationsfoundthatmanystakeholdersareunfamiliarwithdecentralizedsolarplantsforirrigation.Recurringquestionsincluded:WhatisthedifferencebetweenthetwomainPM-KUSUMcomponentsthatcansupportthistechnology?Whatarethebenefitsforfarmers,states,andDISCOMs?Andwhataretheimplicationsforsustainability?Understandingthesequestionsiscriticaltoensurethatschemesalignwithstateobjectivesandmaximizesocialandenvironmentalbenefits.2.2WhatAretheMainDifferencesBetweenPM-KUSUMComponentsAandC(FLS)?Adecentralizedsolarplantismuchsmallerthantypicalgrid-scaleplantsbutmuchlargerthanatypicalhouseholdrooftopsolarorasolarpumpandislocatedclosetofinalconsumers,nearthedistributionsubstation.Theexactsizedependsondemandinthesubstationbutistypicallyintherangeofafewhundredkilowattstoafewmegawatts.Beingclosetoconsumers,itoffersthemmorereliablepowerwhilereducingcostsbyminimizingdistributionlosses.Ifthegenerationisevertoolowtomeetdemandfully,thesubstationcandrawpowerfromtheFigure2.ObjectivesofdecentralizedsolarpowerandhowtheylinktoPM-KUSUMSource:Authors’diagrambasedonMNRE,2019,2020.Note:Agriculturefeedersreferstoelectricitydistributionfeedersexclusivelysupplyingtoagriculturalconsumers.Increasingproductiveuseoffarmers’landSettingupdecentralizedsolarplantsonfarmers’landcanincreasetheirincomesbysellingpowertotheelectricitygridandearninglandleaserent.AddressingirrigationpowerneedsSolarizingagriculturalfeederscanprovidedaytimepowersupply,alongstandingdemandfromfarmers.Statescanalsolowertheiraveragesupplycoststhroughdecentralizedplants,reducingsubsidies.ComponentAToenablefarmerstoearnadditionalincomebysettingupdecentralizedsolarpowerplantsontheirlandComponentC(FLS)ToenablestatestosolarizeagriculturefeedersthroughdecentralizedsolarpowerplantsDecentralizedsolarpowerplantsIISD.org6ImplementingSolarIrrigationSustainablygrid.Ifthegenerationistoohigh,powercanbefedbackintothegrid.ThePM-KUSUMschemecansupportsolarirrigationinseveralways,eachwithacorrespondingschemecomponent.DecentralizedsolarplantscanbesupportedundercomponentAandthefeeder-levelsubcomponentofC,whichwerefertothroughoutthisguidebookas“C(FLS).”Themostup-to-datePM-KUSUMguidelinescanalwaysbefoundontheMNREwebsite.Thetwocomponentsareconceptualizedwithtwodifferentobjectives.Figure2summarizesthetwomajorobjectivesandhoweachonelinesupwithdifferentcomponentsofPM-KUSUM.Despitethisdifferenceinthetwocomponents’objectives,acommonoutcomefrombothcomponentsinvolvessettingupadecentralizedsolarpowerplantneardistributionsubstations.Hence,thereisan1MNRE'sguidanceconcerningsituationswherebothcomponentsoverlapcanbeaccessedhere.overlapbetweenthetwocomponents,asillustratedinFigure3.Tomakeitclearerforthereader,Table1comparesandcontraststhedesigndifferencesbetweenAandC(FLS).Astategovernment’sprimarypolicyobjectivecanhelpdeterminewhichcomponentofPM-KUSUMisbesttopursue.Itshouldbenotedthattheseobjectivesarenotmutuallyexclusive—inmanyinstances,PM-KUSUMwilldeliveruponbothofthem.Butinmostcases,prioritizingonecanhelpdrivedecisionmaking.Inareaswheretheyoverlap,itmakesfinancialsenseforstatestooptforComponentC(FLS),asitoffersmorecentralfinancialassistance.1Statescanalsodecidetoprioritizebothobjectives,inwhichcaseitwouldbeappropriatetosettargetsunderbothcomponents.Figure3.AreasofoverlapbetweenPM-KUSUMComponentsAandC(FLS)Source:AuthorsdiagrambasedonMNRE,2019,2020.ComponentC(FLS)ComponentASupportfarmerstosetupplantsontheirlandandearnadditionalincomeSolarizeagriculturalfeedersfordaytimepowerandreducesubsidiesOBJECTIVESTARGETFEEDERSSUBSTATIONSTYPEOFLANDRuralsubstationAgriculturefeedersFarmers’landAnysuitablelandAreasofoverlapIISD.org7ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingTable1.DesigndifferencesbetweenPM-KUSUMComponentsAandC(FLS)DesignfeatureComponent–AComponent–C(FLS)TargetfeedersFeedersinruralsubstationsAgriculturefeedersorfeedershavingmajoragricultureload.Sizeofthepowerplant0.5–2megawatts(MW)Dependsonthetotalloadoftargetfeeders(withrestrictionsonpumpsizeeligibleforcentralfinancialassistanceasdetailedinBox12).OwnershipofthelandPrivateland(farmer-owned)2Privateorpubliclands(ownedbyDISCOMorstategovernments)Centralgov.incentivesPerformance-basedincentiveofINR0.40perkWhforthefirst5years30%capitalsubsidyofthepowerplantcosttobeprovidedover10years.Source:MNRE,2019,2020.2Theschemeprimarilytargetsuncultivablebarrenlands.Butcultivablelandcanbeusedwithsolarplantsinstalledonstiltsallowingagrivoltaics(seeBox1).Box1.Agrivoltaics–ExtendingsolarplantstocultivablelandsunderPM-KUSUMAandC(FLS)Solarpowerplantsrequirearelativelylargeamountoflandsurfaceareatogeneratesignificantquantitiesofelectricity.Thisfactraisesconcernsaboutcompetitionbetweenlandforsolarpowergenerationandlandforfoodproduction(Nonhebel,2005).Agrivoltaicsrepresentsaninnovativesolutiontothisproblem.Withthispractice,asolarpowerplantshareslandwithcrops,increasingthenetvalueofoutputfromtheland.Cropsarecultivatedbelowthepanelsorbetweenthem.Agrivoltaicsisarelativelynewpractice.PM-KUSUMComponentAisthefirstnationalschemetosupportit.Theschemeguidelinesstipulatethatfarmerscansetupapowerplantoncultivablelandaslongasthephotovoltaic(PV)panelsareinstalledonaraisedplatformsupportedbystiltswithadequatespacingbetweenpanelrows(MNRE,2019).ComponentC(FLS)onfeeder-levelsolarizationalsoenablestheconstructionofdecentralizedsolarpowerplants.Itdoesnotexplicitlyrefertoagrivoltaics,butthereisnorestrictionforimplementingagenciestoexploreagrivoltaicsunderthiscomponentaswell.Adetailedbackgroundpaperontheprospectsandchallengesofagrivoltaicsisincludedasasupplementtothisguidebook.IISD.org8ImplementingSolarIrrigationSustainablyDuetotheoverlapsbetweenthetwocomponents,muchoftheadviceinthisguidebookcanapplytobothcomponents.Inthesubsequentsections,wewillreferto“PM-KUSUM”forbothcomponents.OnlywhenlearningsareexclusivetoonecomponentwillAorC(FLS)beexplicitlymentioned.2.3HowDoFarmersBenefitFromSolarizingAgriculturalFeedersUnderPM-KUSUM?UnderComponentAofKUSUM,themainbenefitforfarmersisclear:theyeitherdevelopandownthedecentralizedsolarpowerplantandearnanadditionalrevenuestreamfromitsoperations,ortheyleaseouttheirlandtoadeveloperandreceiveincomeasashareofthatdeveloper’sprofits.UnderComponentC(FLS)ofKUSUM,themainbenefitforfarmersisanimprovedpowersupplyforirrigation.UnderComponentA,animprovedpowersupplyisalsolikelytobecreatedinadditiontorevenuebenefits.Thefulladvantagesofanimprovedpowersupplyarenotasself-evidentasanewincomestreamanddeservefurtherexplanation.Therehavebeengreatstridesinrecentyearstoimproveenergyaccess,witharound59%ofIndia’slandholdingsin2021nowusinggridelectricityforirrigation(MinistryofAgricultureandFarmersWelfare,2021).Nonetheless,manyfarmersstillexperiencealow-quality,erraticpowersupplywithproblematictiming.IISD.org9ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingFigure4.ImpactonqualityofpowersupplyFigure5.Impactontiming,duration,andpredictabilityofthepowersupply⚠PROBLEMVoltagelevelsinagriculturefeedersareoftenbelowthestipulatedgridcode.Thiscausesfrequentpumpburnoutsthatcancostthefarmermorethantheelectricitybill(WorldBank,2001).wrenchSOLUTIONAdecentralizedsolarpowerplantprovidesvoltagesupporttothetargetfeeders.Simulationsbasedonreal-worldfeederparametersshowthatanappropriately-sizedsolarplantconnectedtofeederscanbringthevoltagetostandardlimits(Bharadwaj&Tongia,2003;Sri&Narasimham,2012).However,itisimportanttonotethatthequalityofthepowersupplyispredominantlydeterminedbytherobustnessofthedistributioninfrastructure.Adecentralizedpowerplantcan,atbest,playasupportingroleinimprovingthequality.⚠PROBLEMMoststatesscheduleagriculturalpowersupplyforoff-peakhours,includingnighttime,eitherpermanentlyorthroughrostering,whichhelpsbalancedemand.Somestatesrestricttheirpowersupplyto4–5hoursdaily.Often,thesupplyisnotpredictable.Manyfarmersuseauto-switch-onmechanismsduetotheintermittencyofpower,leadingtowaterwastage.Furthermore,irrigatingatnighttimeisoftenhazardous.Onesurveyshowsthat19%ofagricultureconsumersfacedelectricity-relatedaccidents(Balietal.,2020).Powersupplyatnightalsodisproportionatelyimpactswomenduetosafetyconcerns.wrenchSOLUTIONWithPM-KUSUM,farmerswillgetupto10hoursofdaytimepowersupply—alongstandingdemandfromfarmers.Thecoincidenceofsolarpowergenerationwithirrigationrequirementsmakesagriculturesuitableforsolarizing.Improvedpredictabilityofpoweravailabilitymightleadtobetterirrigationmanagement,improvedagriculturalproductivity,andfeweraccidents.However,theover-exploitationofgroundwaterisalsoakeyriskwithincreasedenergyaccess.WediscussthisindetailinSection4.2.3.IISD.org10ImplementingSolarIrrigationSustainably2.4HowDotheStatesandDISCOMsBenefitFromPM-KUSUM?Inadditiontofulfillingsocialobligationstofarmersandcontributingtocleanenergytargets,PM-KUSUMalsosavesfinancialcostsforstatesandDISCOMsbyreducingdirectsubsidiesandcross-subsidies.Thesavingsforstatesprimarilyarisefromthefollowingfactors:wrenchReductioninPowerPurchaseCostTheaveragepowerpurchasecostfromnon-REsourcesacrossthecountryisINR3.85perunit,andagriculture-intensivestatesareevenhigher(CentralElectricityRegulatoryCommission,2021).Incomparison,theceilingtariffinMaharashtra’ssolarirrigationscheme,theMukhyamantriSaurKrishiVahiniYojana(MSKVY),whichhadthemostsuccessinthedecentralizedsolarpowerplantmodel,isINR3.30perunit.Thisisonlyasuperficialcomparison,astheactualpowerpurchasecostfromnon-REsourcesforagriculturefeedersislikelysomewhatlowerthanINR3.85perunitsincepartofthesupplyhappensduringoff-peakdemandhours.However,thesignificantdifferencebetweentheaveragecostofsupplyandtheceilingtarifffromdecentralizedsolarschemesshowsaclearcaseforstatestoexplorePM-KUSUM.?But…won’tshiftingthepowersupplytothedaytimeaffectloadmanagement?Manystatessupplypowertoagriculturefeedersatnighttobalancethepeakload.StudiesshowthatthisbenefitsDISCOMsbyreducingaround5%ofthetotalcost(Khanna,2021).However,thisstrategyisonlyoptimalforthecurrentenergymix,inwhichthermalpowerplantsdominate.AsIndiaachievesahigherrenewableenergy(RE)share,asperitsstatedenergypolicytargets,shiftingtheagriculturesupplytodaytimewill,infact,improveloadmanagement.AccordingtotheInternationalEnergyAgency(IEA)(2021),theagriculturedemandshiftisthemostcost-effectivewayofachievinghigherpowersystemflexibilityforREintegration(IEA,2021).ItwillalsohelpreducefutureREcurtailmentsinhigh-RE-sharescenarios(Khanna,2021).Bykickstartingthisshift,PM-KUSUMcangivestatesagreatheadstartinachievingtheirREtargets.Karnataka,thestatewiththehighestrenewablesinitsenergymix,hasdecidedtoshiftmuchoftheagriculturalpeakloadtodaytimetocoincidewithsolargeneration("BescomMapsOut,"2019).IISD.org11ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingwrenchReductioninTransmissionandDistributionLossesPM-KUSUMcanhelpstatestoreducetransmissionanddistribution(T&D)losses.PowerutilitiesincurT&Dlosseswhenpowerissentfromgenerationstationstothedistributionsubstation.ThisincludeslossesattheCentralTransmissionUtilitylevel,StateTransmissionUtilitylevel,andthe33kVlevelwithinthedistribution.InFY2019,averageT&DlossesinIndiawere20%ofthetotalpowergenerated(CentralElectricityAuthority,2022).Itshouldbenotedthatmostofthelossesoccuratvoltagesbelow11kVandarenotavoidedthroughthePM-KUSUMpowerplant.Theyareprimarilyduetoalackofpropermaintenanceandcanonlybeaddressedthroughsustainedinvestmentininfrastructure.Nonetheless,duetobettervoltagesupport,PM-KUSUMpowerplantscanreducesomelossesatthe11kVlevel(Bharadwaj&Tongia,2003).wrenchReductioninTransmissionCapacityRequirementsAselectricitydemandincreases,utilitiesmustconstantlyupgradetheT&Dcapacity,includingreplacingtransformersandload-tap-changermaintenance.DISCOMsusuallyincurthesecostsastransmissionchargesandmaintenancecosts.Utilitiescansavebydeferringtransmissionrequirementsandcapacityupgradesifagricultureconsumersmoveawayfrom?But…wegetpoweratalowcostfromautility-scalesolarplantatthestateperiphery.WhygofordistributedplantsunderPM-KUSUM?Therearetworeasonstoconsiderdecentralizedsolarplants.First,utility-scaleplantshavegrowthlimitsduetolandrequirementsandenvironmentalandsocialimpactconcerns.Asdemandincreases,decentralizedplantshavearoletoplay.Second,somecostadvantagesarisefromtemporarypoliciessupportingcleanenergy.Forexample,theinterstatetransmissionsystem(ISTS)waiver,whichexemptsrenewablesfromISTSchargesandlosses,discountsthecostofcarryingpowerfromutility-scalepowerplantstotheconsumer.?But…mystatealreadyhasexcesscontractedcapacity.WillweenduppayingafixedcostforthesurpluscapacityifwestartPM-KUSUM?Statescansavethevariablecost(energycost)componentoftheirpowerpurchasefromDay1.Forthesavingsonfixedcost(capacitycost)tokickin,thestatesmustincludethePM-KUSUMintheirpowerpurchaseplanning.Cost-benefitanalysisshowsthatevenifstatesconsidersomeyearsofwaitingperiodfordemandtoexceedcontractedcapacity,thereisabenefitfromPM-KUSUM(Rahmanetal.,2021).IISD.org12ImplementingSolarIrrigationSustainablyconventionalpowersources.Astudyona500-kWpowerplantinCaliforniaconnectedtoa12kVruralfeedershowedareductioninsubstationtransformertemperature,anincreaseincapacity,andanextensionofload-tap-changermaintenanceintervalby10years(Farmeretal.,1995).wrenchReductioninCostofCreatingPowerSystemFlexibilityPowersystemflexibilityisvitalforintegratingREduetoitsvariablenature.Astheshareofrenewablesinthegridincreases,thegridbecomesunstable.Indiaandmanystateshavesetambitiousrenewabletargets.Toachievethesetargets,DISCOMswillhavetoinvestinsystemflexibilitysolutionslikebatteryenergystorageservice,pumpedhydrosystems,andsoon.However,studiesshowthatshiftingagriculturalloadtocoincidewithsolargenerationisthemostcost-effectivesolutionforachievingpowersystemflexibility(IEA,2021).PM-KUSUMpavesthewayforachievingthiscoordinationeffectively.wrenchFulfillingaRenewablePurchaseObligationTheElectricityAct(2003)mandatesStateElectricityRegulatoryCommissions(SERCs)tospecifyaminimumpercentageoftheDISCOM’stotalpowerpurchasetobefromrenewablesources.Thisiscalledarenewablepurchaseobligation(RPO).Accordingly,SERCshaveprescribedRPOsforrespectiveDISCOMs.IfaDISCOMcannotfulfilltheobligation,itneedstobuyRenewableEnergyCertificates(RECs)tocovertheshortfall.ThepowerpurchasedfromthePM-KUSUMpowerplantcancounttowardtheDISCOM’sRPOobligation.IfaDISCOMexceedsRPOtargets,itcanissueRECcertificatescorrespondingtotheexcessgenerationandsellthemintheRECmarket.Thusinbothscenarios,PM-KUSUMsolarplantsbenefittheDISCOM.wrenchEmploymentImpactsApartfromthesedirectimpacts,thereisalsothebenefitofgeneratingjobsinruralareas.SmallersolarplantsgeneratemorejobsperMW.Studiesshowthatrooftopsolarcreates24.72full-timeequivalentjobsperMW,whileasizableutility-scalepowerplantcreates3.45full-timeequivalentjobsperMW(Kuldeepetal.,2017).Thesignificantlyhighernumberofjobs?But…agriculturalloadfluctuatesalotwithinayear.Outsideirrigationperiods,mostpowerwillneedtoflowupstream.Won’titcausecongestionandlosses?Thisisavalidconcernformanystates,especiallyirrigation-intensivestates.Athighpenetrationlevelsofdecentralizedsolarpowerplants,thelossesincrease,whichcanleadtotransmissioncongestion(Jadhavetal.,2020).Thekeyisintargetingandtheoptimalsizingofpowerplants.Notallfeederscanbesolarizedunderthescheme.Thesizingofthepowerplantinanysubstationshouldconsiderthebaseloadthroughouttheyear(seeSection3formoredetails).IISD.org13ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingforrooftopsolarcomefrombusinessdevelopment,design,andconstructionphasesduetothesmallsizeofindividualprojects.PM-KUSUM’sjobcreationpotentialwouldlikelylieclosertothatofautility-scalepowerplant.However,unliketheutility-scalepowerplants,thejobpotentialiswelldistributedgeographically.Thereisalsotheaddedadvantageofdiffusionoftechnicalcapacitytoremoteareas.?So…doesthismeanpurchasingpowerfromadecentralizedsolarplantisalwaysmorebeneficialthanfromaconventionalpowerplant?Notnecessarily.Althoughdecentralizedsolarplantsprovidethebenefitsmentionedabove,itisimportanttonotethatsolarpowerisvariableandinfirm.Thisposesgrid-integrationcosts.DISCOMscanonlycapturethecostsandbenefitsaccuratelybyundertakingadetailedsubstationstudy.ThisisfurtherelaboratedinSection3.3.2.5HowDoSolarizedAgricultureFeedersImpacttheWEFNexus?Solarizingafeederisanenergy-accessintervention.However,energyhascomplexinterlinkageswithwaterandfood—aconceptcalledthewater–food–energynexus.Thismeansthataninterventioninoneareathatcanimpactothersinmultipleways,affectingthePM-KUSUMscheme’ssustainability.Sincefeedersolarizationisarelativelynovelapproachwithveryfewreal-worldpilotstudies,theseinterlinkagesarepoorlyunderstood.Butitcertainlyhelpstosetthecontextbasedontheexperiencesandstudiessofarsothatthestatepolicy-makerscantakeappropriatemitigationandmonitoringmeasures.2.5.1HowDoDecentralizedSolarPlantsAffectWaterMarkets?Manyfarmers,especiallysmallandmarginalfarmers,dependoninformalwatermarketstofulfilltheirirrigationneeds.Theybuywaterfromfarmerswithelectricconnections.Thebasisforthesetransactionsisquitediverse—somearebasedpurelyonkinship,someonhourlyrentorrentforareairrigated,andothersonsharingtheharvest.Anychangeinthecostandsupplyofpowercanindirectlyaffectsuchmarkets.Itcancreatebenefits:itcanhelpwatersellerstopotentiallyincreaserevenuesfromthesaleofwaterandbenefitwaterbuyersduetomorereliableandtimelyelectricitysupply.Itcanalsoleadtocosts:forexample,adisruptionintheexistingwatermarketandthedepletionofgroundwatertables.Currently,noreliablenationaldataletsusgeneralizehowsolarirrigationaffectslocalwatermarkets.Aspartoflargermonitoringandevaluationmechanisms,policy-makersareencouragedtointerviewfarmersingeographicareaswheresolarirrigationisbeingtargetedbeforeandaftertheintroductionofdecentralizedplants.IISD.org14ImplementingSolarIrrigationSustainably2.5.2HowWillSolarizingFeedersImpactGroundwaterSustainability?GroundwaterdepletionisamajorchallengeforsustainableirrigationinmanypartsofIndia.Thehighlysubsidizedpowertoagricultureconnectionsprovideslittleincentiveforfarmerstoadoptwater-efficientpractices.Lowgroundwaterlevelsincreaseenergydemandforirrigationanddepriveeconomicallydisadvantagedfarmersofaccessingirrigation,astheywon’tbeabletoincreasepumpsizeregularly.Amongtheexpertsinterviewedtopreparethisguidebook,wefoundnoconsensusonhowdecentralizedsolarpowerplantswillaffectgroundwaterlevels.Thelimitednumberofpilotstudiesalsomeansthatthereisrelativelylittleevidencetorelyupon.Basedoninterviews,however,wehaveidentifiedsomeguidingquestionsthatcanhelpstatesassesstheriskofgroundwaterimpacts:1.Doesthedurationofthepowersupplyincreaseasaresultofthedecentralizedsolarpowerplant?2.Ispowersupplythemainconstraintforgrowingmorelucrativebutwater-intensivecrops?3.Doesthehydrogeologyinthefeederareasupportmorewaterextraction?Thequestionabouthydrogeologydeservesattentionbecauseitistheleastunderstood.Aquiferscanbeunderstoodusingthe“bathtub”vs.“eggcarton”analogy(Beattie,1981).The“bathtub”analogyreferstoawell-connectedaquifersystemspreadoveralargearea,actinglikeagiantbathtub.InIISD.org15ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingsuchaquifers,achangeinwaterlevelsisverygradual,andtheimpactofpumpingandrainfallisonlyvisibleoverseveralyears.Incontrast,an“eggcarton”analogyisanaquiferthatissmall,unconnected,andmuchmoresensitivetochangesinpumpingandrainfall.Inthecaseofbathtub-typeaquifers,farmersarelikelytoseewaterasanunlimitedresourceandextractasmuchaspossible,withnoincentivetoconserve.Witheggcarton-typeaquifers,thereisaclearandquickerfeedbacklinkbetweenwaterreservesandpumpingactivity,soanincreaseinenergyaccessisunlikelytotriggerasignificantincreaseingroundwaterconsumption.Inreality,thetypeofaquiferissomewherebetweenthesetwoanalogies.Ingeneral,however,largepartsoftheIndo-Gangeticplainsandcoastalrivervalleysbehavemorelikebathtubaquifers,whilethepeninsularhardrocksofwesternIndiabehavemorelikeegg-carton-typeaquifers(Srinivasan,2022).Manypartsofthepeninsularplateaualreadyfaceseasonalwaterdepletion.Insuchcases,energyisnottheconstrainttoexpandingirrigation.Iftheansweris“yes”toalloftheabovequestions,thenthereisareasonablechancethatwaterconsumptionwillincrease.OneclearindicationistheoutcomeoftheSuryaRaitaprojectinKarnataka,whichshowedanincreaseinwaterabstractionafterschemeimplementationintheabsenceofanyincentivemechanismtoconservewater(seeBox2).Insuchcases,policy-makersareencouragedtoensurethatwaterimpactsarewellcoveredbylargermonitoringandevaluationmechanisms,particularlyinthefirstwavesofdeployment,bothbeforeandaftertheintroductionofdecentralizedplants.Thefeedbackfromsuchassessmentsshouldguidefuturedeploymentsinthestateorregion.Statescanalsoexploreconvergenceopportunitieswithmeasuresforimprovingtheenergyefficiencyofpumpsetsandeffortstopopularizewater-efficientpractices,whicharedetailedinSection4.2.3.Box2.Improvedelectricityaccessleadingtoincreasedwaterconsumption:TheSuryaRaitaschemeUndertheSuryaRaitascheme,Karnatakastatesolarizedabout300pumpsinonefeederonapilotbasis.TheschemewassimilartoPM-KUSUMComponentC(FLS).However,thestatecouldnotpaythefeed-intariffasplanned.Theonlybenefitforfarmerswastheincreasedhoursofpowersupply,withoutanyincentivetoconservewater.Astudyoftheschemeestimateda1.77timesincreaseinfarmers’waterconsumptionduetoincreasedelectricityaccess.Manyfarmersshiftedtomulberrycultivation,awater-consumingbutmuchmoreremunerativecrop.Althoughthiswasageneraltrendinthearea,thisshiftincropchoicewasmuchhigheramongbeneficiaryfarmers,indicatingthattheincreasedelectricityaccesscatalyzedthetransition(Durgaetal.,2021).IISD.org16ImplementingSolarIrrigationSustainably2.5.3ShouldStatesIntroduceIncentiveMechanismstoAddressGroundwaterConcerns?Thesustainablelong-termsolutiontoaddressgroundwaterdepletionconcernsisintroducingcost-reflectivepricingforelectricityuse.However,farmenergyishighlypoliticized,andfarmersinseveralstateshaveresistedanyattemptstointroducemetering.Intervieweeshighlightedthepoliticalsensitivityoftheissue.Theysuggestedthatstatesshouldexploreothermechanismstoaddressthechallengegiventheprevailinggroundwatercrisisinmanypartsofthecountry.PM-KUSUMguidelinesproposeacashtransfermechanismforincentivizingfarmerstoconservegroundwater.Underthismechanism,theDISCOMsetselectricityusagequotasforallfarmersasMinimumEnergySupport.Farmerswhoconsumefewerunitsthantheirquotaareeligibleforacashtransferforthesavedunitsatapredeterminedrate(MNRE,2020).Thereisnopenalty,however,forconsumingabovethequota.Thistypeofmechanismhastwo-foldadvantagesforimplementation.1.Itispurelybasedonincentivesanddoesnotpenalizefarmersforoverconsumption.2.Itdoesnotrequiretheparticipationofallfarmersinafeeder.Interestedfarmerscanoptinvoluntarily;thehighertheparticipation,thebetterthelikelihoodofimprovedoutcomes.Thesefactorsmakeiteasiertomitigatethepoliticalchallengesofmetering.Onlyinterestedfarmersneedtobemeteredonavoluntarybasis.Thismechanismis,however,notyetwidelytested.Theonlylarge-scaleimplementationwasinPunjabunderthestategovernment’sPaniBachaoPaisaKamao(PBPK)scheme(seeBox3).Therearemultiplechallengesintheimplementationofthisdesign.WehaveelaboratedontheminthesubsequentsectionsandthecasestudyofPBPKintheAppendix.However,threekeydesignchallengesareworthhighlightingupfront:•Fixingthequotaforfarmers:Intheory,thequotasetforfarmersshoulddependonthenaturalrechargeratesofthelocalaquiferstoensurewaterwithdrawalissustainable.However,thisisimpracticaltoimplement,asfarmerswilllikelyoptoutoftheschemeifthequotaissetmuchlowerthantheirprevailingconsumption.Amorepracticalapproachistofixaquotanearertofarmers’currentlevelsofconsumption.However,assessingthebaselineconsumptionischallengingsincethetargetedconnectionsareunmetered.AnEnergySectorManagementAssistanceProgramstudyproposessettingthequotabasedontheconnectedload(sizeofthepump)orthesizeofthelandholding(Gulati&Pahuja,2015).UnderthePBPK,anaveragemonthlyelectricityquotabasedonthepumpmotorcapacitywasfixedforeachagriculturefeeder(SeeSection5.3.1).•Participationfromtenantfarmers:Inareaswhereasignificantnumberoffarmerscultivateonleasedland,stateswillhavetoadoptinnovativesolutionstoensuretenantfarmers’participation.UnderPBPK,thegovernmentenabledcashtransferdirectlytothetenantfarmersaftertheenrolmentofthelandowner(SeeSection5.3.1).IISD.org17ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoing•FinancialandcapacityburdenonDISCOM:ThesuccessofadirectincentivemechanismreliesonseveralinitiativestobeundertakenbyDISCOMs,includingfeederseparation,gridupgradingtoensuredaytimepowersupplytofarmers,outreachandawarenesscampaigns,monitoringandvigilancetopreventfarmersfromusingmultiplepumpsortobypassmeters,thepurchaseanduseofinnovativeITtools,andtimelypaymentsofwaterincentivestofarmers.GiventheprecariousfinancialsituationofmanyDISCOMsinIndia,dedicatedbudgetaryfundingfromstatesandthesupportofexternalknowledgepartnerswillbeessentialfortheinitiative’ssuccess.UnderthePBPKscheme,thestateallocatedINR40crore(~USD5million)fromtheagriculturesubsidybudget,ofwhichINR5crorewasreimbursedtotheDISCOM,PunjabStatePowerCorporationLimited(PSPCL),fortheschemeimplementation(MahatmaGandhiStateInstituteofPublicAdministration[MGSIPA],n.d.).Inaddition,knowledgepartnersliketheWorldBank,AbdulLatifJameelPovertyActionLab–SouthAsia(J-PALSA),andTheEnergyandResourcesInstitutesupportedthescheme’simplementation.ItisworthnotingthatlearningsfromPunjabmaynotbeapplicabletootherpartsofthecountry.Indeed,apilotstudyconductedinGujaratthattrialledelectricity-linkedincentivesforfarmersresultedinhighenrolmentformeteringbutnoimpactonwaterconsumption(Fishmanetal.,2016).Henceitiscriticaltocontextualizethelearnings.Section3exploresinmoredetailhowtopilotsuchmechanismsandsummarizessomefindingsinthisregard.It?But…inourstate,farmersgetelectricityalmostforfree.Wouldn’tprovidinganadditionalincentiveincreasethefinancialburdenonthestategovernment?Notnecessarily.Althoughthestateisincentivizingthefarmer,itssubsidyburdencanbereducedwiththerightschemedesign.Forexample,supposeafarmerconsumesabout4,000kWhannually,andthestateannouncesanincentiveofINR3perkWhsaved.Ifthefarmerreducestheirconsumptionto3,500kWhayear,thestategovernmentwillincuracostofINR1,500fortheincentive.Butitalsosavesthecostofbuyingandservicing500kWhofpowertothefarmer.ConsideringtheaveragecostofsupplyofaboutINR6.5perkWh,thesavingsamounttoINR3,250.ThestatethussavesaboutINR1,750perfarmerannuallybyprovidingtheincentive,whichcouldovercomethecapitalandoperationalcostofimplementingtheschemeoveraspecifictimeperiod.Theaboveexampleisjustforillustrativepurposes.Theactualbenefitwillvarybasedontheprevailingtariffforagriculturalconnections,subsidyamount,andtheactualcostofservicefortheDISCOM.Inaddition,theutilitywillneedtoestablishtherightbaselineforindividualfarmers,whichischallenginggiventheabsenceoffarm-levelmetering.Statesalsoneedtoconsiderthescheme’scostandanalyzeitseconomicimpactforeachDISCOM.IISD.org18ImplementingSolarIrrigationSustainablyisalsoworthreiteratingthatevenifprovensuccessful,adirectincentivemechanismmaynotbeasubstituteforcost-reflectiveelectricitypricinginthelongrun.Further,thereareothermechanismsforachievingenergyefficiencyandloadreduction.SomeoftheseareoutlinedinSection3.Box3.ThePaniBachaoPaisaKamaopilotexperienceinPunjabThePunjabgovernment,inconsultationwiththeWorldBankandJ-PALSA,implementedaninnovativepilotschemein2018toaddressthechallengeoftheover-withdrawalofgroundwaterintheagriculturesector.ThePBPKor“Savewater,earnmoney”schemeprovidesadirectincentivetoparticipatingfarmerstoconserveelectricitywithinastipulatedlimitandtherebyconservegroundwater.Theschemeaimstosolvetheinterlinkedchallengesofrapidlydepletinggroundwatertablesandthegrowingfinancialdebtofelectricityutilities.Theschemewasvoluntaryanddidnotincludeapenaltyforconsumptionoverthestipulatedquota.Itreliedontheinstallationofsmartmeterstomonitorfarmers’electricityconsumption.Powersupplytotheconsumerswasshiftedtothedaytimefor8hoursdurationduringthepaddyseasonand3–4hoursfortherestoftheyear(AsianDevelopmentBank,2020).Thefirstphaseofthepilotschemeachieveda33%enrolmentamongthetargetedfarmersinsixfeeders(MGSIPA,n.d.).tThesecondphaseofthePBPKpilotwasdisruptedbytheCOVID-19pandemic,whichledtoonly4%ofthetargetedenrolmentin250feeders.AstudycarriedoutbytheInternationalWaterManagementInstitute(IWMI)foundthatthecombinationofdaytimeelectricityprovisionandcashincentivesforunusedelectricityhasthepotentialtoincentivizefarmerstoreduceelectricityconsumptionandirrigationhoursbyatleast7.5%andupto30%,withoutaffectingpaddyyields(Mitraetal.,2022).Interviewswithimplementingofficials,however,suggestthatmoredataisrequiredbeforeanydefinitiveconclusionsaredrawnregardingthescheme’simpactonelectricityandgroundwaterconsumption.Althoughcropdiversificationwashighlightedasanobjectiveintheschemeguidelines,consultationswithagriculturalexpertsrevealedthatitwasnotaprioritygiventheassuredincomethatfarmersreceivefrompaddycultivation(PSPCL,2022).IISD.orgSECTIONSUMMARY19SectionSummaryThissectiondeconstructsthedecentralizedsolarplantmodelforsolarizingruralfeedersanditspotentialimpact,includingbenefitstodifferentstakeholders—farmers,DISCOM,andthestategovernment—andimpactonthewater–energy–foodnexus.DecentralizedSolarPlantsAdecentralizedsolarplant,underPM-KUSUMComponentsAandC(FLS),hasamuchsmallercapacitythanagrid-scalesolarplantbutmuchlargerthanatypicalhouseholdrooftopsolarsystem,islocatedclosetothefinalconsumers,andisconnectedtoadistributionsubstation.ComponentsComponentsAandC(FLS)aredesignedwithverydifferentobjectives,butthetwomayoverlapundercertaincircumstances.Astategovernment’sprimarypolicyobjectivecanhelpdeterminewhichComponentofPM-KUSUMisbesttopursueinaspecificregion.Figure3(duplicate).AreasofoverlapbetweenPM-KUSUMComponentsAandC(FLS)ComponentC(FLS)ComponentASupportfarmerstosetupplantsontheirlandandearnadditionalincomeSolarizeagriculturalfeedersfordaytimepowerandreducesubsidiesOBJECTIVESTARGETFEEDERSSUBSTATIONSTYPEOFLANDRuralsubstationAgriculturefeedersFarmers’landAnysuitablelandAreasofoverlapIISD.orgSECTIONSUMMARY20SolarizingAgriculturalFeedersSolarizingagriculturalfeederscanprovidemultiplebenefitstofarmersandthestategovernment.Figure6.Benefitsforfarmers,state,andDISCOMinsolarizingagriculturefeedersHowever,themodelisnotwithoutissues.Mostofthesecanbeaddressedthroughbetterawarenessandintelligentschemedesign.Benefitsforstate/DISCOMBenefitsforfarmersImprovedqualityofpowersupply:Distributedpowerplantscanimprovevoltageconditionsandsupportothermeasurestostrengthenthedistributiongrid.Timing,duration,andpredictabilityofpowersupply:Farmerscangetupto10hoursofdaytimepowersupplytoreducethedifficultiesandhazardsoferraticnighttimepowersupply.Reductioninpowerpurchasecost:Thecostofpowerfromadistributedpowerplantistypicallylessthantheaveragepowerpurchasecostofthestate.Reductionintransmissionanddistribution(T&D)lossesandcharges:TheT&Dlossesandchargesuptothe11kVsubstationlevelthatafuturecapacityadditionwouldhaveincurredareavoided.Fulfillmentofrenewablepurchaseobligations(RPOs):IfaDISCOM’srenewablepurchaseisbelowRPOnorms,PM-KUSUMcanreducetheshortfall.TheDISCOMcanissuerenewableenergycertificates(REC)andearnincomeifitisinexcess.Long-termbenefitofpowersystemflexibility:Shiftingagriculturalloadtothedaytimetocoincidewithsolargenerationisthemostcost-effectivestrategyforgridstabilityinthecomingyears.Socialbenefits,includinglocalemploymentgeneration:Distributedsolarplantscanhelpcreatenewgreenjobsthataregeographicallywelldistributed.IISD.orgSECTIONSUMMARY21Table2.ChallengesfacedbyDISCOMsinsolarizingagriculturalfeedersandpotentialsolutionsConcernsSolutionsSeasonalfluctuationinagriculturalloadThekeytoavoidingupstreampowerflowduringthenon-irrigationseasonisoptimaltargetingandsizingofthepowerplant.Sizingshouldconsiderthebaseloadrequirementofthesubstation.Highercostthanutility-scalesolarplantsAlthoughutility-scalesolarplantsoffercheaperpower,theirgrowthhasinherentlimitations,anddecentralizedpowerplantscanplayacomplementaryrole.Further,somecostadvantagesofutility-solarplantsareduetotemporaryincentives,suchastheinterstatetransmissionsystemwaiver.ImpactondailyloadmanagementShiftingagricultureloadtothedaytimeisthemostcost-effectivemeansofloadmanagementastheshareofsolarpowerincreasesinthegrid.StatescanusePM-KUSUMtoplanthelong-termtransitionofagriculturalpowerExcesscontractedcapacityCost-benefitstudiesshowthatevenifittakesafewyearsforthedemandtoexceedcontractedcapacity,thereisabenefittostatesfromPM-KUSUM.Theimpactofsolarizingagriculturefeedersongroundwatersustainabilityandwatermarketsisnotwellstudied.However,pastexperimentsonimprovingelectricityaccessshowthatwhenthelocalhydrogeologyissuitable,andwateristheprimaryconstrainttoincreasingcropproduction,thenthereisastrongpossibilityofincreasinggroundwateruse,reiteratingtheneedforcarefulschemedesign.Cost-reflectiveelectricitypricingisthelong-termsolutiontoaddressgroundwaterconcerns.However,ifstatescannotimplementitduetopoliticalsensitivities,theyshouldconsiderotherstrategiestoaddressgroundwaterconcerns.PM-KUSUMguidelinesofferaframeworkforstatestoconsiderdemand-sidemanagementbyprovidingdirectincentivesforfarmerstostaywithinastipulatedbenchmarkelectricityconsumptionlimit,potentiallypreventinggroundwaterdepletion.Thereareadvantagesandchallengestothismodel.Table3.ProsandconsofdirectwaterincentivesmechanismAdvantagesChallenges•Itisvoluntaryandbasedonincentivesthatmakeitmorepoliticallyfeasible.•Itdoesnotrequiretheparticipationofallfarmersinthefeeder.However,Thehighertheparticipation,thebetterthepotentialoutcomes.•Identifyingtheappropriatebenchmarkconsumptionlimitorquota.•Participationoftenantfarmersduetotheirlackofelectricityconnection.•FinancialandcapacityburdenontheDISCOMtoimplementdirectincentives.IISD.orgSECTIONSUMMARY22FurtherguidanceandresourcesCenterforStudyofScience,TechnologyandPolicy.(2019).DedicatedfeedersforIpsusingsolarbasedgeneration.https://kmea.karnataka.gov.in/storage/pdf-files/Reports%20and%20other%20docs/GoK_Dedicated_Feeders_Final.pdfGulati,M.,&Pahuja,S.(2015).DirectdeliveryofpowersubsidytoagricultureinIndia.EnergySectorManagementAssistanceProgramandSustainableEnergyforAll.https://www.esmap.org/node/55823MinistryofNewandRenewableEnergy.(n.d.).PM-KUSUMwebsite.https://pmkusum.mnre.gov.in/landing.htmlPrayas(EnergyGroup)(Director).(2019,May22).Poweringagricultureviasolarfeeders.[Video]https://www.youtube.com/watch?v=zFoK1CmWRUMPrayasEnergyGroup.(2021,April19).AgriculturesolarfeedersinMaharashtra.https://energy.prayaspune.org/power-perspectives/agriculture-solar-feeders-in-maharashtraRahman,A.,Agrawal,S.,&Jain,A.(2021).PoweringagricultureinIndia:StrategiestoboostComponentsAandCunderPM-KUSUMScheme.https://www.ceew.in/publications/powering-irrigation-system-with-solar-powered-plants-and-grid-pumps-in-india3.0FinancingIISD.org24ImplementingSolarIrrigationSustainably3.1WhyDoesFinancingMatter?Fromadeveloper’sperspective,adecentralizedsolarpowerplantisallaboutitsviabilityasaninvestment.Anyrisksandopportunitiesthataffectaschemearethereforereflectedintheeaseoffinancing.Thissectionusesfinancingasananchortoinvestigateallthechallengesthatcanfaceaninvestmentandpushupcosts—andrecommendsmeasurestoovercomethem.Broadlytherearetwotypesoffinancingforsolarpowerplants:renewableenergyservicecompany(RESCO)andcapitalexpenditure(CAPEX).UndertheRESCOmodel,aprivateactor(afarmeroradeveloper)makesanupfrontinvestmentandsellspowertoDISCOMonapredeterminedtariffforafixedperiod.UndertheCAPEXmodel,theinvestmentisundertakenbyDISCOM.ThePM-KUSUMschemeallowstheRESCOmodelunderComponentAandboththeRESCOandCAPEXmodelsunderComponentC.GiventheextenttowhichDISCOMsacrossIndiaarestrugglingfinancially,moststatesarerelyingontheRESCOmodelforschemeimplementation.OurconsultationsconfirmedthatfinancingisthebiggestchallengetoPM-KUSUMcomponentsondecentralizedsolarpowerplants—developersarenotcomingforwardFigure7.TwomodelsoffinancingsolarpowerplantsCAPEXModelRESCOModelDISCOMDeveloperDevelopersetsupsolarplantDISCOMpaysthecapitalcosttodeveloperquotinglowestpriceProjecttimelineDevelopertransferssolarplanttotheDISCOMDISCOMownsandoperatesthepowerplantSolarplantProjecttimelineDISCOMDeveloperDevelopersetsupsolarplantDISCOMawardsprojectbasedonreversetariffbiddingDeveloperownsandoperatesthepowerplantDISCOMmakesmonthlypaymenttodeveloperSolarplantIISD.org25ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingtotakepartinthescheme.Developersandfinanciersboththinktherisksofdecentralizedsolarplantsoutweighthereturns.Butinvestmentsneedtobemadeviablefortheschemetotakeoff.Therearetwowaystoachievethis:1.Reducetherisksassociatedwithinvestment.2.Increasethetarifftomakereturnsmoreattractive.Increasingthetariffwilldiminishstatebenefitsfromthescheme.Hence,thissectionwillexaminehowstatescanacttoreduceinvestmentriskswhilerecommendingbestpracticesindecidingthetariff.3.2HowCanStatesReduceInvestmentRiskstoPM-KUSUM?Consultationsfoundthreebroadcategoriesofrisksfordecentralizedsolarplants:1.Concernsarisingduetothepoorconditionofthedistributioninfrastructure2.Concernsarisingduetohigheradministrativeandregulatorycosts3.Concernsarisingduetopaymentrisksandpoorcreditworthinessofdevelopers3.2.1WhatAretheMainInfrastructureConcerns,andHowCanStatesReduceThem?Moststateshaveweakgridinfrastructure,especiallyatthedistributionend.Thisresultsintwocriticalissuesaffectingtheeconomicviabilityofsolarpowerplants:gridunavailabilityandvoltagevariation.GridUnavailabilityandVoltageVariationCHALLENGESolarpowerplantsneedalivegridforevacuatingpower.Agridcangoofflineduetofaultsatanypartofthedistributionchain—suchasthepoorqualityofdevices,gridoverloading,andpoorgriddiscipline—buttherateofsucheventsismuchhigheratthelocallevel,closesttoend-users.Utility-scalepowerplantsenjoynearly100%gridavailability,butdecentralizedplantscanfaceamuchmorevariablesituation,withtheexactsituationdifferingfromstatetostate.Ifthedevelopersfactorthisintotheirinvestment,thelevelizedcostofelectricity(LCOE)increases.Anothercloselylinkedissueisthevariationinvoltageatthesubstationbusbar.Thiscanbeduetofluctuationsintheupstreamsystemorlocalizedissues.Severalstudieshaverecordedchronicvoltagefluctuationsatthedistributionsubstation,apointmanystakeholdersreiteratedinconsultations.Solarpowerplantinvertersaredesignedtoshutoffwhenvoltagevariationexceedscertainlimits.Thiscausesgenerationloss,evenwhenthegridislive.Thefrequentvoltagefluctuationsalsoadverselyaffectthelifeofinverters.IISD.org26ImplementingSolarIrrigationSustainablySOLUTIONThesolutiontotheissueisfoundinatwo-prongedapproach:1.ShifttheonusforensuringgridunavailabilitytotheDISCOM:ShiftingtheresponsibilitytotheDISCOMwillallaymuchofthedeveloper’sconcern.Forexample,MaharashtraStateElectricityDistributionCompanyLimited(MSEDCL)(Maharashtra)andJaipurVidyutVitaranNigamLimited(Rajasthan)haveincludeda“minimumgridavailability”guaranteeof98%and95%,respectively.Iftheactualavailabilityislowerthantheminimumguaranteedpercentage,thedevelopersareeligibleforcompensationatapredeterminedrate(MaharashtraElectricityRegulatoryCommission[MERC],2020e).2.Targetedimprovementofthegridinfrastructure:Gridinfrastructureimprovementinvolvesmultipleactivities.Someofthemarecapitalintensive.a.Installationofcapacitorbanksforvoltagesupport:Ruralsubstations,especiallythosewithahighproportionofagricultureconsumers,cansufferfromvoltagedropsduetothelowpowerfactoratwhichinductionmotorsoperate.Capacitorbanksrectifythepowerfactorandimprovethevoltage.b.Feederrestructuringandthebifurcationofoverloadedfeeders:Often,theactualloadonafeederishigherthantheplannedload,leadingtofeedertripping.Thiscanalsoaffectthesubstation.?But…don’tPM-KUSUMguidelinesprovideadequatecompensationprovisionsthroughmust-runstatusandcompensationclauses?Thedraftpowerpurchaseagreement(PPA)inthePM-KUSUMguidelinesmentionsacompensationclauseifthegridisunavailableforreasonsnotattributabletothedeveloper.ItisastandardclauseinmostsolarPPAs.However,inpractice,theonusfallsonthedevelopertoprovethattheyareentitledtocompensation.Inourconsultations,mostdeveloperswerenotconfidentinthismechanism.Developersrecountedinstanceswhenstatesbackeddown,citinggridsecurityasthereason,leadingtolosses.Box4.PM-KUSUM—RDSSschemeconvergenceTheRevampedReforms-basedandResults-linkedDistributionSectorScheme(RDSS)seekstostrengthendistributioninfrastructureusingseveralmeasures.TheschemeprioritizessubstationsdesignatedforPM-KUSUMimplementationtosegregateagriculturefeeders.ManymeasuresmentionedintheindicativelistofDistributionInfrastructureWorksgowellwithPM-KUSUM,includingfeederbifurcation,substationaugmentation,andhigh-voltagedistributionsystems.ThereisalotofscopetomergeplanningforPM-KUSUMwiththeRDSSactionplantoensureanoptimaloutcome.IISD.org27ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoing?But…isfeedersegregationnecessaryforthePM-KUSUMscheme?Feedersegregationhelpsimprovethegridinfrastructure.However,itisnotaprerequisiteforimplementingPM-KUSUM.Specificallyforeachcomponent,thefollowingrulescanbeapplied:1.ComponentA—Thecomponenttargetsruralfeeders(andnotsolelyagriculturefeeders).Henceitcanalsobeimplementedinsubstationswithnon-segregatedfeeders.2.ComponentC(FLS)—Feedersegregationishighlydesirableforthiscomponentbecausetheaimistoonlysupplyagricultureconsumers.However,feedersegregationdoesnotmakeeconomicsenseinmanystates,wheretheaverageagricultureloadismuchsmaller.Insuchstates,mixedfeederscanalsobetargeted.Box5.Virtualfeedersegregation—afreshlookPhysicalsegregationoffeedersisveryexpensive.StateslikeRajasthanandHaryanahaveinsteadtriedout“virtualfeedersegregation,”inwhichthethree-phasepower,suitableforcommercialandindustrialuses,islimitedtocertainhours,restrictingtheuseofmotorpumps.However,theseexperimentsgenerallydidnotachievetheirintendedoutcomes.Thishasbeenattributedtoarangeofchallenges,includinginherentdesignproblems(unbalancedload)andvariousworkaroundsadoptedbyfarmers.ArecentstudybasedonapilotprojectinRajasthanproposesanddemonstratesanewvirtualfeedersegregationmechanismwhereInternetofThingsdevicesattachedtotransformerscontrolthepowersupplyhours(Jethanietal.,2022).Statescanintegratethesedevicesintoexistingtransformersandscheduledifferentsupplytimesforagriculturalandnon-agriculturalconnections.Thecostsinvolvedaremuchlowerthanphysicalfeedersegregation,andthepotentialforsavingsisverylarge.StatescanimplementPM-KUSUMComponentCinmixedfeedersaswellbysegregatingfeedersvirtually.c.Segregationoffeeders:Segregatingagricultureandotherfeedershasproventobethemosteffectivemethodofgridimprovement.However,physicalfeedersegregationiscapitalintensive,withfinancialimplicationsforstates.Hence,theoptimalloadsegregationapproachshouldbebasedonthestate’scontext(WorldBank,2013).Virtualfeedersegregationisaninnovativeandcost-effectiveapproachthatstatescanconsider(SeeBox5).Othercost-effectivemeasurescanalsosupportgridinfrastructure.Accordingtoadeveloperinonestate,asurveyofthelow-tensionlinesbeforemonsoonsandthetimelyremovaloftreebrancheshelpedimprovegridavailabilitysignificantly.IISD.org28ImplementingSolarIrrigationSustainably3.2.2WhatAretheAdministrativeandRegulatoryConcerns,andHowCanStatesMitigateThem?Administrativeandregulatoryproceduresandcomplianceoftencreatecomplicationsfordevelopers.Inthecaseofdecentralizedpowerplants,weidentifiedtwocriticalbarriers.Land-RelatedChallengesCHALLENGETosetupasolarpowerplant,developersneedtofindsuitableland,negotiatewiththelandowners,gettherightofwayfordedicatedfeedersfromthesolarplanttothesubstation,andcompleteadministrativeformalitiesfordiversionoftheland-usestatusfromagriculturetonon-agriculture.Withtheexceptionofsolarparks,wherethegovernmentfacilitatesaccesstoland,similarchallengesarefacedbylargeutility-scalesolarplants.However,onaproportionate(orperMW)basis,thelogisticalcostofactivitiesmentionedaboveismuchhigherforadecentralizedsolarplant.Thisisespeciallytrueforlargeplayerswhosebusinessmodelsrelyoncapacityaggregation.SOLUTIONMostland-relatedchallengesresultfrombarrierstointeractionbetweendevelopersandlandowners.Itispartoftheinvestmentriskandcannotbewhollydoneawaywith.Landowner-developerinteractioncanbeunderstoodatthreelevels(Figure8).Figure8.Landowner–developerinteractionInformationBothpartiesgetinformationoncandidatesinterestedintheschemefromtheotherside.AssessmentDevelopersassesstheland’sfeasibilityforsettingupasolarplant.Landownersassesstheinvestmentproposalorrentproposalbythedeveloper.NegotiationBothpartiesbeginnegotiations.Developersalsonegotiatewithotherlandownersfortherightofwayforthededicatedfeeder.DevelopersLandownersIISD.org29ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingStatescanfacilitateinteractionstovaryingdegreesdependingonthecapacityandhumanresourcesofthestateimplementingagencies.States’facilitationmeasurescorrespondingtotheselevelsare:InteractionlevelInformationPossibleFacilitationMeasuresbytheStateThestatecanactasanintermediaryforsharinginformationbetweenthedevelopersandthelandowners.Thefollowingmeasuresarerecommendedintermsofcomponents.Table4.MeasurestoenableinformationsharingbetweendevelopersandlandownersFordevelopersForlandownersComponent—A•Beforetenderpublishing,statesinviteapplicationsfromlandownersinterestedinparticipatinginthescheme.Theapplicationformshouldcontaindetailsofthefarmer,landrevenuedetails,contactdetails,andwhetherthefarmerwouldliketoself-investorrentouttheland.•Thestateimplementationagencysharestheconsolidatedlistofinterestedfarmersandothernecessarydetailswiththeregistereddevelopersinthestatewhoareinterestedinparticipatinginthescheme.•Beforetenderpublishing,statescreatearegistryofsolardevelopers.•Statessharetheregistrywiththefarmerswhohaveappliedforthescheme.Component—C(FLS)•Priortotenderpublishing,statesinviteapplicationsfromprivatelandownerswillingtorenttheirlandsforthescheme.•DISCOMsassessvacantlandsavailableintheirsubstations.•TheDISCOMalsoengageswithotherdepartmentstoidentifyvacantgovernmentlandssuitableforthescheme.•Thestatesharestheconsolidatedlist(includingthefarmers’listfromComponentA)withregistereddevelopersinthestatewhoareinterestedinparticipatinginthescheme.•Statesannouncetheschemeandinformthepublicaboutregistereddevelopersinthestate.Importantnotes:•Onecriticalfactorforthesuccessofthesemeasuresispublicity.Forexample,Maharashtraensuredwidepublicitybybrandingadistinctinitiative(called“LandBank”)andlaunchingitinaceremonyattendedbythechiefminister.Theinitiativewashighlysuccessful.•Itisalsoessentialtokeeptheapplicationprocessverysimpleforfarmers.Onlythemostimportantdocumentsshouldbemademandatory.StatescanalsoenlisttheirCommonServiceCentrenetworkstofacilitateapplicationsusingwidepublicityandbyfixingdefinitechargesfortheservice.IISD.org30ImplementingSolarIrrigationSustainablyInteractionlevelAssessmentPossibleFacilitationMeasuresbytheStateFordevelopers,assessingthefeasibilityofthelandparcelforsettinguppowerplantscanbecumbersome.Therearetwowaystofacilitatethisprocess:1.Thestatedoesitbyitself:Statescanusetheappropriatepartoftheiradministrativeservicestoassesslandparcels.DISCOMscanusetheirfieldstaffforthispurpose.MaharashtratookthisapproachfortheMSKVYwithmuchsuccess.Inconsultations,schemestakeholdersstatedthatmostofthesubsequentbidswerebasedonthelandsregisteredinlandbanks.2.Data-basedfacilitation:Thereisamplescopeforusinggeospatialdatatoconductatleastapreliminaryassessmentofthelandparcels.Manystateshavecompletedthecomputerizationoflandrecords,andmanyothersareintheadvancedstageofdoingso.Statescanusethisdataalongwiththegeo-locationofsubstationstodevelopwebapplicationsthatfilteroutfeasiblelandparcelsbasedonthedistancetothesubstationsidentifiedforPM-KUSUM(SeeBox6).Integratingotherrelevantgeographicinformationsystemmaplayers(suchasrailwaylinesandroadways)canfurtherenhancetheutilityfordevelopers.Forexample,DISCOMordeveloperscanapproachthelandownersoftheidentifiedparcelstosetuppowerplants.Box6.Examplesofonlinetoolsforsolarplantsiteselection1.SiteRight:TheNatureConservancy,VasudhaFoundation,CenterforScience,Technology,andPolicy(CSTEP),andFoundationforEcologicalSecurityhavecollaboratedtocreatethistooltoidentifybarrenlandswithinagivenradiusofasubstation.TheyusedthegeolocationdataofsubstationsandthelandclassificationdatafromtheBhuvanportal3topreparetheapplication.(Atthetimeofwriting,thetoolisavailableforsevenstates,butmorewillbeaddedinthefuture).2.LifeLands:AtooldevelopedbyAurovilleConsultingthatusessatelliteimagery,artificialintelligence,andgeographicinformationsystemmappingtoidentifydegraded/unusedlandsInteractionlevelNegotiationPossibleFacilitationMeasuresbytheStateNegotiatingtherightofwayforthededicatedfeederscanbequitecumbersomeandsensitive.Statescanusetheirnetworks,includingfrontlineworkersfromDISCOMs,revenuedepartments,andpanchayats,tospeeduptheprocess.Thereisnotalotofscopeforstatefacilitationbeyondthesechannels.3BhuvanisaGeoportaloftheIndianSpaceResearchOrganizationprovidingservicesandapplicationsrelatedtosatelliteremotesensingdataforpublicuse.IISD.org31ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingRestrictioninlandleasingandland-useregulationAdditionalcriticalland-relatedchallengesarethelegalrestrictionsinleasinglandandchangingland-usestatusfromagriculturetonon-agricultureuse.“Land”isastatesubject,andhenceregulationsvarybetweenstates.Wefoundtwobroadcategoriesofrestrictions,asfollows:CHALLENGE1Proceduraldifficultiesinland-useconversionfromagriculturaltonon-agriculturaluse:MoststatesinIndiahavestatesolarpolicies,thatsimplifytheprocedureforconvertingthestatusofagriculturallandsinordertoaccommodatesolarplants.Somestates,likeRajasthan,exemptsolarpowerprojectsfromtherequirementforlandconversion,whileothers,likeAndhraPradeshandKarnataka,immediatelyconfirmtheconversiononpaymentoffees(Kumar&Thapar,2017).However,actualpracticeonthegroundoftenvariesfromtheofficialpolicy,leadingtoadditionaldifficultiesandcostincreasesfordevelopers(KLaw,2021;Rahmanetal.,2021).Thereisaneedtogivemoreclaritytobothdevelopersandfieldfunctionariesoflandrevenuedepartments.SOLUTION1Themainreasonforthischallengeisthatdifferententitiesmanagethestatesolarpoliciesandlandregulations—usuallythestateRenewableEnergyDevelopmentAgenciesandthelandrevenuedepartments,respectively.Closecoordinationbetweenthetwodepartmentsisneededtoclarifythelandleasingprocedures.SpecificmechanismsforengagementandcoordinationaredescribedinSection4.2.1.CHALLENGE2Restrictionsontransferoflandbelongingtotribalgroups:Inmanystates,therearesafeguardsforpreservingtribalownershipofland,whichinsomecasesincludesabanonleasingtribal-ownedlandstonon-tribalentities.ThiscanbeamajorissueinstateswithasignificantshareoftriballandslikeMadhyaPradesh,Maharashtra,andChhattisgarh.Thesolarpoliciesofmoststatesdonotexplicitlydealwithsuchregulations.SOLUTION2Statesshouldexplorealternativebusinessmodelstocircumventlandrestrictionswithoutcompromisingtheprinciplesforthesafeguards.Aspecialpurposevehicle(SPV)model,forexample,basedonanequityshare,isanattractiveoption.Thefarmers’sharecancomeintheformoflandaswellassweatequity(forfarmers’contributiontolanddevelopment).Inthiscase,thereisnoneedforanylandtransfer,reducingthelegalrestrictions.Thaparetal.(2017)estimatethata5%–7%equityforthefarmerisaviablealternative.InKarnataka’sSolarFarmerScheme,thismodelwassuccessfullyimplemented.AnotherexampleisKerala’ssolarpolicy,whichmandatesarevenue-sharingarrangementinwhichthesolarplantisdevelopedontriballands(GovernmentofKerala,2013).IISD.org32ImplementingSolarIrrigationSustainablyBox7.SolarFarmerSchemeinKarnatakaKarnatakalaunchedtheSolarFarmerSchemein2014basedontheKarnatakaSolarPolicy2014.Underthescheme,farmerscouldsetup1–3MWcapacitypowerplantsontheirland.Thefarmerswereselectedonafirst-come-first-servebasis.ThetariffwasfixedatINR8.4/kWh(KarnatakaElectricityRegulatoryCommission,2017).Thetotalinstalledcapacityundertheschemewas296MW.TheschemeallowedfarmerstoformSPVswithdevelopers.AttractivetariffsandtheSPVmodelhelpedthefarmerstosecureloansandreducedfinancingchallenges.However,thestatediscontinuedtheschemeafterachievingtheinitialtarget(Rahmanetal.,2021).3.2.3WhatAretheChallengesRelatedtoPaymentRisksandCreditworthiness,andHowCanStatesOvercomeThem?Twocriticalaspectsoffinancingaretimelypaymentofduesandaccesstofinance.Payment-RelatedChallengesCHALLENGEManyDISCOMsarefinanciallycashstrappedandroutinelydefaultonpaymentstocleanenergyprojects.Thisaffectscashflowandadverselyaffectsbusinessviability.Utility-scalepowerplantsareprimarilydevelopedbasedonPPAswithCentralPublicSectorUndertakings(CPSUs)likeSolarEnergyCorporationofIndia(SECI)andNTPC,whichactasintermediariesbetweenthedeveloperandtheDISCOM.TheseCPSUsarebeneficiariesofthetripartiteagreementbetweentheuniongovernment,stategovernment,andtheReserveBankofIndia(RBI),onwhichbasistheygetpaiddirectlybyRBIfromthestate’saccountiftheDISCOMdefaultsonpayment.Fordecentralizedpowerplants,theabsenceofsuchamechanisminPM-KUSUMmakesitariskyinvestmentformanydevelopers.Thisisespeciallytrueforsmallandmedium-sizedenterprises(SMEs),whichformthebulkofinteresteddevelopersinthePM-KUSUMscheme,whocannotabsorbsuchcosts,nordotheyhavethefinancialwherewithaltotakesuchrisks.SOLUTIONThesolutionisnotininnovationbutinenforcementandcompliance.StatesmustrecognizetheuniquechallengesfordevelopersinPM-KUSUMandprioritizepaymentstoboostinvestorconfidence.1.Issueunconditionalrevolvinglettersofcredit:Aletterofcredit(LC)isamechanismfordeveloperstohedgeagainstpaymentdefaultrisk.Underthismechanism,theDISCOMsprovidearevolvingLCtothedeveloper;ifthepaymentsaredelayed,developerscancashthem.AlthoughtheuniongovernmenthasdevelopedregulationsmandatingtheissuanceofunconditionalLCsforREPPAs,thesearenotenforcedinmanystates.Stategovernmentscan,however,directtheirDISCOMstoissueLCsunderPM-KUSUM.2.UseCPSUsasintermediaries:Statescanalsoreplicatethemodelofutility-scalepowerplantsforPM-KUSUM,whereaCPSUlikeSECIorNTPCcanactastheintermediary.Thistried-and-testedsystemcanIISD.org33ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingsignificantlyincreaseinterestinthescheme.3.Flexibilityininstalmentfrequency:Severalbankshaveprovidedadegreeofflexibilitytotheborrower(thefarmerorthedeveloper)inthefrequencyofpayinginstalments.Thereisanoptiontochoosemonthly,quarterly,oryearlyrepayment.Optingforlow-frequencyrepaymentcanhelpbufferanydelayinpaymentfromDISCOMorreduceworkingcapitalissues.AccesstoFinanceThecostoffinanceistheotherelementthatdeterminesaproject’sviability.WefoundthatthepromotersofPM-KUSUMstruggledtoaccessaffordablefinancing.Thereasonsforchallengesinaffordablefundingweredifferentforfarmersanddevelopers,andinclude:ChallengesRelatedtoLoanAccessforFarmersUnderComponentACHALLENGEThemainbarriertoimplementingPM-KUSUMComponentAhasbeenfarmers’lackoffinancingoptions.Typically,banksonlyprovideloanswithaminimumof25%upfrontcapitalfromthefarmer.TheMNREbenchmarkcapitalcostfora1MWpowerplantisaboutINR3.5croreatthetimeofwriting.ThecorrespondingupfrontcapitalwouldbeINR87.5lakh(~USD110,000),ahugeinvestmentforafarmer.Farmersdonothaveadequatecapitaltopaytheloandownpayment.Moreover,intheinitialstages,bankswereunwillingtoconsideragriculturallandsascollateralduetothespecialsafeguardsforagriculturallandsunderthelawsthatgoverntheauctioningofpropertiestorecoverloans,assetoutintheSecuritisationandReconstructionofFinancialAssetsandEnforcementofSecuritiesInterestAct.Althoughmanybankscameoutwithguidelinesallowingtheuseofagriculturallandsascollateral,theyarenotyetwidelyadoptedduetoalackofawarenessamonglocalbranchandfield-levelbankingofficials.SOLUTIONThemainpotentialmeasurestoovercomethesedifficultiesliewiththebanksandRBI,includingrelaxinglendingnormsforfarmers.Recommendationsonlendingnormsareoutsidethescopeofthisguidebook.However,theseinstitutionshavetakensomeBox8.PartnershipwithCPSUsSeveralstatesarepartneringwithCPSUstosupportdecentralizedsolarpowerplants.Therearemultiplebusinessmodelsforthesepartnerships.UttarPradeshdesignatedSECIastheimplementingagencyforPM-KUSUMComponentC(FLS).Aspertheagreement,SECIwillaggregatethestatedemandandsignPPAswithdevelopersonbehalfofthestate’sDISCOMs,thusreplicatingtheintermediarymodelofsolarparks.However,therehasn’tbeenmuchprogresswiththeschemeatthetimeofwritingthisguidebook.MaharashtrapartneredwithEnergyEfficiencyServicesLimited(EESL)todevelop500MWundertheMSKVYforamutuallyagreedtariff(refertocasestudy).TwootherCPSUs—NTPCVidyutVyaparNigamLtdandBraithwaite&Co.Ltd.—tookpartintheMSKVYbutthroughtheopenbiddingroute.IISD.org34ImplementingSolarIrrigationSustainablycriticalmeasuresrecentlythatimproveaccesstocredit:1.RBIhasadvisedthatloansdisbursedbybankstowardthePM-KUSUMschemewouldbecountedtowardbanks’PrioritySectorLendingobligations.Thisincentivizesbankstoapprovemoreloansunderthescheme.2.Severalbanks,includingtheStateBankofIndia(SBI),CanaraBank,BankofIndia,UnionBank,andBankofBaroda,havecomeoutwithtailoredfinancialproductsforPM-KUSUM.Theseproductsoffersomerelaxationofcollateralrequirements.Expertsfromthebankingsectorsuggestedthefollowingmeasuresthatstatescouldtaketomobilizefinancing.1.Buildingthecapacityofbankers:Althoughcentralizedlendingguidelinesareinplace,bankofficialsarenotwell-versedinthescheme.Stateimplementingagenciescanfacilitateawarenessprogramsforbankersthroughthefollowingsteps:a.Workwiththeconvenerofthestate-levelbankingcommittee(SLBC)toidentifypotentialfinanciersforthescheme.b.Identifytheconcernedofficialsfromtheseinstitutionstoorganizeworkshopsontheschemeandsharebestpracticesamongstates,includingthepotentialforconvergencewithotherschemes.2.Facilitationandawarenessmeasuresforbankersandfarmers:StatescanworkwithSLBCstocreatemodeltemplatesfordetailedprojectreportspreparationandbankappraisalformats,whichcouldstreamlinetheloansanctioningprocess.Further,thestateimplementingagency(SIA)canprepareshortexplanatoryfliersthatcanbedisplayedinbankbranchestotargetfarmersdetailingthefollowingaspects:a.Theprocessflowoftheschemeb.Roleandresponsibilitiesofdifferentagencies/stakeholdersateachstepc.Detailsonwhatmandatoryclearancesareneededforprojectcommissioning(andwhatarenot).3.Monitoringofthescheme:StatescanworkwithSLBCstoincludethePM-KUSUMschemeasanagendapointinthestateanddistrict-levelmeetings.RepresentativesfromSIAscanreviewprogressandaddressbankers'questions.4.Convergence:Statescanexploreconvergenceopportunitieswithalliedschemesthatdifferentdepartmentsareimplementing.Forinstance,someschemestopromotemicro,small,andmedium-sizedenterprises(MSMEs)offerinterestsubventionforloansadvancedtoMSMEs.StatescanexplorethepossibilityofregisteringfarmersasMSMEstotakeadvantageoftheseschemesashasbeenundertakeninRajasthan(Box9).Similarly,statescanexploreopportunitiestoaccesstheAgricultureInfrastructureFundfacilityforComponentA.IISD.org35ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingChallengesRelatedtoFinancingforDevelopersUnderComponentsAandC(FLS)CHALLENGEConcernsaboutprojectviabilityandimplementationchallengesincreasetheriskperceptionofPM-KUSUMforthefinancingagenciesandtranslatetoahighercostoffinancingforthedevelopers.Developersarefacingacorrespondingincreaseinthecostoffinanceforprojectsonaccountofhigherratesofinterest.Inaddition,mostoftheparticipatingdevelopersareSMEsthatdonothavethescaleortheexperiencetoaccesscheapersourcesoffinance.SOLUTIONStatesdonothavearoleincreditaccessmechanismsandthuscannotdirectlyinfluencethecostoffinancingfordevelopers.However,theycanplayenablingrolesinenlargingthefinancepoolavailableforSMEdevelopers.1.Allowingjointventures(JVs)tobidforthescheme:JVsallowfirmswithcomplementarystrengthstocometogether.OpeningPM-KUSUMprojectsforJVswouldenableSMEstoconnecttolargerfirmswiththefinancialwherewithalorhaveaccesstolow-costfinancingbyvirtueoftheirsuperiorcreditrating.2.Explorepartneringwithbilateralandmultilateraldevelopmentfinanceinstitutions(DFIs)topromotethescheme:DFIshaveprovidedfinancingfacilitiestargetingspecificcleanenergyinitiativesinthecountry.OurconversationswithDFIsrevealedthatPM-KUSUMwouldbeanareaofinterestformanyofthem,givenitshighpotentialimpactonsustainabledevelopmentgoals.StatescanengagewithpotentialDFIpartnerstoexplorespecialfinancingfacilitiesforPM-KUSUM.Theexperiencefromthecommercialandindustrial(C&I)rooftopsolarsegmentisveryinstructiveinthekindoffinancingfacilitiesthatstatescanexpecttosetupinpartnershipwithDFIs(Box10).Box9.ConvergenceofComponentAwithMSMEschemes:ExperiencefromRajasthanRajasthansupportedfarmerswhobidunderComponentAtoaccesstheinterestsubventionbenefitsofferedunderthestate-levelschemeforMSMEs—theMukhyaMantriLaghuUdyogProtsahanYojana.Asperthestaterepresentative,47farmersbenefitedfromthisconvergence.IISD.org36ImplementingSolarIrrigationSustainablyBox10.Alternativefinancingchannels—experiencefromIndia’srooftopsolarsectorThefinancingchallengesfacedbytheC&IrooftopsolarsegmentinIndiahavesomeparallelswiththePM-KUSUM;theindividualprojectsaresmall-scaleandwidelyspreadout,andthedevelopersparticipatinginthesegmentaremostlySMEs.Thesefactorsincreasethecostoffinancinginbothsectors.Variousfinancingagencies,especiallyDFIs,havesupportedtheinvestmentintheC&Irooftopsectorthroughspecializedfinancinginstruments,including:1.Concessionalcreditloans:DFIssetupfundstoprovidelow-interestloansforC&Isolarrooftopconsumers.Theypartnerwithascheduledcommercial(domestic)banktooperationalizethefunds.2.Creditenhancementsupport:Creditenhancementmeasuresareintendedtoincreasethecreditprofileofaproduct,inthiscase,C&Irooftopsolarprojects.Enhancingcreditprofileshelpslowerinterestratesandexpandthepooloffinancingoptionsavailable.Creditenhancementmeasuresareexpectedtomobilizefundsinmanymultiplesofwhatisinvestedaspartofthemeasureitself.Somecreditenhancementmeasuresinclude:a.Creditdefaultguaranteefunds:Thesupportingagencyestablishesacorpusfundthatalendercanaccessincaseofapaymentdefault.Defaultguaranteefundsaretypicallysizedasapercentageofthetotaltargetloanamount.Thepresenceofdefaultguaranteefundsenablestheloweringofinterestratesandeasieraccesstocommercialloans.b.Securitization:Thisistheprocessofbundlingaspecifictypeofprojecttogethertocreateanewproductforaloan.IntheC&Irooftopsegment,itsolvesthescaleissueofindividualprojectsandreducesthetransactioncostforfinancingagencies.Thisalsohelpsmobilizefinancingfromlargeplayerswhostayawayfromthesectorduetothesmall-scalenatureoftheproduct.c.Technicalassistance:ManySMEsareunawareofthevariousfinancingoptionsavailableinthemarketandthemeasurestheycantaketoimprovetheircreditprofile.TechnicalassistanceisaimedatcapacitybuildingofSMEenterprisesintheC&Irooftopsector.Theseinstrumentsareoftenimplementedasapackage.Forexample,someDFIsmaymandatesecuritizationoftheprojectsbeforeprovidingconcessionalloans.SomeexamplesofsuchinnovativefacilitiesintheC&IrooftopsectorincludetheRooftopSolarPrivateSectorFinancingFacilitysupportedbytheWorldBank,theU.S.–IndiaCleanEnergyFundsupportedbyOverseasPrivateInvestmentCorporation,andtheWorldBank–SBIFirstLossReservefacility.IISD.org37ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoing3.3HowCantheStatesArriveatanOptimumTariff?Wehavediscussedfactorsthatincreasethecostofadecentralizedsolarpowerplantbutcanbeavoidedormitigatedusingvariousmeasures.However,eveninthebest-casescenario,theLCOEfromadecentralizedpowerplantmaybehigherthanautility-scalepowerplantduetoitsinherentcharacteristics.UnderstandingthesereasonsandsettingaviabletariffforthePM-KUSUMschemeisessentialtomakingtheschemefinanciallyviableforthedevelopers.Figure9andTable5provideabreakdownofthetariffcalculationsforPM-KUSUMComponentAbydifferentstates.Therearewidevariationsinthecontributionofindividualcomponents,whichsuggestsalackofclarityamongpolicy-makersonthefactorscontributingtothefinaltariff.Atthetimeofwritingthisguidebook,onlytwostates,GujaratandKarnataka,haveprescribedceilingtariffsforComponentC(FLS).Gujarat’stariffcalculationisbasedonanaverageofthetariffdiscoveredforothersolarprojects(outsidesolarparks)intheprevious6months.Karnataka’stariffcalculationisnotpubliclyavailable.Hence,wehavelimitedouranalysistoComponentA.Figure9.CeilingtariffforPM-KUSUMComponentAdeterminedbydifferentstatesSource:Authors’analysisbasedondatafromSERCorders:ChhattisgarhStateElectricityRegulatoryCommission,2021;HaryanaElectricityRegulatoryCommission,2019;KarnatakaElectricityRegulatoryCommission,2019;MadhyaPradeshElectricityRegulatoryCommission,2021;PunjabStateElectricityRegulatoryCommission,2020;TelanganaStateElectricityRegulatoryCommission,2021.Note:Otherincludesinterestontermloan,interestonworkingcapital,andreturnonequity.0.000.501.001.502.002.503.003.504.00PunjabMadhyaPradeshKarnatakaHaryanaTelanganaChhattisgarh2.753.073.083.113.133.51INR/kWhO&MDepreciationLeaserentOtherIISD.org38ImplementingSolarIrrigationSustainablyTable5.KeyparametersforlevelizedcostcalculationbydifferentstatesChhattisgarhHaryanaKarnatakaMadhyaPradeshPunjabRajasthanTelanganaYearoforder2021–222019–202019–202020–212020–212019–202019–20Capitalcost(INRcrorepermegawattpeak(MWp))3.353.43.43.353.43.43.6Capacityutilizationfactor(CUF)19%20%19%21%21%20%19%Interestrate9%10.31%10.50%9.53%9.67%10.53%10%Repaymentperiod(years)13101315151312Discountrate9.27%11.42%11.55%8.54%8.61%9.42%11.20%Operationsandmaintenance(O&M)expenses(INRlakhperMWp)7.8210.54.574.54.54.5O&Mescalation5.72%5.72%5.72%3.84%3.84%5.85%4.04%Landleaserate(INRlakhperMWp)---1.82---Landleaseescalation---5%---Finaltariff(INR/kWh)3.513.113.083.072.753.143.13Source:SERCorders:ChhattisgarhStateElectricityRegulatoryCommission,2021;HaryanaElectricityRegulatoryCommission,2019;KarnatakaElectricityRegulatoryCommission,2019;MadhyaPradeshElectricityRegulatoryCommission,2021;PunjabStateElectricityRegulatoryCommission,2020;TelanganaStateElectricityRegulatoryCommission,2021.IISD.org39ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingChallengesRelatedtoTariffDeterminationCHALLENGETherearethreemainreasonsfortheincreasedLCOEfromadecentralizedsolarplantcomparedtoautility-scaleplant.1.O&Mcosts:O&Mcostsarenotdirectlyproportionaltothesizeofthepowerplant.A100MWpowerplantwillnotneed100timesthepersonnelrequiredfora1MWsolarplant.Asaresult,O&Mexpendituremakesupahighershareoftotalcostsforadecentralizedplant.ReviewingtariffcalculationsbydifferentstatesrevealedawidevariationinO&Mcostassumptions.Table5summarizesthefindings—assumedcostsvariedbetweenINR4.5lakhperMWinKarnatakatoINR10.5lakhperMWinHaryana.Figure9showsthecorrespondingdifferenceintheO&Mcontributiontototallevelizedcostsinsixstates.2.Costofthesystem:Thelowereconomiesofscalefordecentralizedsolarplantsincreasesthecapitalcostforsysteminstallation.Inaddition,farmersorSMEs—whoarethepredominantschemeparticipants—wouldhavelessnegotiationpowerindeterminingtherawmaterialcostsforsettingupthepowerplantcomparedtoalargeutility-scalepowerplant.Hence,thereisaneedforacleardistinctionbetweenbenchmarkcapitalcostsofsolarplantsofdifferentscales.AnotherkeyfactoristhevolatilityofmodulepricesinternationallyintheperiodfollowingPM-KUSUM’slaunch.TheceilingtariffistypicallyIISD.org40ImplementingSolarIrrigationSustainablydeterminedbasedonafixedcapitalcostparameterandisnotlinkedtomarketdata.However,withhighpricevolatility,thevalueusedintheLCOEcalculationmaybecomeobsoletequickly.Hencethereisaneedtolinktheceilingtarifftoreliablemarketdata.ChangesintheGoodsandServiceTaxandBasicCustomsDutytaxesonsolarcomponentsresultedinasharpincreaseincapitalcosts.However,stateshavebeenslowtorespondtothesechangesbymakingappropriateamendmentstotheceilingtariff.Inaddition,thelandcostinsolarparksisusuallykeptatanominalrateasmostofthemaresetuponlandacquiredbythegovernmentandtransferredtothedeveloper.Butthisapproachcannotbeappliedtodecentralizedpowerplantsbecausethedeveloperhastofactorinthecostoflandleasing,whichisnotinsignificant.MadhyaPradeshistheonlystatethathasconsideredthelandleaserateasacomponentoftheLCOE.ItscontributiontothefinalLCOEinMadhyaPradeshisINR0.16perkWh,around5%ofthefinaltariff(seeFigure9).3.LogisticaloverheadsforadecentralizedplantperMWbasisaremuchhigherthanutility-scalepowerplants.ThiswouldincludethechallengesinidentifyingandnegotiatinglandandrightofwayasdescribedinSection3.2.2.Evenwithexcellentfacilitationfromthestate,itisboundtotakeupmoretimeandresourcesforthedevelopersofdecentralizedsolarplants.SOLUTIONSThemainsolutiontothischallengeistorefinetheLCOEcalculations.Figure9makesitclearthatthereisawidedisparityinhowthetariffiscalculatedacrossthestates.ThisshouldnotbethecaseforPM-KUSUMbecausemostfactorscontributingtoenergycostsarelargelythesameacrossthecountry,exceptforfactorslikelandrent.Thevariationlikelyemergesbecausetariffsettingisunderthejurisdictionofstates,andtheDISCOM(asthefirstpetitioner)takesthelead.ThereareanumberofstrategiesthatDISCOMscanpursuetoimproveaccuracyforeachparameter:1.Priorconsultationwithstakeholders:Wideconsultationscanbeorganizedwithlocaldevelopers,SMEsandmarketexpertstoassessthetariffparametersbeforefilingthepetition.2.Sizecategory-wisetariff:DISCOMsshouldcreatedifferentcategoriesofsolarpowerplantsbasedonsizesanddeterminetariffsforthemseparately.3.Usingdatafromreliablesources:DISCOMscanusereliabledatasourceslikePFCorIREDAtocreateadetailedbreak-upofcapitalcostsforcommentsfromindustrystakeholders.ForO&Mcosts,DISCOMscanusedatafromthesmall-scalepowerplantsinstalledundertheRooftopPV&SmallSolarPowerGenerationProgramme(RPSSGP)oftheJawaharLalNehruNationalSolarMission(JNNSM)schemeindifferentstates.4.Proactivemeasures:Severalpolicychanges,likeGSTandbasiccustomsduty,affectthetariffandareannouncedinadvanceoftheirimplementation.Non-considerationIISD.org41ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingBox11.ApproachestotariffdeterminationExperiencefromMSKVYOnecriticalfactorfortherelativesuccessoftheMSKVYprojectwastheresponsivenessofMERCandagilityintariffsetting.Initially,MSEDCLusedacomparisonwithautility-scalesolarpowerplanttodeterminethetariffbutwasalsoquicktoadapttopolicychangesandthescheme’sprogress(SeeMSKVYcasestudyinAppendix).TheMERCalsogavesufficientlibertytoMSEDCLtorevisethetariffbasedonproperduediligence.OnlinetoolsforanalysisofpotentialbenefitsAurovilleConsultinghasdevelopedanonlinetoolcalledSolvaforconductingfeeder-levelpowerflowanalysisfordistributedsolarpowerandevaluatingtheirnetworkbenefitsforDISCOM.Statescanusethisapproachtorethinktheirceilingtariff.ofthesefactorscandelaytheimplementationoncethepolicyisinforce.DISCOMscanincludethesescenariosinthetariffpetitioninadvance.Anothersolutionistorethinktheapproachtotariffdesign.TariffsneednotbebasedonanLCOEcostcalculation,particularlyifDISCOMsdiscoverthatactualcostsarefrequentlynotwellreflectedintheLCOEparameters,despiteeffortstoimproveaccuracy.DISCOMscanrethinktheirapproachbyasking,AtwhattarifflevelwillthePM-KUSUMschemebenefitthestate?Thiscanbeansweredbycalculatingthelandedcostofpowerfromaconventionalsourceatthe11kVsubstationtargetedunderthePM-KUSUMscheme.DISCOMscanundertakeastudybyidentifyingsamplesubstationsandanalyzingthecostofpowerbasedontheprevailingconsumptionpatternandtheDISCOM’spowerpurchaseportfolio.Thisexercisealsobenefitsstatesbyhelpingthemgaininsightsintolocation-specificcostsandplanthedeploymentaccordinglyunderthePM-KUSUMscheme.DISCOMscanmakeuseofexistingtoolsforthisexercise(SeeBox11).IfthediscoveredcostishigherthanthetariffarrivedatusingtheLCOEapproach,statescanusethisdifferenceasabuffertoincreasethetarifftomaketheschemeattractivefordevelopers.Thedecentralizedsolarplantmodelrequiresadditionalsupporttogetofftheground.Intheinitialstages,thiscancomeintheformofincreasedfinancialincentivesforthedevelopers.AlessscientificbutsimplerapproachwouldbetotaketheaveragepowerpurchasecostandfactorintransmissionchargesandlossesattheCentralTransmissionUnit,StateTransmissionUnit,and33kVlevels.However,thiswouldbeanapproximatecalculationandwillnotgiveanaccurateestimateoftheactualcostsandbenefitsofthescheme.IISD.orgSECTIONSUMMARY42SectionSummaryFinancingislinkedwithdifferentaspectsofthescheme’sdesignandimplementation,andanyrisksandopportunitiesaffectingtheschemearereflectedintheeaseoffinancing.Hence,thissectionusesfinancingasananchortoinvestigatechallengestowardinvestmentintheschemeandrecommendmeasurestoovercomethem.Financingremainsthebiggestchallengetothescheme’ssuccess.Therearetwowaystoboostinvestment.1.Byreducingtheriskperceptionofthescheme2.ByIncreasingtariffstomakereturnsmoreattractivetothefarmer/developer.Threekeyconcernsleadtoahigherriskperceptionoftheschemeamongdevelopers.SomeproposedsolutionsthatstatescanadopttoaddresstheseconcernsareinTable6.Table6.KeyconcernsondistributedsolarpowerplantsandproposedsolutionstomitigatethemConcernsSolutionsConcernsaboutpoorgridinfrastructureDeveloperssuggestthatthesafeguardsrecommendedinthePM-KUSUMguidelinesforgridavailabilitydonotfullyallaytheirconcernsaboutthelikelihoodofoutagesduetothepoorstateofruralfeederinfrastructure.•Incorporating“deemedgenerationclauses”intothepowerpurchaseagreements.•Undertakinggridupgradingatthedistributionlevel,potentiallythroughconvergencewiththeRevampedReforms-basedandResults-linkedDistributionSectorScheme.•AlthoughComponentC(FLS)mainlytargetssegregatedfeeders,statescanoptforvirtualfeedersegregationinplaceswherephysicalsegregationdoesn’tmakeeconomicsense.ConcernsarisingduetooperationalandregulatorycostsDevelopersfaceachallengeinidentifyingandleasingaffordablelandforsettingupasolarplantandthetransmissionandevacuationinfrastructure.Anotherkeychallengeisrelatedtolandrevenueregulations,includingthetimelyapplicationofland-useregulationsrestrictinglandtransferincertainconditions.•Facilitatinginteractionsbetweenpotentialdevelopersandlandowners.Thisfacilitationcanhappenatthreelevels:•Identifyinginterestedfarmersbyinitiatingaregistryoflandownersinterestedinthescheme—aso-called“landbank”—andconnectingthemwithdevelopers•SupportingdeveloperstoassessthesuitabilityofdifferentlandsusingtheDISCOMs’fieldstaffanddata-basedfacilitation.•Supportingnegotiationswithlandowners,especiallyfortherightofwayoftransmissionlinesandevacuationbay.•Enablingclosecoordinationwiththelandrevenuedepartmenttoaddressland-regulationconcerns.•Promotingalternativeownershipmodelslikespecialpurposevehicleswhereverlandleasingisrestricted.IISD.orgSECTIONSUMMARY43ConcernsSolutionsConcernsarisingduetopaymentrisksandpoorcreditworthinessofdevelopersTwokeychallengesconcerningfinancingarethetimelypaymentofduesandaccesstofinance.DISCOMs’poortrackrecordinmakingtimelypaymentsnecessitatesthecreationofsafeguardsbystatesfortimelypayment.Accesstocreditfromfinancialinstitutionsisachallengeduetothelowcapacityoffarmerstoprovideupfrontcapitalandthepoorcreditworthinessofdevelopers.•Issuinglettersofcreditorstateguaranteestoallaypaymentconcerns.•Exploringthepossibilityofbringingincentralpublicsectorunitsasintermediaries,whichhasbeenasuccessfulmodelintheutility-scalesolarsegment.•Exploringalternativefinancingchannelsinpartnershipwithdevelopmentfinanceinstitutions.•Allowingjointventurescanalsohelpinterestedpartieswithcomplementarystrengthscometogether.•Enablingclosecoordinationwithbankingofficials,state-levelbankingcommittees,anddeveloperstoraiseawareness,supportbankers’training,andsimplifyproceduresinaccessingfinance.•Exploreconvergenceopportunitiesinfinancingwithotherschemes,includingmicro,small,andmediumenterprisesschemesandtheAgricultureInfrastructureFund.Settingatariffcommensuratetotherisksandeffortsundertakenbydevelopersiscriticalfortheviabilityofthedecentralizedsolarplantmodel.Ananalysisofthetariffadoptedindifferentstatesindicatesthatthereareafewcriticalissuesintheprocessofsettingatariff.Threekeyaspectsemergedasreasonsforanunviabletariffsetinmanystates,whichledtolimiteddeveloperinterest:1.TheO&Mcostsofasmall-scalepowerplantaremuchhigherperMWthanagrid-scaleplant.2.TheactualcapitalcostreportedduringourinterviewsandothersourcesishigherthantheassumptionsusedbymostSERCs.3.Thelogisticaloverheadsofestablishingasolarplant,suchaslandidentificationandnegotiation,addtothecostbutaren’tproperlyintegratedintothetariff.Statescaneitherrefinetheirtariffcalculationsormakethemmoreresponsivetomarketvariations.Statescanalsolookforalternativetariff-settingoptions,includingcomparisonwiththepresentlandedcostofpower.IISD.orgSECTIONSUMMARY44FurtherGuidanceandResourcesAurovilleConsulting.(n.d.).Solva—Evaluatethevalueofdistributedsolarandstorage.Anonlinetooltoevaluatethevalueofdistributedsolarpowerplants.https://solva.in/CouncilonEnergy,EnvironmentandWater.(n.d.).Howpaymentsecuritymechanismworks.https://www.ceew.in/cef/masterclass/explains/how-payment-security-mechanism-worksGovernmentofRajasthan.(n.d.).SaurKrishiAjivikaYojana.[LandbankportalsetupbytheGovernmentofRajasthanunderitsSKAYscheme]https://www.skayrajasthan.org.in/OuterHome/IndexHKRPInnovationsLLP.(2022).IoT-basedvirtualfeedersegregation.https://pmkusum.mnre.gov.in/pdf/Ag%20feeder%20segregation%20-%20JVVNL%20Pilot%20Project%20-%20Short%20Version%20Final.pptxJethani,J.K.,Kumar,A.,Sarangi,G.,Gandhi,P.,&Mishra,P.(2022).VirtualfeedersegregationofagriculturefeedersusingindustrialIoTandcloudtechnologies.InternationalConferenceonNanomaterialsforEnergyConversionandStorageApplication,Gandhinagar.MaharashtraStateElectricityDistributionCompanyLimited.(n.d.).MSKVYportal.[LandbankportalsetupbyMSEDCLfortheMSKVYscheme]https://mskvy.mahadiscom.in/MSKVYSolar/NatureConservancyIndia.(n.d.).SiteRight.[Onlinetooltoidentifythelandssuitablefordecentralizedsolarpowerplants]https://www.tncindia.in/what-we-do/siteright/Prayas(EnergyGroup).(2018,August7).Solarfeeder.[OverviewoftheMSKVYschemeinMaharashtra]https://energy.prayaspune.org/our-work/policy-regulatory-engagements/solar-feeder4.0ImplementationDesignandCoordinationIISD.org46ImplementingSolarIrrigationSustainably4.1WhyDoDesignandCoordinationMatterforImplementation?Thedeploymentofdecentralizedsolarpowerplantsposesuniquechallenges.Impactsarespreadovermultiplesectorslikepower,agricultureandlandrevenue.Managingthemrequiresconcertedactionsfromallthesesectors.Inconsultations,however,stakeholderswereunanimousthatsharingresponsibilitiesbetweenmultipleagencieswillslowdownprogressinschemeslikePM-KUSUM.Inattemptingtofindtherightbalance,thissectionwilladdressthefollowingquestions:•Whatrolesshouldthestateimplementingagenciestake?•Whatstrategiesareneededtomaximizetheoutcome?•Howcanotherdepartmentsandagenciessupportimplementation?4.2WhatRolesShouldtheStateImplementingAgencyPlay?Stateimplementingagenciesmustdomostoftheheavyliftingtogetschemesgoing.WeidentifiedthefollowingcriticalfunctionsfortheSIA.4.2.1FacilitateInformationExchangeThenoveltyofdecentralizedsolarpowerplantsdemandstheveryactiveengagementoftheSIAwithallthestakeholders.WithOtherDepartmentsandAgenciesInourconsultations,stakeholdersfromoutsidethepowersector,includingdifferentdepartmentsrelevanttotheWEFnexusandbankers,weretypicallyunawareofthePM-KUSUMschemeanditscomponentsIISD.org47ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingondecentralizedsolarpowerplants.Equally,welearnedofseveralinstancesinwhichimplementingagenciesonlybecomeawareofkeyinformationheldbynon-power-sectorstakeholdersataverylatestage.Hence,two-wayknowledgeexchangeisneededinthedesignphaseandaroundsubsequentcoordination.Forknowledgeexchange,theSIAisrecommendedtoorganizeaninceptionworkshopwithanumberofdepartmentsoragencies,aselaboratedinTable7.Table7.RecommendeddepartmentsforinclusioninaninceptionworkshopCoordinationmeasurestoaddressland-relatedconcernsandfacilitatefarmersintheschemeComponentA:StronglyrelevantComponentC(FLS):Relevantifthestateplanstotargetfarmers’landunderthiscomponentDepartments/agenciesKeyinformationtobesharedwiththedepartmentKeyinformationtobecollectedfromthedepartmentLandrevenuedepartment•Theopportunityforfarmerstousetheirlandsforsettinguppowerplants•Differentbusinessmodelsofownership•Regulationsconcerninglandleasingandland-useconversion•LawsconcerningscheduledareasorTribalareasandbusinessmodelssuitableinthoseareas•Scopeofexpeditingtheland-relatedproceduresthroughbettercoordination•ScopeofusingunusedgovernmentlandsforComponentC(FLS)State-levelbankersCommittee•Theopportunitiesintheschemeandtheneedforfinancingfarmers•Bankguidelinesregardingthescheme•Avenuesforcontinuousengagementandorganizingtrainingforthebankstaff•IssuesfacedinthetimelydisbursementofloansGramPanchayat•Theopportunityforfarmerstousetheirlandsforsettinguppowerplants•Differentbusinessmodelsofownership•AvenuesforengagementwithfarmersIISD.org48ImplementingSolarIrrigationSustainablyCoordinationmeasurestoaddressWEFconcernsComponentA:RelevantifthestateplanstotargetagriculturefeedersComponentC(FLS):StronglyrelevantDepartments/agenciesKeyinformationtobesharedwiththedepartmentKeyinformationtobecollectedfromthedepartmentAgriculture/horticulturedepartment•Initialplansonthescheme’sgeographicfocus•Changesinthepowersupplytofarmersduetothescheme•Scopeofdirectincentivesintheschemeforwaterconservation•Feedbackonexistingplansforgeographicfocus•Generalsituationofirrigationpracticesinthestateinthetargetfeeders•Areaswherethequalityofpowerispoor•Likelihoodoffarmersshiftingtomorewater-intensivecropsduetothescheme•Scopeofconvergingwiththedepartments’schemesonwater-savingpracticesIrrigationdepartment/groundwateragency•Changesinthepowersupplytofarmersduetothescheme•Scopeofdirectincentivesintheschemeforwaterconservation•Generalsituationofgroundwateruseinthestate•Areasalreadyfacinggroundwaterstressthatrequiresspecialattention•Scopeofinitiatingatargetedlong-termassessmentoftheimpactongroundwaterusingexistingandnewmonitoringwells•ScopeofincludingthedirectincentivesundertheAtalBhujalYojana’s(indistrictsitisoperational)DisbursementLinkedIndicatorsFarmer-focusednon-governmentalorganizations•Changesinthepowersupplytofarmersduetothescheme•Scopeofdirectincentivesintheschemeforwaterconservation•Generalsituationofirrigationpracticesinthestate•Areaswherethequalityofpowerispoor•Likelihoodoffarmersshiftingtomorewater-intensivecropsduetothescheme•Scopeofconvergingwiththedepartments’schemesonwater-savingpracticesIISD.org49ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingWithDevelopersTheimportanceofengagementwithdevelopersisexplainedintheprevioussection.Stateimplementingagenciesshouldappraisethemabouttheschemeandgetinformationconcerningtariffsandotheroperationalconcerns.4.2.2UndertakeInfrastructurePlanningTheoptimaloutcomefromPM-KUSUMisonlypossibleifitiscomplementedbygoodinfrastructureplanning.Toillustratetheneedforgoodplanning,Figure10reproducesananalysisbyPadoleetal.(2022),whoexaminedthepowerflowcharacteristics4Itisworthnotingthatthepowersupplyinthisparticularfeederisnotrestrictedto8hours,butthatisnotthecasewithallthefeedersinMaharashtra.Further,thisfeederdataneednotnecessarilyrepresenttheconsumptionpatterninalltheagriculturalfeedersandthroughouttheyear.Weareusingthisdataonlyforillustrativepurposes.ofapilotsolarizedfeederinMaharashtraundertheMSKVYscheme.Itcomparesatypicaldayofpowerconsumptionandpowergenerationinthefeederbythedecentralizedsolarplant.4Netconsumptionandnetgenerationarealmostequalonthatparticularday,butthedailyprofileofthetwovariessignificantly.Asaresult,powerisimportedatpeaktimesandexportedwhenthereisasurplus.Ifsurpluspowerisnotconsumedbysomeotherfeederwithinthesubstation,someofthebenefitsfromsolarizationarenegatedbecausepowerwillflowupstream,causingtransmissionlossesandcongestion.Figure10.AgriculturalconsumptionandsolargenerationprofilesfromasolarizedagriculturefeederSource:ImagereproducedfromPadoleetal.,2022.kWh02004008006001,0001,2001,4001,600135791113151724681012141618192120222324Timeofday(hours)SolargenerationAgconsumptionIISD.org50ImplementingSolarIrrigationSustainablyThreequestionsareofimportanceinthiscontext:1.Whatfeedersaremostsuitableforsolarizingthroughdecentralizedsolarpowerplants?2.Howcanstatesdecidetheoptimumcapacityofthepowerplants?3.WhatcomplementaryactivitiesareneededtomaximizetheoutputfromPM-KUSUM?WhichFeedersAreMostSuitableforSolarizingThroughDecentralizedPlants?ComponentC(FLS)ThetwomainobjectivesofPM-KUSUM—improvingpowersupplytofarmersandreducingthestatesubsidy—canhelpguidefeederselection.Tomeettheseobjectives,implementingagenciescanconsiderprioritizingfeedersbyapplyingthefollowingthreecriteria.Thesecriteriaarenotranked,andstatesneedtodecidewhichofthemapplytotheirspecificcontextsandtowhatextent.ThedatarequiredtoevaluatethemareavailablewithDISCOMs,whocanuseasimplerankingsystemtopreparetheprioritylistoffeeders.1.Substationswithsignificantagriculturalload:Thishelpstheschememeetitsobjectiveofreducingsubsidy,assavingswillbethehighestforsolarplantscateringtothelargestpossibleload.Further,ifthehigherloadiscausedbyalargenumberofconsumersconnectedtothefeeder,itwillbenefitmorefarmers.2.Substationswithsignificantnon-agriculturecategoryloadduringdaytime:Agricultureloaddemandhashighintra-dayandintra-yearfluctuation,which,asnotedabove,canreducebenefitsduetoinstanceswheredemandandsupplyarenotwellmatched.Non-agricultureloadsinthedaytime,inadditiontotheagriculturalload,arelikelytohelpsmoothoutthepeaksandtroughs.3.Substationswithpoorpowerqualityandunreliablepowersupply:Thishelpstheschememeetitsobjectiveofassistingfarmerswhosufferfromunreliableandpoorpowerquality.However,thisrequiresstatestoundertakeinvestmentinupgradingthedistributioninfrastructure.StatescanaccomplishthisbyblendingtheschemewithRDSS(SeeBox4).HowCanStatesDecidetheOptimumCapacityofthePowerPlants?Statesneedtoconsidertwofactorsinsizingthepowerplant:1.CentralfinancialassistanceforasolarpowerplantunderComponentC(FLS)isbasedoncertainconditionslaidoutbyMNRE(seeBox12).Statescangobeyondthissizebutwillnotreceiveassistancefortheadditionalcapacity.Further,thecapacitycalculatedinthiswaymaynotnecessarilybeoptimalforthesubstation.2.ForbothComponentAandC(FLS),theplantshouldbeoptimizedforconsumptioninthesubstation.OptimizingthesolarplantforenergydemandwithinthesubstationrequiresamodellingandsimulationexerciseusingstandardsolarPVdesignsoftware.SuchsoftwarecanoptimizethepowerplantfortheloadIISD.org51ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingcurvewithinthesubstation.CSTEPconductedsuchanexercisefortheBangaloreElectricitySupplyCompanyinKarnataka,whichcanactasatemplateforotherstates(CSTEP,2019).Thekeyinputparameterformodellingistheprojectedannualloadcurve.Itisadjustedfortheshiftinpowersupplytodaytime.Box12.EligibilityforcentralfinancialassistanceunderComponentC(FLS)PM-KUSUMguidelinesdescribeamultistepprocessforcomputingthepowerplantsizeforcentralfinancialassistanceeligibilityunderComponentC(FLS).Atthetimeofpublishingthisguidebook,assetoutinMNRE(2021),theprocessisasfollows:1.Identifytheloadeligibleforcentralfinancialassistance.a.Onlyagriculturalconnectionsareconsidered.b.Thepumpsizeiscappedat7.5horsepower(HP).Allpumpswithacapacityof7.5HPorlessareconsideredinfull.Forhigher-capacitypumps,acapacityvalueof7.5HPisusedforthecalculation.2.Calculatetheannualenergydemandcorrespondingtotheeligibleload.a.Theaverageofthelastthree-yearconsumptionisconsideredtheannualload.b.Ifallorsomeofthepumpsinthefeederaremetered,themeterdatacanbeusedtoextrapolatetothetotaleligibleloadinthefeeder.c.Ifnopumpsaremetered,butthefeedermeterdataisavailable,itcanbeconsideredbycalculatingtheproportionalconsumptionoftheeligibleload.d.Ifnoneoftheaboveisavailable,usetheindexationprovidedbytheStateEnergyRegulatoryCommission.3.Calculatetheplantsizecorrespondingtotheannualenergydemand.a.Usethefollowingformulatoarriveatthepowerplantsize.Powerplantsize(kW)=Annualenergydemand(kWh)24×365×Capacityutilisationfactor(CUF)b.CUFcanbearrivedatbasedontheinsolationofthelocality,or19%,whicheverishigher.Stateshavetheoptiontoincreasethesizeofthepowerplantbeyondthesizecalculatedabove,butthecentralfinancialassistancewillbelimitedtothecapacitycalculatedintheabovemanner.IISD.org52ImplementingSolarIrrigationSustainablyWhatComplementaryActivitiesAreNeededtoMaximizetheOutputFromPM-KUSUM?PM-KUSUMisasupply-sideintervention—itcanreducethecostofpowerpurchases.However,themainchallengeforDISCOMsisthedistributioninfrastructure.Inconsultationstopreparethisguidebook,manystakeholdersemphasizedtheimportanceofembeddingPM-KUSUMinbroaderstrategiesforreformingdistributioninfrastructure.Inparticular,statescanleveragetherecentlylaunchedRDSSforinfrastructureupgrades.ThestepsrequiredfortargetedinfrastructureupgradesandtoreduceadministrativecostshavebeenexplainedinSection3.2.1,sotheyarenotrepeatedagainhere.Instead,wefocusonlinkageswithenergyandwaterefficiencymeasures.4.2.3PromoteLinkagestoEnergyandWaterEfficiencyMeasuresInSection2.5.2,wediscussedhowincreasedaccesstoelectricitymightleadtoincreasedconsumptionandgroundwateruseincertainsituations.Thus,linkingthePM-KUSUMwithwaterandenergyefficiencypoliciescanbehighlydesirable,dependingonthestatecontext.Whiledesigningtheselinkages,statesneedtoconsidertheirimpactonthreekeystakeholders,asillustratedinFigure11:DISCOMs,farmers,andwaterbuyers.DirectCashIncentivesforEnergyConservationThemechanismofadirectcashincentiveforareductioninelectricityconsumption,proposedinthePM-KUSUMguidelines,wasexplainedinSection1.Itisproposedasamorepoliticallyfeasiblesubstituteformeteredpricingofagriculturalconnections.Forthebeneficiaryfarmer,itisanopportunitytoimproveincome.Itdoesnotaffecttheirirrigationcostiftheychoosenottoparticipate.However,waterbuyersmaybeaffectednegatively,asthewaterpricewilllikelyincrease.Pumpownerswillnowhaveanalternativeoptionforthesurplusenergyandwillnotbewillingtosellwaterunlessitmatchestheincometheywouldreceivefromsavingelectricity.Studiesofpastinterventionsthatinvolvedachangeinthecostofpowerorthesupplyhoursshowthatwaterbuyersaredisadvantagedifpricesincreaseorsupplyhoursreduce(seeBox13).Figure11.WEFlinkagesoffeedersolarizationDISCOMFarmerwithelectricconnectionsWaterbuyerImpactontotalelectricitydemandImpactonfarmers’selfconsumptionandfarmincomesImpactonthewatermarketIISD.org53ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingThedirectincentiveschemeisnotyetwidelytested,soproposingspecificpolicydecisionsindifferentagroeconomiccontextsischallenging.However,basedoninterviewsandastudyofrelevantliterature,wecansetoutseveralbroadprinciples.Twocriticalfactorsneedtobeconsidered:irrigationaccessandlong-termgroundwaterusesustainability.Wehavealsoassumedthatcost-reflectiveelectricitypricingisnotfeasibleinthiscontext.Figure12setsoutadecisiontreeidentifyinghowdifferentcombinationsofthesefactorscanleadtodifferentrecommendedactions.PromotingEnergyandWaterEfficiencyItisunlikelythatfarmerswillchangetheircroppingpatternssolelybecauseofthedirectincentive.InterviewswithimplementingofficialsofthePBPKinitiativereaffirmthiswithalackofcropdiversificationundertakenbyparticipatingfarmersinPunjab.Amodellingstudysuggeststhatevenwhenfarmerscanearnmoreincomebyshiftingtoless-water-consumingcropsandconservingenergyuse,variousotherfactorsliketheminimumsupportpriceforaparticularcroporvaluechainsforthecurrentcropmakeitdifficultforatransitiontohappen(Srinivasan&Neelakantan,2022).Anypotentialimprovementinwaterefficiencywillmostlikelybedrivenbyadoptingbetterirrigationpracticesorenergy-efficientdevices.Intheabsenceofawiderstrategyforinfluencingcroppingchoices,statesshouldfocusoneffortstopromote,first,energy-efficientpumpsand,second,morewater-efficientirrigation,asdetailedbelow.1.Energy-efficientpumpreplacementandcapacitorbankinstallationManyirrigationpumpsacrossIndiahaveverylowlevelsofefficiency.Studiesestimatepotentialenergysavingsof30-40%byshiftingtomoreefficientpumps(BureauofEnergyEfficiency,2019;Khobaragadeetal.,2021).ThismeansthatreplacingpumpsintargetfeedersunderPM-KUSUMcansignificantlydecreasethetotalloadand,correspondingly,therequiredsizeofthesolarplants.ThisispredominantlyabenefitforthestateandtheDISCOM.Itisunlikelytoaffectfarmerswithelectricpumpsandwaterbuyerssignificantly.Anotherlow-coststrategyforimprovingenergyefficiencyistoencouragetheinstallationofshuntcapacitorsatthemotorsofirrigationpumpsets.Thisisaninexpensivesolutionandisconsideredalow-hangingfruittoimproveefficiency.However,akeychallengeisthatitiseffectiveonlyBox13.Howchangingpowersupplyaffectswaterbuyers:LessonsfromWestBengalandGujaratWestBengalimplementedmandatorymeteringofagricultureconnectionsandconversionofbillingfromaflatratetoapro-rataregimein2000.Studieshaveshownthatthisseverelyaffectedonce-fledglinginformalwatermarkets,withimpactsonmanysmallandmarginalfarmerswhodependedonthemfortheirirrigationneeds(Mukherjietal.,2009).Similarly,inGujarat,theimpactassessmentofJyotiGramYojana,underwhichagriculturefeederswereseparatedandpowersupplyrestrictedtoeighthours,showedthatthewatermarketpricesincreasedsteeplyasthehoursofavailablepowerwerereduced(Shahetal.,2008).IISD.org54ImplementingSolarIrrigationSustainablyFigure12.Decisiontree—WhentoexploredirectincentiveschemesforenergyandwaterconservationIstheregoodirrigationaccessalready,suchthatfarmersarenotdependentonwatermarkets?Isthereariskofgroundwaterdepletion,noworinfutureprojections?Directincentivemechanismmayhelppromoteefficientirrigationandreduceagriculturalload.However,expertsbelievethatfarmersaregenerallyriskaverseandmightchoosetocultivatemorewiththeincreasedenergyaccessratherthanconservingwater.Cost-reflectivepricing(meteredpricing)isthelong-termsolution.Ifitispoliticallyinfeasible,statescanpilotadirectincentivemechanismasabridgetowardsit.However,thescale-upshouldhappenonlyafterrigoroustestingofthemodel.Differentobjectivesdemandcompetingactions:groundwatersustainabilityrequiresincentivizingwaterconservation,butitmaynegativelyimpactwaterbuyersintheshortterm.However,groundwaterdepletionwillalsomakeirrigationcostlierforwaterbuyersinthelongrun.Statescanpilotdirectcashincentives,butcareshouldbetakentoachieveparitybetweenwaterpricesandcashincentives,sothatthepumpownersintroducewaterconservationmeasureswithoutaffectingwatermarkets.Italsoneedsgoodcomplementarysupport(seenextsubsections).Thedirectincentivemechanismriskspotentialdisruptiontowatermarketsandisnotjustifiedbytheunderlyinggroundwatersituation.Focusneedstobeonincentivizingenergyefficiencypumpsandefficientirrigationpractices.KEYCONSIDERATIONSANDRISKSRECOMMENDEDACTIONSYESYESNONOIISD.org55ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingwhenamajorityofthefarmersinafeederadoptit,andhenceitrequiresacoordinatedoutreachstrategyfromtheDISCOM(Sagebieletal.,2016).Ifonlyonefarmerinstallsthecapacitor,equipmentdamagequiteoftenincreases.CHALLENGEThemainchallengeinpumpreplacementisfinancing.Withoutanincentivetolowerusageduetoaflatratetariffregime,farmerswillnotbewillingtopayforreplacements.AwidelyusedfinancingmodelistheEnergyServiceCompany(ESCO)model,whereathird-partyserviceproviderundertakesthepumpreplacementinafeederonbehalfoftheDISCOM.TheDISCOMrepaystheserviceproviderbasedontheestimatedenergysavings.Themaindrawback,however,isthatthefarmersdonothavemuchincentivetomaintainthepumpsproperlyand,inmanycases,implementpracticessuchasbypassingcapacitorstocounterpoorpowerquality.Further,duetonon-standardaccessories,suchaspipingandwires,theimprovedefficiencyquicklydeteriorates,reducingthebenefitforDISCOM(Khobaragadeetal.,2021).Insum,thefarmers'lackofincentivesmakesthefinancingmodelchallenging.SOLUTIONIntheabsenceofpro-ratapricingofelectricity,thedirectincentivemechanismmentionedabovecouldofferapotentialsolution.StatescouldachievesustainableenergyefficiencyimprovementsbycombiningtheESCOmodelwithdirectincentives.DISCOMscanbundlethepumpreplacementwiththepowerplantinstallationoroutsourceittoaseparateserviceprovider.Thismodelisyettobewidelytested,sostatesmaywishtoundertakepilotstudiesbeforescalingitup.Box14.CESL-Goapartnership:PumpreplacementincludedinthetariffConvergenceEnergyServicesLimited(CESL)haspartneredwiththestateofGoatoimplementauniquemodelunderPM-KUSUM,wheretheywillundertakeboththesolarizationofafeederandthereplacementofallpumpsinthefeederwithenergy-efficientpumps("CESLtoimplement,"2021).Thetariffdecidedfortheprojectcoversbothcosts.Inourinterviews,anofficialfromCESLmentionedthatthistariffislowerthantheaveragepowerpurchasecost.Thus,theDISCOMcanimplementdemand-sidemanagementwithouthavingtobearthecostupfront.IISD.org56ImplementingSolarIrrigationSustainably2.Water-efficientpracticesOnewaytoreducewaterandenergyrequirementsistoimproveirrigationefficiency.Irrigationefficiencycanbeimprovedprimarilyintwoways:1.Technologies:Micro-irrigationtechnologieslikedripandsprinklerirrigationcanimproveirrigationefficiency.However,theyrequirehighcapitalinvestmentandareunsuitableforsomecrops.SchemeslikePradhanMantriKrishiSinchayeeYojanaandAtalBhujalYojanahaveprovisionsforsubsidizingmicro-irrigationtechnologies.StateimplementingagenciescanworkwiththerespectivedepartmentstoexplorethepossibilityoftargetingtheschemesinthefeederareasselectedforPM-KUSUM.2.Techniques:Knowledgeinstitutionsinagriculturehavedevelopedanddocumentedwater-savingtechniquesfordifferentcropsacrossthecountry.Thesepracticesmostlydonotrequiresignificantupfrontinvestmentandrelyonfarmers'technicalcapacity.Forexample,raisedbedirrigation,alternativewetanddryirrigation,andtensiometer-basedirrigationaresomemethodsthatcanbeusedtosavewater(Surendranetal.,2021;Vattaetal.,2018).Newtechnologiesalsotypicallyrequiresomedegreeoftrainingintechniquetoensurethattheyareusedandmaintainedproperly.CHALLENGEOnekeychallengeinadoptingwater-efficientpracticeshasbeenthelackofincentivetoconservewater.Italsorequiresextensivecapacity-buildingexercisestobringbehaviouralchangestofarmers.SOLUTIONIfthedirectincentivemechanismshowspromisingresultsinpilots,thereisanopportunityforcoordinationbetweendifferentdepartments.LackofproperengagementwithfarmershasbeenoneofthemainchallengesfacedbyDISCOMsindemand-sidemanagement,andlackofincentivesforthefarmerhasbeenoneofthemainchallengesforagencieslikeagricultureandgroundwaterdepartmentstopromotewater-savingschemes.Differentdepartmentscanleverageeachothers'strengthsandplanforaholisticinterventionbycombiningadirectincentivemechanismwithwater-savingtechniques.Forthistooccur,thefollowingstepsshouldbetaken:1.ThefeedersforPM-KUSUMshouldbedecidedinconcurrencewithotherdepartments.2.Theagriculturedepartmentshouldtaketheleadonoutreachtofarmers.3.AgricultureknowledgeinstitutionslikeagricultureuniversitiesandKrishiVigyanKendras(KVKs)canplayacentralroleinorganizingcapacity-buildingworkshops.IISD.org57ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingBox15.Effectivecoordinationstructuresforwaterconservation:ExperiencefromPBPKinPunjabTheMGSIPA(n.d.)hasexaminedtheexperienceswiththePBPKschemeonwaterincentivesinPunjabinsomedetail.Thestudyfindsthattheschemecreatedamultilayeredinstitutionalstructurewithmechanismsforinteragencycoordination,aswellasverticalcoordinationbetweenseniorbureaucratsandfield-levelofficials.Thestudyalsofoundthatregularoversightofthechiefministerprovidedstrongpoliticalbackingandempoweredofficialstomakedecisions.Thescheme’simplementationreliedoninputfrommultipledepartmentsandrepresentativesofagriculturaluniversitiesandfarmers’commissions.OfficialsfromthestateDISCOM,however,highlightedthatdespiteaninitialpositiveresponse,supportfromotherdepartmentseventuallytaperedoffduetocompetingprioritiesduringtheCOVID-19pandemic.Thisdemonstratesthedifficultyofmaintainingcontinuousengagementacrossmanydepartmentsduringthescale-upofanyschemeintheabsenceofincentivesforcoordination.Athree-tiermonitoringandimplementingstructurewassetupforthePBPKscheme’simplementation,including:1.Astate-levelsteeringcommittee:Thiswaschairedbythechiefsecretary,withthesecretaryofpowerastheconvenor.Thecommitteeincludedthefollowingmembers:secretariesfromthedepartmentsofagriculture,planningandfinance,andwaterresources;thechairmanandmanagingdirectorofPSPCL(theDISCOM);vice-chancellorofPunjabAgricultureUniversity;andthechairoftheFarmers’Commission.Theprimaryroleofthiscommitteewastomonitorthescheme’sprogressandmakepolicy-leveldecisions.2.District-levelimplementingcommittee:Thiscommitteewaschairedbythedeputycommissionerofthedistrict,withthesuperintendingengineerofPSPCLastheconvenor.Thedistrictheadsofagricultureandsoilconservationaremembersofthiscommittee.Itfocusedontheschemeimplementationandsharingfeedbackwiththestate-levelcommitteeonissuesfacedbyfarmers.3.Field-levelimplementationcommittee:Thiscommitteewaschairedbythesub-divisionalofficerwiththeexecutiveengineerofPSPCLasitsconvenor.Theassistantdivisionalofficer(agriculture),sub-divisionalofficer(waterresources)andheadsofKVKswereitsmembers.4.3HowCanOtherDepartmentsandAgenciesSupportImplementation?SupportfromotherdepartmentsandagenciescansignificantlyimprovetheoutcomeofthePM-KUSUMscheme.Inadditiontoinformationsharing,proactiveparticipationfromtheseactorscanboostimplementation.Thedegreeofparticipationrequiredvariesanddependsontheschemedesign.IISD.org58ImplementingSolarIrrigationSustainablyTable8.RelevantagenciesandtheirsupportingrolesDepartmentoragencyFunctionsLandRevenueDepartment•Informationsharing:Shareclearinformationonproceduresforland-useconversionofagriculturallandsforsolarpowerandrestrictionsinlandleasing.•Facilitationofland-useconversionandleasing:Land-relatedproceduresforComponentAhappenatthedistrictortaluklevel,requiringinformationandsupportforfieldofficers.Thedepartmentcandesignateastate-levelofficertocoordinatefieldofficersinliaisonwiththeSIA;andtolinkfarmersanddeveloperstothedepartmenttohelpaddressgrievances.•Supportingalandaggregationinitiative:IftheSIAplanssuchaninitiative(seeSection2),thedepartmentcanhelpassesslandsandspeedupapprovals.•Supportingdata-basedsolutions:ThedepartmentcanexploreintegrationwithdigitallandrecordsiftheSIAplansIT-basedsolutionstolandchallenges.SLBC•Informationsharing:Shareinformationonbankguidelinesandproceduresforfarmerstoobtainloans.•Monitoringofloansanctioning:SLBCmeetingstypicallyoccuronceevery3months.TheSIAcanusethisplatformtomonitorprogressinloansanctioningandidentifyandresolvebottlenecksintheappraisalandsanctioningprocess.•Trainingandcapacitybuilding:SLBCscanorganizetrainingsessionsforzonalloansanctioningcommitteesonPM-KUSUMschemeComponentA.AgricultureDepartment•Informationsharing:Supportingfeederselectionbyprovidingground-levelinformationonpowersupplysituationandirrigationpractices.•Outreachwithfarmers:Feedersolarizationanddirectincentivemechanismsrequireintenseoutreachactivitieswithfarmers.Theagriculturedepartmenthasthemostreliablegrassrootsnetworkandcansupportoutreach.•Training,capacitybuilding,andschemeconvergence:Thereisgreatscopeforconvergencebetweenschemesonwaterefficiencyandthedirectincentivemechanism.TheagriculturedepartmentcanplantotargetsuchschemestofarmersinPM-KUSUMfeeders.Theknowledgeinstitutionsassociatedwiththedepartment,likeagricultureuniversitiesandKVK,canalsosupportinconductingtrainingandcapacitybuildingoffarmersontechniques.IISD.org59ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingDepartmentoragencyFunctionsGroundwaterDepartment•Informationsharing:Supportingfeederselectionbygivingground-levelinformationongroundwater.•Long-termimpactstudy:Theimpactofsolarizationongroundwaterisnotyetstudiedatscale.Thedepartmentcaninitiatemonitoringinthetargetfeederstogeneratelearningforfuturepolicy-making.•Schemeconvergence:ThereisgreatscopeforconvergingschemeslikeAtalBhujalYojana,whichthedepartmentimplementswiththePM-KUSUMscheme.Thedepartmentcantaketheinitiativeinthisregard.IISD.org60ImplementingSolarIrrigationSustainably4.3.1WhatAretheMechanismsforCoordinationBetweenDepartments?Well-definedmechanismscanhelpsustaincoordinationbetweendepartments.Inourinterviews,stakeholdersfromalldepartmentsagreedontheneedforcoordination.However,theyalsohighlightedthechallengeofsustainingengagement.Whenthereisnopropersharingofresponsibilitiesandchannelsofcommunication,coordinationcanfizzleoutandleadtodelaysinimplementation.Ourpreviousguidebookonsolarpumpshighlightedfourmechanismsofcoordinationbetweenwater–energy–foodschemes.WerecommendthesamemechanismsforComponentsAandC.1.Interdepartmentalbodies:ThisisadedicatedworkingunitcomprisingofficialsfromallconcerneddepartmentsthatwillactastheSIA.Theunitwouldbeheadedbyasecretaryorjoint-secretarylevelofficialfromtheenergydepartmenttoexpeditedecisionmaking,facilitatetimelyapprovals,andgainthenecessarysupportfromotherdepartmentsandfinancialinstitutions.Theofficialsfromdifferentdepartmentsandagencieswouldtypicallybeinvolvedinexecutivefunctionsandschemeimplementation.2.Convergenceandsteeringcommittees:Thisisalighteroptionthandedicatedworkinginterdepartmentalbodies.Thecommitteestypicallyincludeseniorofficialsfromdifferentdepartmentsandareconvenedmonthlyorquarterlytomonitorschemeprogress,discusschallenges,andtakedecisionsonthenextactions.Inthiscase,theSIAremainsaseparateentity.ThesteeringcommitteemonitorsandadvisestheSIA.3.Delegationofplanningandimplementationresponsibilitiestodifferentdepartments:Thismodelfocusesonestablishingclearlydefinedresponsibilitiesfordepartments,drawingfromtheirstrengths.Coordinationandtime-boundimplementationcanbefacilitatedbydevelopingadashboardfortrackingprogressontasksthatisvisibletoallstakeholders.4.Partnershipswithfinancialinstitutions:Partnershipwithfinancialinstitutionsiscriticalforenablingloanaccessforbothfarmers(ComponentA)andthestate(ComponentC).InmoststateswhereComponentAhasprogressed,thestatehasformedaclosepartnershipwithoneortwoscheduledcommercialbankstoextendloanstofarmers.Similarly,scalingupComponentC(FLS)requiresadequatefinancingforDISCOMstoimprovetheirdistributioninfrastructure.ThiscanbeachievedthroughpartnershipswithinstitutionssuchastheNationalBankforAgricultureandRuralDevelopmentandthePFC.IISD.orgSECTIONSUMMARY61SectionSummaryDecentralizedsolarpowerplantsimpactmultiplesectorslikepower,agriculture,andwater.Hence,awell-thought-outimplementationdesignplanisneededforstatestomaximizethescheme’soutcomes,withinputandparticipationfromallrelevantdepartments.Participationofallconcerneddepartmentsisdesirable,butsharingresponsibilitiesequallybetweenmultipledepartmentscanslowimplementation.Hence,thereneedstobeaproperbalanceforoptimalcoordination.TheSIAisresponsibleforimplementationandmustensurecoordinationwithotherdepartments.RoleoftheStateImplementingAgency1.FacilitatinginformationexchangeOurconsultationssuggestthatmanynon-implementingstatedepartmentsareunawareoftheschemeduetoitsnewness.Infacilitatinginformationexchangewiththesedepartments,theSIAwillalsogainimportantinformationonland-usechangeregulations,thelocalgroundwatersituation,andgeographicalareasforotherschemes.ItisrecommendedthatSIAsorganizeaninceptionworkshopandsubsequentcoordinationmeetingswithagricultureandlandrevenuedepartments,groundwateragencies,andSLBCs.AnindicativelistofkeyinformationtobesharedandcollectedisprovidedinTable7ofSection4.2.UndertakinginfrastructureplanningTomaximizethescheme’soutcomes,theSIAshould:°Identifythemostsuitablefeedersforthescheme°Decidetheoptimumcapacityoftheplants°Supporttheschemewithcomplementaryactivitiestostrengthenthegrid.Tomaximizetheeconomicoutcomes,theSIAshouldselectsubstationswithahighagricultureloadandasignificantnon-agricultureloadtopreventtheupstreamflowofpowerinthenon-irrigationseason.Targetingsubstationswithpoor-qualitypowermayincreasethescheme’ssocialoutcomesthroughimprovedpowerqualityforfarmers.MNREhasissuedsizingguidelinesfortheupperlimitofsolarplantseligibleforCFA.SIAsarerecommendedtoconductabaseloadanalysisatasubstationlevelandoptimizeplantsizetoreduceupstreamflowinthenon-irrigationseason.3.PromotinglinkagestoenergyandwaterefficiencyLinkingPM-KUSUMwithwaterandenergyefficiencypoliciesishighlydesirable.Butstatesneedtoconsidertheimpactofapolicyonthreestakeholders—theDISCOM,farmerswithelectricityconnections,andfarmersdependingonwatermarkets.IISD.orgSECTIONSUMMARY62PromotingEnergyandWaterEfficiencyStatesneedtoselectandidentifytherightsetofmeasures.Theimpactsofsomeofthesemeasuresarewellestablished,andothersrequirepilottestingbeforescalingup.Inlocationswheredirectcashincentivescanworkandaredesirable,statescanusethemasatooltoincentivizeenergyandwaterefficiency.Figure13.MeasurestoincreaseefficiencyandsuitabilityinspecificcontextsSupportfromotherdepartmentscansignificantlyenhancethescheme’simplementation.ThefunctionsofdifferentagenciesareprovidedinTable8ofSection4.ProvenmeasuresforincreasingefficiencyEnergy-efficientpumpreplacement:Studiesshowpotentialsavingsof30%–40%energythroughpumpreplacement.However,alackofincentivestomaintainthepumpeffiencyquicklyleadstodeteriorationinafewyears.Capacitorbankinstallation:Installationofcapacitorbanksattheloadend(i.e.,withthemotor)significantlyimprovesthepowerfactor.However,akeychallengeisthatitiseffectiveonlywhenmostfarmersinafeederadoptitandhenceneedacoordinatedapproachfromtheDISCOM.Water-efficientpractices:Water-efficientirrigationtechnologiesandtechniquescansignificantlysavewaterandenergy.However,theabsenceofincentivesandneedforcapacitybuildingmakeitchallengingtoimplementatawiderscale.MeasuressuitableincertaincontextsDirectincentivemechanism:ThedirectincentivemechanismunderPM-KUSUMmayhelpreduceelectricityandwaterconsumptioninspecificcontextsbutmayalsoincreasethewatermarketratesanddisadvantagewaterbuyers.Thenetfinancialbenefitorcostofimplementingdirectincentivesforstatesrequiresfurtheranalysis.AdecisiontreeonwhethertoexplorethedirectincentivemechanismornotisprovidedinFigure12.IISD.orgSECTIONSUMMARY63FurtherGuidanceandResourcesGoel,S.,Murali,R.,Rahman,A.,Swain,P.,Viswanathan,B.,Agrawal,S.,Beaton,C.,Govindan,M.,Jain,A.,&DebajitPalit.(2021).Implementingsolarirrigationsustainably:Aguidebookforstatepolicymakersonmaximizingthesocialandenvironmentalbenefitsfromsolarpumpschemes.InternationalInstituteforSustainableDevelopment.https://www.iisd.org/publications/implementing-solar-irrigation-sustainablyMinistryofNewandRenewableEnergy.(2021).Solarplantcapacitycalculationunderfeederlevelsolarization.PrayasEnergyGroup.(2021,April19).AgriculturesolarfeedersinMaharashtra.https://energy.prayaspune.org/power-perspectives/agriculture-solar-feeders-in-maharashtraSagebiel,J.,Kimmich,C.,Müller,M.,Hanisch,M.,&Gilani,V.(2016).Enhancingenergyefficiencyinirrigation:Asocio-technicalapproachinSouthIndia.SpringerInternationalPublishing.https://doi.org/10.1007/978-3-319-22515-95.0LearningByDoingIISD.org65ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoing5.1WhyIsItImportanttoAdaptByLearning?Whendeployedeffectively,decentralizedsolarplantscanhelpstatesreaptheeconomic,social,andenvironmentalbenefitsofsolarirrigation.However,achievingallofthisiscomplicated.Manyimplementationchallengescanemerge,suchasadministrativebottlenecks,financingconcerns,andotherissuesoutlinedintheprevioussections.Someofthesechallengeshavealreadybecomeapparentinthescheme’sfirst-moverstates,butotherunexpectedoutcomesmayyetcontinuetoemergeindifferentcontexts.Schemeoutcomesultimatelydependontheunpredictablebehaviouralresponsesofdifferentstakeholders,likefarmersanddevelopers,andtheabilityofSIAstoremainresponsiveandagileacrossvariousaspectsofimplementation.Therefore,“learningbydoing”isessential:gatheringdataonimplementationandusinglearningsfromthatdatatorefinedeploymentplanssotheschemecanbeoptimizedformaximumbenefits.Thissectionhighlightssometoolsandapproachesthatstatescanuse,particularlytheSolarEnergyDataManagement(SEDM)platformandfeeder-levelmonitoring.ThePM-KUSUMschemeguidelinesalsoprovideanopportunityforstatestotestmanynewpolicyinnovations,suchaswaterincentivesandagrivoltaics.Waterincentivesareapolicytoolthatbalancesincreasingdemandforirrigationwithfinitegroundwaterreserves.TheyneedtobecomplementedwithmeasuressuchassupportforDISCOMsindeterminingtheappropriatebenchmarkconsumptionlevel,aswellasoutreachmeasurestoaddressfarmerapprehensionaboutmeteringandwaterconservation.Agrivoltaicsisakeytechnologyofinterest.Withtheincreaseinsolarpowercapacity,thereisaconcomitantriseinlandrequirementsimpactingthewater–energy–foodnexus.Agrivoltaicsoffersapotentialsolutiontothisfood–energyconflictforlandandmaygrowinimportanceinthecomingdecade.Agrivoltaicscanalsoincreasethetotalpossibleincomestreamsforfarmerswhoselandisusedforsolarpowerproduction.Theseinnovationshavebeenpilotedinafewprojects,butscalingthemupatastatelevelwillrequirestrategiestotestthemoutindifferentcontextsandtomonitorandassesstheirimpacts.5.2ImplementingMonitoringandEvaluationAlearning-by-doingapproachforscalingupComponentsA&C(FLS)requiresawell-definedmonitoringandevaluationframework.Theframeworkshouldclearlyidentifytheparametersandtoolsformonitoringandthetimelinesforevaluation.5.2.1WhatAretheToolsAvailableforMonitoringandEvaluation?Muchprimarydataonpowergenerationandconsumptioncanbecapturedusingexistingtools:•SEDMplatform:UnderPM-KUSUM,MNREhasestablishedanSEDMplatformtoconsolidatedatafromallremotemonitoringsystems(RMS)installedinsolarirrigationsystems.InthecontextofComponentsA&C(FLS),therearetwotypesofRMS:°RMSfromthesolarpowerplant(forComponentsA&C[FLS]):TheRMSinstalledattheinterconnectionpointwillsharedataonsolarpowergenerationdataIISD.org66ImplementingSolarIrrigationSustainablywiththeSEDMportal.Thesolargenerationdatacanbeusedtocapturecriticalinformationlikethepowerplant'sCUF,gridavailability,andthegenerationprofile.°RMSfromindividualpumps(forComponentC[FLS]):Ifstatesintendtoimplementthedirectincentivemechanismorinstallmetersatconnectionsinthetargetfeeder,theycanintegratetheassociatedRMSwiththeSEDMportal.TheRMScancapturedataonenergyconsumptionandpumpusagepatterns.•Feedermeterdata:Moststateshaveimplementedmeteringatthefeederlevel.Thesemeterscangivebaselinedataonpumps’averagepowerconsumptionandthevoltagestatusinthefeeder.IntheabsenceofanyRMSonindividualpumps,theycanalsoactasaproxyforconsumptiondataaftertheschemeimplementation.ForComponentC(FLS),statescancomparetheRMS-generateddataandthebaselinefigureforimpactevaluation.Dataonaspectsotherthanenergy,includingcropandgroundwaterdata,isnotusuallyavailableatafeederorvillagelevel.HencetheSIAwillhavetoworkwithotherconcerneddepartmentsbasedontheparametersitwouldliketocapture.Theyarementionedinthenextsubsection.5.2.2WhatParametersShouldStatesMonitor,andHowCanTheyDoIt?Therearefourbroadcriteriaofschemeimpactthatthestatecanevaluate.IISD.org67ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingEconomicImpactontheStateThisdependsonthesolarpowergenerationandhowmuchofitisconsumedwithinthesubstation.Table9.MeasuringeconomicimpactoftheschemeParameterSourceTotalenergygenerationfromsolarpowerplantRMSdatafromthesolarpowerplantThecoincidenceofsolarpowergenerationandconsumptionwithinthesubstationRMSdatafromthesolarpowerplantandfeedermeterdatafromthetargetfeeder(s)ImpactonFarmers'EnergyAccessThisdependsontheprevailingelectricitysupplysituationandhowsolarizationchangesthissituation.Table10.Measuringimpactonfarmers'energyaccessParameterSourceEnergyconsumptionbyfarmer.IntheabsenceofameterorRMSatthepumps,feedermeterdatacanbeconsideredtoestimateaverageenergyconsumptionbeforeandaftersolarization.Inaddition,dataonpumpsetsizeneedstobeconsideredincasefarmersupgradethemaftersupplyimprovements.Voltagelevel:Voltageusuallydropsfromthesubstationtowardtheendofthefeeder.Thefeedermetergivesthevoltagevalueatthebeginningofthefeeder.Thiscanbeagoodproxyfortheoverallvoltagelevel.DISCOMscanalsoundertakevoltagemonitoringindifferentbusesofthefeeder.Farmers’cropchoicesandproductivity.Primarysurveyofbeneficiaryfarmers,incoordinationwiththeagriculturedepartmentandagricultureknowledgeinstitutions.Intangiblebenefits,includingconvenienceduetoashiftinpowersupplytodaytime.Primarysurveyofbeneficiaryfarmers,incoordinationwiththeagriculturedepartmentandagricultureknowledgeinstitutions.SocialImpactoftheSchemeEvaluatingthedistributionequityoftheschemerequirescloseengagementwithotherdepartments.IISD.org68ImplementingSolarIrrigationSustainablyTable11.MeasuringsocialimpactoftheschemeParameterSourceLandsizecategoryofthefarmersbenefitingfromtheschemeTheSIAwouldneedtoconductapreliminarysurveyofthefarmersincoordinationwiththeagriculturedepartment.IfthestateisinstallingRMSswithindividualpumps,thisdatacanbeenteredintotheSEDMportal.WaterpricesinthelocalwatermarketItisverydifficulttocaptureinformalwatermarketdynamics.SIAswouldneedtousetheestablishednetworkofagriculturedepartmentstogatherpricedata.ImpactonGroundwaterTheeffectofsolarizationongroundwaterwillbevisibleonlyinthemediumtolongterm.Further,itisnoteasytoattributeavariationingroundwaterlevelstoanysinglesource.Hence,statesareencouragedtouseenergyconsumptiondataasaproxyforimpactsintheshortterm.Table12.MeasuringimpactonthegroundwaterParameterSourceWaterconsumptionComplementenergyconsumptiondatawithsurveystoidentifytheaverageenergy-to-waterconversionrate,whichdependsonpumpefficiency.Groundwaterlevel(longterm)TheSIAscancoordinatewiththegroundwaterdepartmenttoestablishmonitoringwellsandpiezometersinthefeederarea,whichwillprovidedataonlong-termchangesinthewaterlevel.5.3PilotingandEvaluatingInnovativeAspectsofSchemeDesignforSustainabilityAtthetimeofwriting,rapiddeploymentisapriorityforPM-KUSUM,followingchallengingyearsforimplementationduringCOVID-19.Inthiscontext,pilotinginnovativeideascanseemlikeadistraction.Nonetheless,werecommendthatstatesstarttopilotandevaluatemethodstomaximizeschemesustainability.Suchpilotscanbeorganizedalongsideasmallshareofnewprojectsandreceivesupportfromexternalpartners.Itcantake1or2yearsforsuchexperimentstoproduceknowledgethatisreadytosupportlarger-scalerollout—bywhichtime,theymaybeinhighdemand.IISD.org69ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoing5.3.1EfficiencyIncentivesandthePBPKSchemeinPunjabThefirstphaseofthePBPKschemeachieveda33%enrolmentamongthetargetedfarmersinsixfeeders(MGSIPA,n.d.).Consultationswithexpertsandimplementingofficialssuggestthiswaslargelydrivenbyintensiveoutreachcampaignstoconvincefarmersintheinitialfeederstosignup,aswellasthroughthetimelypaymentoftheincentivebytheDISCOMtofarmers.ThesecondphaseofthePBPKpilotwasdisruptedbytheCOVID-19pandemicandfarmerprotests,whichledtoalimited4%ofthetargetedenrolmentin250feeders(Table13)(Mitraetal.,2022).AstudyofthePBPKschemecarriedoutbyIWMIfoundthatthecombinationofdaytimeelectricityprovisionandcashincentivesforunusedelectricityledtofarmersreducingtheirself-reportedirrigationhoursbyatleast7.5%andupto30%,withoutaffectingpaddyyields(Mitraetal.,2022).Thestudyalsofoundareductioninelectricityconsumptionatthetreatmentfeederscomparedtothecontrolfeeders.However,therewasnosignificanteffectonpumpinghoursfromtheuninterrupteddaytimeelectricitysupplyalone,suggestingthatashiftinelectricityandgroundwaterpumpingbehaviourwilldependontheentitlementandcashincentiveofferedundertheschemecombinedwiththedaytimesupply.However,interviewedstateofficialsandexpertscautionedthatmoredataisrequiredfromalargersamplesizebeforeanydefinitiveconclusionsaredrawnregardingthescheme’simpactonelectricityandgroundwaterconsumption.ThePBPKpilotschemeincludedseveraluniquemeasuresinbothdesignandimplementationthatcanhelpaddresssustainabilityconcernsofsolarirrigation.Themainfindingsincludethefollowing:DirectBenefitsTransferSchemeforAgricultureThePBPKpilotschemeusedadirectbenefitstransfer(DBT)modeltoincentivizefarmerstouseelectricityandwaterjudiciously.PBPK’sdesignisbasedononeofthreeDBTmodels,wherefarmersdonotreceiveanupfrontcashincentive(Mitraetal.,2022).Theyareinsteadallocatedaseasonallyadjustedpredeterminedamountofelectricitybasedontheircapacity(HP)ofconnectedloadandarepaidamonetaryincentivedirectlyintheirbankaccountsiftheyuselessthantheirallocatedconsumption.Theelectricityconsumptionoffarmersenrolledintheschemeismonitoredusingsmartmeters.AsavailingcashincentivesunderPBPKarelinkedtoTable13.EnrolmentinthePBPKschemeNumberoffeedersEnrolledfarmersTargetEnrolled%PBPKPilotPhase1630994233%PBPKPilotPhase22502,20051,2804%Total2562,50952,1504%Source:MGSIPA,n.d.andauthors’analysis.IISD.org70ImplementingSolarIrrigationSustainablyelectricityconsumption,aninterviewedexpertsuggestedthatfarmerswerekeentoinstallmetersintheirfieldsinthescheme’sfirstphaseinsteadofpreviouslyresistingthem.However,limitedenrolmentinthesecondphasehighlightsthechallengeofscalingupmeteringacrossthestate.AspreviouslyoutlinedinBox3,astudyfoundthatthewateruseofparticipatingfarmerswaslowerthanfarmerswhochosenottoenrol(Mitraetal.,2022).Context-SpecificApproachtoFixingQuotaUnderthePBPK,anaveragemonthlyelectricityquotabasedonthepumpmotorcapacitywasfixedforeachagriculturefeeder(MGSIPA,n.d.).Theformulausedtodeterminethequotawasbasedonthepreviousyear’selectricityusagedividedbythetotaltubewellloadatafeederlevel.Theaveragewasworkedoutonaseasonalbasiswithahigherallocationforpaddy,asitisamorewater-intensivecropandaloweraverageforthenon-paddyseason.Consultationswithexpertsinvolvedinthescheme’simplementationsuggestedthatlandholdingsizewasabettermeasureforthebaselinecalculationtopreventtheoverestimationofthequota.However,theelectricityusage-basedquotawaschosenforpracticalreasons.FocusonWater-SavingTechniquesinDemonstrationFarmsThestatecreateddemonstrationfarmsonschemefeederstohighlightthebenefitsofwater-savingtechniquesandresource-conservationtechnologies(PSPCL,2022).Statescouldconsidersimilardemonstrationstopromotetheadoptionofmicro-irrigationandotherconservationtechnologiesalongwithsolarirrigation.However,anevaluationstudydidnotfindanychangesinfarmingpractices,suchaschangesincropchoice,Photo:AkashSharma/CUTSIISD.org71ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingshiftingtoashorter-durationpaddyvariety,oradoptingimprovedwatermanagementtechniquessuchasdirectseedingofriceandbunding(Mitraetal.,2022).Thisislikelyaconsequenceofthestudybeingconductedinthefirstyearofenrolmentformostfarmers,whereasbehaviouralchangeandefficientfarmingpracticestakemoretime(Gulati,2021).Coordinationstructuresandincentivesforimplementingagencies:Asidefromwaterconservation,thePBPKdesignalsofocusedoncreatinginstitutionalstructuresthatpromoteeffectiveinteragencycoordinationandbetterimplementation.Consultationswithstateofficialsandresearchinstitutesthatwereinvolvedinpilotimplementationhighlightedtheseascriticalinaddressingsustainabilityconcerns.Someofthekeyelementsincluded:1.Consultationswithfarmers,agricultureandwaterexperts,andthefieldstaffofDISCOMs,toadjustthescheme’sdesign.Theimplementationoftheschemealsoreliedonthreeindependentadvisorswhowereexpertsintheagriculture,powerandwatersector.2.Ensuringhigh-levelpoliticalandadministrativecommitmenttotheschemethroughthechairingofimplementationbythechiefsecretaryandregularbriefingmeetingswiththechiefminister.Apartfromthis,theschemeestablishedtransparentcommunicationchannelsbetweenagencies(power,water,agriculture,extension,andfinance).3.Amultilayeredandempoweredinstitutionalmechanismwascreated(aselaboratedearlierinBox15)tomonitorimplementationandmaketimelydecisions.4.Inputsfrommultiplestakeholders,includinggovernmentdepartments,representativesofagriculturaluniversities,andfarmers’commissions.InclusionofTenantFarmersEligibilitycriteriaforenrolmentintheschememandatedthattheparticipantshouldbeaconsumerofanagriculturalelectricityconnection(GovernmentofPunjab,n.d.).Thisinitiallyexcludedtenantfarmersthatleasedlandaswellasfarmersthatinheritedlandfromtheirancestors.Despitetheseinitialhurdles,amendmentswereintroducedtoenablejointelectricityconnectionsinthenameoflegalheirsandtoenablecashtransferoftheincentivedirectlytotenantfarmersaftertheenrolmentofthelandowner.Thishighlightstheneedforanadaptiveapproachbythestatetoovercomeemergingimplementationhurdles.5.3.2AgrivoltaicsAgrivoltaicsreferstothesimultaneoususeoflandforagricultureandphotovoltaicpowergeneration.ThisisachievedbydesigningasolarpowerplanttoenablecultivationbetweenorbelowthePVpanels.AgrivoltaicsisstillintheearlystagesofdeploymentinIndia,withonlyahandfulofpilotsattemptedsofar(TheNationalSolarEnergyFederationofIndiamaintainsaninventoryofthesepilots,whichreaderscanaccessonthiswebsite).Thismeansthatknowledgegapsexistatvariousstages.Thebackgroundpaperonagrivoltaicsthatsupplementsthisguidebook,investigatedtheseknowledgegapsindetail.Inthissection,wepresentthemainrecommendationsforthestatetoadoptalearning-by-doingapproachinagrivoltaics.Thepilots,todate,havedemonstratedthetechnicalfeasibilityofgrowingcertaincropswithanagrivoltaicssetup.Still,theyneedtobereplicatedwithviablebusinessmodelsIISD.org72ImplementingSolarIrrigationSustainablyintherealworldandexploredinarangeofcontextsacrossthecountry.Inparticular,theuseofagrivoltaicsincombinationwithmoremainstreamcrops,likepaddyandwheat,isyettobepiloted.Hence,itiscriticalforstatestofurthertestandevaluatetheinnovativeaspectsofthemodelbeforescalingup.BusinessModelsofAgrivoltaicsScalingupagrivoltaicsrequiresfeasiblebusinessmodels.KnowledgeinstitutionsanddevelopershavesofarledthepilotsinIndia,withfarmershavingonlyasecondaryroleinthesystem.Mainstreamingagrivoltaicsneedsthedevelopmentofnewbusinessmodelswiththeprimaryinvolvementoffarmers.Thefollowingpotentialbusinessmodelshaveemergedfromourconsultations.1.ModelI–Partnershipbetweenfarmeranddeveloper:Farmeranddevelopernegotiateandco-designthesystem.Thefarmercontinuestheownershipofcultivationwithaminorlandlosstotheagrivoltaicssetupbutgetscompensatedthroughlandrent.Thedevelopermanagessolargeneration.2.ModelII–Systemwhollyownedandoperatedbyoneentity:Anindividualfarmer,agroupoffarmers,oradeveloperownsandoperatestheentiresystemtomaximizerevenuefromagivenlandparcel.3.ModelIII–Developerasaprimarypromoter,farmerasapartner:Inthismodel,agricultureisnotusuallythecentraldesigncriteriaforthepowerplantbutasecondaryactivity.Inaridareaswherecropcultivationisnotviableinsummer,thismodelmayofferfarmersanopportunitytousethelandallyearround.Thesuitabilityofeachbusinessmodelmayvarywiththeagroeconomicsituation.ModelsI&IIarebestsuitedwherethelandrentisveryhighandthereisagoodmarketforhigh-valueandexoticcrops.ModelIII(developerasaprimarypromoterandfarmerasapartner)isnotprevalentinindustrializednationsandwillnotqualifyasagrivoltaicspermostcountries’standardsanddefinitions.Theimperativeofprotectingagriculturallanddrivestheirstandardsanddesigninagrivoltaics.However,inaridandsemi-aridregions,excessevapotranspirationisthemainconstraintforcropgrowth,andagrivoltaicscanpotentiallysupportincreasingthecultivatedareaintheseregions.ModelIIIcanbeapotentialoptionwherelandisnotcultivatedduetopoorproductivity.However,careshouldbetakennottoapplythismodelinproductiveandcultivatedlands.Thebackgroundpaperonagrivoltaicsfurtherelaboratesonthispoint.Stakeholdersarebestabletochooseforthemselveswhichbusinessmodelsaremostsuitable.States,however,canplayafacilitativerolebyexecutingthefollowingfunctions:•Organizingstate-levelworkshopsfordevelopersandfarmers:StatescaninvitetheimplementorsofpilotsacrossIndiatosharetheirfindings.TheSIAcancoordinatewiththeagriculturedepartmenttogetentrepreneurialfarmerstoparticipateintheworkshop.•Encouragingparticipantstakeholderstosubmitproposalsonagrivoltaics:Thisislikelytoincludeanyrequeststhatstakeholdersmayhaveforincentivesfromthestate.Statescanconsidersmallincentiveslikethetransferofperformance-basedbenefitstothedevelopersoranadditionalincentiveoverandabovethestandardtariffbasedonmeetingvariousconditions.IISD.org73ImplementingSolarIrrigationSustainablyIntroductionContextFinancingImplementationLearningbyDoingStatescanevaluatetheoutcomesofsuchspecialprojectstocreatestandardizeddefinitionsforfutureprojects.Suchstandardizeddefinitionsareimportantinthefutureifstatesintendtopromoteagrivoltaicsatalargescale.Lackofstandardizationwillleadtoregularsolarpowerplantownersfree-ridingonsuchincentiveswithminortweaksinthedesign.BasedonareviewofliteraturefromexistingpilotprojectsinIndiaandconsultationswithpilotprojectimplementers,belowisanindicativelistofparametersthatshouldbeconsideredforevaluatingagrivoltaics.1.Techno-commercialevaluation:Multipledesignsofagrivoltaicsareavailablewithvaryingheightsandstructuretypes.Eachhasdifferentadvantagesanddisadvantages.Stateswoulddowelltoworkwithfirstmoversonplanningasystematictechno-commercialevaluationrightfromthebeginning,exploringhowdifferenttechnicalcharacteristicscaninfluencelikelycommercialperformance,includingconvenienceandprofitability.Suchassessmentsshouldalsoconsiderstrategiesforovercomingtheincreasedcostbarriersassociatedwithagrivoltaics.2.Effectivelandareaforagricultureandcropyield:ForbusinessModels1and2,statesshouldevaluatetheextenttowhichproposalsandprojectshavechangedtheeffectiveavailableareainthefieldforagriculturalcultivation.Basedoninitialprojects,statescanprescribeaminimumpercentageofcultivatedareatoberetainedinthefuture.Similarly,thecropyieldchangeshouldbeevaluatedusingabaselineestimate.Statescaninvolveagriculturalknowledgeinstitutionsintheevaluation.3.Impactonwaterresources:Agrivoltaicscanpotentiallycreateopportunitiestoimprovewaterefficiency.Inprinciple,thewaterusedforpanelcleaningcanalsobeusedforirrigation.However,duringinterviews,developersreportedpossiblecomplications,particularlywhensharingresourcesbetweenthefarmerandthedeveloper.Statesmustmonitorwaterusagecharacteristicsindifferentcontextsandplanscale-upaccordingly.4.Shadingcharacteristicsandguidelinesforcropselection:Theoptimumagricultureoutputfromagrivoltaicsisobtainedwhensuitablecropsarechosendependingonshadingconditions.Withinanagrivoltaicssetup,theinsolationlevelsvarythroughouttheplot.Optimizingoutputrequiresproperzonationbasedonshadingcharacteristics,whichinturndependontheagrivoltaicsdesign.Forscale-up,thestatesshouldencouragestakeholderstocreateastandarddocumentthatcanbeusedforfuturereplication.Thecreationofsuchastandarddocumentcouldbeoneconditionforreceivingfinancialincentives.StatescanworkcloselywithKVKsandagricultureuniversitiestoimplementthisrecommendation.5.Operationalchallenges:Becausethetechnologyisstillinitsinfancy,someoftheoperationalconcernsofagrivoltaicsareyettobedocumentedwell.Ourpreliminarystudyshowedconcernslikeacceleratedstructuraldecayduetohumidmicro-climatesandchallengeswiththemaintenanceandsafetyduetoraisedsolarPVpanels.Statesneedtoworkwithfirstmoverstoidentifysuchchallengesanddevelopguidingpointsforthefuture.IISD.orgSECTIONSUMMARY74SectionSummaryPM-KUSUMComponentAandC(FLS)hasnotyetbeenwidelydeployed.Newchallengesforimplementationandsustainableschemeoutcomesmayariseinthefuture.Furthermore,policyinnovationsrecommendedinthePM-KUSUMschemeguidelines,suchaswaterincentivesandagrivoltaics,canoffersustainablesolutionsforstates.However,theyrequireevidence-basedstrategiestosuitdifferentcontexts.Henceitiscriticaltolearnbydoing—gatherdataonimplementationandconstantlyrefinedeploymentapproachesbasedonthedata.StrategyforMonitoringandEvaluationFigure14.StrategyformonitoringandevaluationStatescanallocateasmallshareofnewprojectsforpilotinginnovativemodels,includingwaterincentivesandagrivoltaics.Thisapproachwouldgenerateevidenceforsubsequentscale-upofthesemodelswithouthamperingcurrentdeployment.Weexploredtwokeyinnovativemodels:i)efficiencyincentivesforwaterconservationandii)agrivoltaics.TheSolarEnergyDataManagementPortalConsistsoffunctioningdatafromthedistributedpowerplantandthepumpsinthetargetfeederFeedermeterdatafromthetargetfeederForbaselinedataonenergyconsumption.IfRMSisnotinstalledwithpumps,itcanalsoactasaproxyforconsumptiondataaftertheschemeimplementationToolsforgatheringdataImpactonfarmers’energyaccess→Energyconsumptionbyfarmer→Voltagevariations→Farmers’cropchoices→IntangibleimpactsduetotheshiftinpowersupplytodaytimeEconomicimpactonthestate→Totalenergygenerationfromsolarpowerplant→ThecoincidenceofsolarpowergenerationandconsumptionwithinthesubstationImpactongroundwater→Waterconsumption→Groundwaterlevel(longterm)Socialimpactofthescheme→Landsizecategoryoffarmersbenefitingfromthescheme→WaterpricesinthelocalwatermarketCriteriaandparametersforevaluationIISD.orgSECTIONSUMMARY75EfficiencyIncentivesThePBPKschemeisthefirstlarge-scaleinitiativepilotingthedirectcashincentivesproposedinthePM-KUSUMguidelines.Initialstudiesbyresearchorganizationsfoundthatthecombinationofdaytimeelectricityprovisionandcashincentivesforunusedelectricityledtofarmersreducingtheirself-reportedirrigationhoursunderthePBPKscheme.However,moredataandimpactevaluationstudiesareneededbeforeanydefinitiveconclusionsaredrawn.ThePBPKschemeofferssomeuniquelearningsinaddressingimplementationchallenges(SeethePBPKcasestudyintheAppendixforfurtherreading).1.DBTschemeforagriculture:PBPK’sdesignisbasedononeofthreeDBTmodels,wherefarmersareallocatedaseasonallyadjustedpredeterminedamountofelectricitybasedontheirconnectedloadandarepaidamonetaryincentivedirectlyintotheirbankaccountsiftheyuselessthantheirallocatedconsumption.Initialtrialsshowedthatwithadequatecommunicationactivities,asizableshareoffarmerswasinterestedinenrollinginthescheme.2.Context-specificapproachtofixingquota:Althoughcalculatingtheelectricityquotabasedonafarmer’slandsizeholdingismoredesirable,PBPKusedtheprevailingelectricityuse-basedquotaforpracticalreasons.3.Water-savingtechniquesindemonstrationfarms:Popularizingwater-efficientpracticesiscriticaltoensuringsustainedreductioningroundwaterusage.Punjabcreateddemonstrationfarmsonschemefeederstohighlightthebenefitsofwater-savingtechniquesandresource-conservationtechnologies.4.Coordinationstructuresandincentivesforimplementingagencies:Asidefromwaterconservation,thePBPKdesignalsofocusedoncreatinginstitutionalstructuresthatpromoteeffectiveinteragencycoordinationandbetterimplementation.Theschemewasbasedonextensiveconsultationwithallstakeholders;therewashigh-levelpoliticalandadministrativecommitment;andtherewasaclearlydefinedmultilayeredadministrativestructureinplace(elaboratedinBox15).5.Measurestoincludetenantfarmers:Thestateintroducedamendmentstoitselectricitypoliciestoenablejointelectricityconnectionsinthenameoflegalheirsandenabledcashtransferdirectlytotenantfarmersaftertheenrolmentofthelandowner.LearningsfromthePunjabPBPKschememaynotapplytootherpartsofthecountrywithdifferentagroeconomiccontexts.Indeed,apilotstudyconductedinGujaratthattrialledelectricity-linkedincentivesforfarmersfoundahighenrolmentformeteringbutnoimpactonwaterconsumption.AgrivoltaicsAgrivoltaicsreferstothesimultaneoususeoflandforagricultureandphotovoltaicpowergeneration.ThisisachievedbydesigningasolarpowerplanttoenablecultivationbetweenorbelowthePVpanels.TherehavebeenonlyahandfulofpilotsonagrivoltaicsinIndia.Mainstreamingthemrequiresthedevelopmentofnewbusinessmodels,regulationsandstandards,promotionalmeasuresandcreatingevaluationframeworksforcontinuouslearning.IISD.orgSECTIONSUMMARY76Table14.KeylessonsfromagrivoltaicspilotprojectsinIndiaBusinessmodelsTherearethreebroadbusinessmodelsthatwehaveexploredinagrivoltaics:1.Partnershipbetweenfarmeranddeveloper2.Systemwhollyownedandoperatedbyoneentity3.Developerasaprimarypromoter,farmerasapartnerThesuitabilityofthemodelsvarieswiththeagroeconomicsituation—thefirsttwoaresuitablewherehigh-valuecropsarecultivated,andlandrentishigh;thethirdmodelissuitableforaridandsemi-aridregions.PromotionalmeasuresThestatecanfacilitatetheuptakeofagrivoltaicsthroughawarenessandfinancialincentives.Organizingstate-levelworkshopsfordevelopersandfarmerscouldgenerateawareness.Creatingamechanismtofundspecialprojectsbasedonproposalsfromstakeholderscanhelpinnovatenewmodels.EvaluationStatesshouldevaluatethefirstsetoffutureprojectsalongfivecriteria:i)techno-commercialevaluationtounderstandtheviabilityandtechnicalcharacteristicsofdifferenttechnologymodels,ii)effectivelandareaofagricultureandcropyield,whichcanformthebasisofstandardsinthefuture,iii)impactonwaterresources,iv)shadingcharacteristicsofdifferentmodelstocreateguidelinesforcropselection,andv)otheroperationalchallenges.FurtherguidanceandresourcesFishman,R.,Lall,U.,Modi,V.,&Parekh,N.(2016).CanelectricitypricingsaveIndia’sgroundwater?FieldevidencefromanovelpolicymechanisminGujarat.JournaloftheAssociationofEnvironmentalandResourceEconomists,3(4),819–855.https://doi.org/10.1086/688496Mitra,A.,Balasubramanya,S.,&Brouwer,R.(n.d.).Cancashincentivesmodifygroundwaterpumpingbehaviours?EvidencefromanexperimentinPunjab.AmericanJournalofAgriculturalEconomics,105(3),861–887.https://doi.org/10.1111/ajae.12340Pulipaka,S.,&Peparthy,M.(2021).AgrivoltaicsinIndia:Overviewofoperationalprojectsandrelevantpolicies.NationalSolarEnergyFederationofIndia.https://www.energyforum.in/fileadmin/user_upload/india/media_elements/Photos_And_Gallery/20201210_SmarterE_AgroPV/20201212_NSEFI_on_AgriPV_in_India__1_.pdfIISD.org77ImplementingSolarIrrigationSustainablyReferencesAggarwal,P.,Viswamohanan,A.,Narayanaswamy,D.,&Sharma,S.(2020).UnpackingIndia’selectricitysubsidies:Reporting,transparency,andefficacy.GlobalSubsidiesInitiative,InternationalInstituteforSustainableDevelopment,&CouncilonEnergy,EnvironmentandWater.https://www.iisd.org/system/files/2020-12/india-electricity-subsidies.pdfAsianDevelopmentBank.(2020).Maharashtraruralhighvoltagedistributionsystemprogram(India).https://www.adb.org/sites/default/files/linked-documents/50193-003-sd-12.pdfBali,N.,Vermani,S.,&Mishra,V.(2020).ElectricityaccessinIndia:Benchmarkingdistributionutilities.SmartPowerIndia-powered&TheRockefellerFoundation.https://smartpowerindia.org/wp-content/uploads/2021/07/WEB_SPI_Electrification_16.pdfBeattie,B.R.(1981).IrrigatedagricultureandtheGreatPlains:Problemsandpolicyalternatives.WesternJournalofAgriculturalEconomics,6(2),289–299.https://ageconsearch.umn.edu/record/32582/files/06020289.pdfBescommapsoutsummerplanforsmoothsupply.(2019,January23).TheHindu.https://www.thehindu.com/news/cities/bangalore/bescom-maps-out-summer-plan-for-smooth-supply/article26072148.eceBharadwaj,A.,&Tongia,R.(2003).Distributedpowergeneration:RuralIndia–Acasestudy.IEEE.https://www.cmu.edu/ceic/assets/docs/publications/working-papers/ceic-03-07.pdfBureauofEnergyEfficiency.(2019).Unlockingnationalenergyefficiencypotential(UNNATEE).Strategyplantowardsdevelopinganenergyefficientnation(2017–2031).https://beeindia.gov.in/sites/default/files/press_releases/UNNATEE%20Report.pdfCentralElectricityAuthority.(2022).Executivesummaryofpowersector:June-2022.MinistryofPower,GovernmentofIndia.CentralElectricityRegulatoryCommission.(2020).ExplanatorymemorandumondraftCentralElectricityRegulatoryCommission(termsandconditionsfortariffdeterminationfromrenewableenergysources)regulations,2020.https://cercind.gov.in/2020/draft_reg/DEM-RE-Tariff-Regulations2020.pdfCentralElectricityRegulatoryCommission.(2021).Calculationofaveragepowerpurchasecost(APPC)rateatthenationallevel(Petition:01/SM/2021).ChhattisgarhStateElectricityRegulatoryCommission.(2021).SuoMotuPetitionNo.29of2021.https://cserc.gov.in/upload/upload_news/13-09-2021_1631520437.pdfCenterforScience,Technology,andPolicy.(2019).DedicatedfeedersforIPsusingsolarbasedgeneration.https://kmea.karnataka.gov.in/storage/pdf-files/Reports%20and%20other%20docs/GoK_Dedicated_Feeders_Final.pdfCESLtoimplementdecentralisedsolarenergyprojectsinGoa:Ach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ffapprovedbyMERC,includingthestatesubsidy,constitutesabout50%oftheactualcostofsupply(MERC,2020a).Consequently,thestaterationspowerforagricultureconsumersandsuppliesintheoff-peakhours.MERCmandatesaminimumpowersupplytoagricultureconnectionsofeither8hoursduringthedayor10hoursatnight(MERC,2011).Accordingtostateofficials,inpractice,muchofthesupplyhappenedduringthenight,causingsafetyhazardssuchaselectrocutionandsnakebitesandotherdifficultiesforthefarmers.Daytimepowersupplyhasbeenalongstandingdemandfromfarmers.TheMaharashtraAgPumpElectricityPolicy2020haskeptatargetofproviding8hoursofreliabledaytimepowersupplytofarmerswithoutanyadditionalburdentothestateandfarmersasoneofitsprimaryobjectives(MaharashtraStateElectricityDistributionCompanyLimited[MSEDCL],2020).Maharashtra’sComprehensivePolicyforGrid-connectedPowerProjectsBasedonNewandRenewableEnergySources—2015targeted7,500MWsolarpowergenerationcapacityinthestateby2020(GovernmentofMaharashtra,2015).Thepolicytargetsfulfillmentoftherenewablepurchaseobligations(RPOs)throughthisplannedcapacity.Althoughthestatesawrapidgrowthinsolarpowercapacityadditioninthefollowingyears,itsgenerationconsistentlyfellshortofthetargettofulfillitsRPOobligations.ThecumulativeshortfallinRPObetween2016to2019isabout3,468millionunits(MERC,2020b).ThestatehaskeptanRPOtargetof25%by2025.Inthecontextofthesetwoobjectives,thestaterolledouttheMSKVYschemetopromotedecentralizedsolarpowerplantstosolarizeagriculturalfeeders.IISD.org83ImplementingSolarIrrigationSustainablyBox16.MSKVYschemedesignUndertheMSKVYscheme,thestateplanstodevelop2–10MWsolarpowerplantsforsolarizingagriculturefeeders.Thepowerplantsareinstalledonvacantgovernmentorprivatelandsandconnectedtothe11kVbusbarofthe33/11kVor22/11kVsubstationsunderMSEDCL.Thepowersupplytothetargetedagriculturefeedersisshiftedtodaytime,andthepowergeneratedfromsolarplantsprimarilycaterstotheagricultureload.Anydeficitorsurplusinsolarpowergenerationisdrawnorfedintothegrid.Intermsofobjectives,theschemeislikethePM-KUSUMComponentC(FLS),ensuringdaytimepowersupplytothefarmersandreducingthesubsidyburden.Thesolarplantstargetagriculturefeedersandcanbedevelopedonanytypeoflandandarenotlimitedtofarmer’sland.However,likeComponentA,thereisnodirectsubsidyfromthegovernmentinvolvedinthescheme,andsolarplantsaredevelopedpurelybasedontheircommercialviabilityfortheDISCOM.SchemeLaunchandProgressTheGovernmentofMaharashtracameoutwiththefirstMSKVYguidelinesin2017.Theinitialfocuswasondevelopingsolarpowerplantsongovernmentlands.AccordingtothestakeholderfromMAHAGENCO(Maharashtra'sstatepowergenerationutility),thelandidentificationprocesshadstartedmuchearlier.Theycollecteddistrict-specificdataonvacantgovernmentlandsandassessedthefeasibilityofsettinguppowerplants.Thestateapprovedtwosolarplantsof2MWeach—oneinRalegaonSiddhiandoneinKolambidistricts—aspilotsunderthepublic–privatepartnership(PPP)model.MAHAGENCOselectedprivatedevelopersbasedonreversetariffbiddingandenteredapowerpurchaseagreement.Atthesametime,MAHAGENCOsignedanmemorandumofunderstanding(MoU)withEESLtodevelop100MWsolarpowerplantsinthevacantlandswithindistributionsubstationsunderthescheme.TheexperiencefromthepilotprojectsandworkwiththeEESLinfluencedsubsequentimplementations.Over5years,theschemeunderwentmanychanges.Intheinitialphase,MAHAGENCOwasresponsiblefordevelopingtheidentifiedlandsandconstructingtheevacuationbayinfrastructure.ItwastobefinancedusingtheGreenCessFundinthestate.Asthestatefoundlimitationsindevelopingstate-ownedlands,itshiftedfocustosolarpowerplantsonprivatelands.Theschemefacedenormousimplementationchallengesfromthebeginning,primarilyduetopoorresponsestothetendersfromdevelopers(TableA1).Buttheschemestartedpickinguppaceinlate2019,althoughtheperformanceisstillmuchlowerthaninitiallyplanned.Subsequentsectionswilldescribetheimplementationchallengesandthemeasurestakenbythestatetoovercomethem.IISD.org84ImplementingSolarIrrigationSustainablyTableA1.DetailsoftenderspublishedundertheMSKVYschemeSr.No.DateofTenderCumulativecapacity(MW)inthetenderCapacity(MW)forwhichbidswerereceivedCapacity(MW)forwhichPPAsweresigned1Apr27,201811,0002352352Sept15,201811,40018003Jan7,201911,4001170104Sept20,201911,350555Dec31201921,3502832836Apr22,202131,3001111117Oct28,202141,250385.3385.38Jan31,20225865535535CumulativecapacityofPPAs(MW)signedundertheschemebyMSEDCL1,564.3Source:1.MERC,2020d;2.MERC,2020b;3.MERC,2021;4.MERC,2022a;5.MERC,2022b.CostsandBenefitsOneofthescheme’sobjectiveswastoreducethepowerpurchasecostforDISCOM.AlthoughtheDISCOMhasnotconductedanycomprehensivepost-implementationassessment,theutilitiesusedthefollowingjustificationfortheschemeintheirtariffpetition:•Theaveragetariffdiscoveredunderthescheme—betweenINR3.00toINR3.30perunit—islowerthantheaveragepowerpurchasecost,whichisaboutINR6perunit.•Evenifthestateboughtpowerfromautility-scalepowerplantwhosetariffrangedbetweenINR2.4toINR2.8(atthetimeoffilingthepetitions),thelandedcostwouldbeinthesamerangeiftheyconsideredthefollowinglosses:°Statetransmissionutilityloss°33kVwheelinglosses•Reducedtransmissioninfrastructureusageandavoidedtransmissionupgradecostsaresomeadditionalbenefitsofthescheme.Supplyingpowerduringthedaytimeisintendedtobenefitfarmers.Otheradditionalbenefitsenvisagedincludedimprovedqualityandreliabilityofthepowersupply.Theactualschemeoutcomeshavenotyetbeenevaluated.IISD.org85ImplementingSolarIrrigationSustainablyA1.2FinancingSinceitsinception,thestatehasexperimentedwiththreepowerprocurementmodelsinvolvingMSEDCLandMAHAGENCO.Themultiplebusinessmodelsarearesultofthestate’sefforttoovercomecertainchallenges.Thethreebroadmodelsareasfollows:1.PPPmodewithMAHAGENCO:MAHAGENCOaggregatesvacantgovernmentlandsandleasedprivatelandsandtransfersthemtoprivatedevelopersidentifiedthroughreversetariffbidding.MAHAGENCOentersintoaPPAwiththesuccessfulbidders.Simultaneously,itentersintoapowersaleagreementwithMSEDCL,chargingitscommissionofINR0.05perunitoverandabovethediscoveredtariff.Mostoftheinitialinstallationswereplannedunderthismodel.However,itsoonranintotrouble:a.MERCmandatedMAHAGENCOtoprocureanintra-statetradinglicencesinceitactedasanintermediaryinthescheme.b.Further,althoughMERCapprovedINR0.05perunitcommissionmarginforMAHAGENCO,thefinaltariffwasmuchhigherthanthetariffdiscoveredunderothermodels.Intheend,MAHAGENCOchosenottolevyanycommission.2.MoUbetweenMAHAGENCOandEESL:MAHAGENCOsignsMoUswithEESLtopurchasepoweronamutuallyagreeabletariff.ItalsoexecutesapowersaleagreementwiththeDISCOM.ThismodelwasadoptedwhentheinitialtendersunderthePPPmodedidnotelicitanyresponsesfromprivatedevelopers.EESLproposedacompetitivetarifffora200MWsolarpowerplantongovernmentlands,whichwasincreasedto500MWlater.However,MERChassuggestedthattheMoUroutegoesagainstthespiritofcompetitivebiddingandshouldnotbepreferred(MERC,2020c).3.Renewableenergyservicecompany(RESCO)modelwithMSEDCL:MSEDCLdirectlysignsPPAswithprivatedevelopersbasedonreversetariffbidding.MostPPAssignedsofararethroughthisroute,andtheDISCOMhasbigplansforthecomingyears.Despitethesequickpolicyresponses,theschemeimplementationfacedmanyteethingtroubles.Themainchallengewasthepoorresponsetotendersfromthedevelopers.Butthestatehasbeenconsistentinovercomingthesechallengesthroughpolicymeasures.Themainconcernsidentifiedduringthestudyandthestate’spolicyresponsesareoutlinedbelow:ViabilityofTariffManydevelopersfoundthattheproposedceilingtariffforMSKVYwasnotproportionaltotherisksandcostsinvolvedinsettingupdecentralizedpowerplants.Thestateadoptedthefollowinguniquemethodtoarriveattheceilingtariff.1.Tarifffromautility-scalesolarparkistakenasthebaseprice.2.Ontopofit,thefollowingcostswereaddeda.Centraltransmissionutilitychargesandlossesb.Statetransmissionutilitychargesandlossesc.Wheelinglossesinthe33kVlinesIISD.org86ImplementingSolarIrrigationSustainablyThus,thelogicofthetariffdesignwastopegthetarifftothelandedcostofautility-scalepowerplant.Thismethodisverydifferentfromthelevelizedcostcalculationmethodfollowedbytheotherstates.However,thefinaltariffstillfellshortofexpectationsformanydevelopers.Afterrepeatedtenderselicitingpoorresponses,MERCsuggestedthatthetariffcouldbethemainreasonandinstructedMSEDCLtoadoptamarket-responsivetariff.Throughthecourseofthescheme,theceilingtariffincreasedfromINR3.10perunittoINR3.30perunit,andrecenttendershavestartedelicitingabetterresponse.GridAvailabilityTheavailabilityofthegridatthe11kVlevelwasanotherprimaryconcern.Accordingtostakeholders,althoughMaharashtra’sruralpowersupplysituationisbetterthaninmanyotherstates,itisstillnotuptothemark.Load-sheddingandtransformerbreakdownarequitecommonatthe11-kVlevel.AstudyofoneofthepilotprojectsatKolambishowedthattheaveragegridavailabilityinthefirst7monthsofthepowerplantoperationwaslessthan73%(Padoleetal.,2022).However,thispilotconnectedthepowerplantdirectlytotheAgFeederratherthanthe11kVbusbaratthesubstation.Thesituationwasabysmalinthefirst2monthswhenavailabilitywasbelow50%,mainlyduetothehighload-sheddingrate.Assumingthatload-sheddingwillnotaffectapowerplantdirectlyconnectedtothesubstation,thereisstillonlyabout91.5%gridavailability—theremainingislostduetobreakdowns.Incomparison,asolarpowerplantconnectedattheextrahighvoltagelevel(voltagelevelsexceeding33kV,whichisthetypicalinjectionpointforasolarpowerplant)enjoysmorethan99%gridavailability.Thestateintroducedtwocriticalmeasurestoaddresstheseissues:1.Introductionofdeemedgenerationclause:Thestateguaranteesaminimumof98%gridavailability.Incaseofashortfall,thedeveloperscanclaimcompensationat75%ofthePPAtariffforlostgenerationunits.Asperseveralstakeholders,thishasbeenasignificantstepinimprovinginvestors’confidence.2.Upgradingofthedistributioninfrastructure:Thestateundertookcriticalinfrastructureupgradesatthedistributionlevel.Stateofficialsrealizedtheimportanceofsuchactivitiesonlyoncetheinstallationsstartedcomingonline.Accordingtodevelopers,learningfromtheinitialexperience,theyconstantlyliaisedwiththeDISCOMfieldofficers.Theytookpre-emptivestepsforgridmaintenance,includingcuttingtreebranchesalongthefeederstoavoidshortcircuits.Stateofficialssuggestthatitiscriticalforaschemefordecentralizedpowerplantstoconsiderthedistributionsectorholistically.Land-RelatedChallengesAccordingtothestakeholders,anothersignificantroadblockwasthatdevelopersstruggledwiththelogisticsofidentifyinglandparcelsforthepowerplant.Landaggregationchallengeswereonemainreasonforlargeinvestorstoavoidthescheme.Thestateinstituteda“landbank”schemetoovercomethischallenge—thestatenotifiedaseparatemechanismwhereinterestedprivateparties,includingfarmers,couldregistertheirlandforleasingtodevelopers.TheDISCOMofficialssurveyed,verified,andassessedthefeasibilityoftheregisteredlands,thuscreatingareadyinventoryoflandssuitableforthesolarplants.Accordingtostakeholders,theinitiativehasbeenhighlysuccessful,andinthelatesttenders,thelandsregisteredthroughlandbankswerethebasisformostbids.IISD.org87ImplementingSolarIrrigationSustainablyPayment-RelatedChallengesMaharashtraisamongthebetter-performingstatesregardingthetimelypaymentofduestosolardevelopers.However,stakeholdersbelieveadelayof2to3monthsisstillcommoninthestate.Andthiswasamainconcernforthedevelopers.Largeinvestorscanmanagecashflowconstraintsforafewmonths.Thestatealsoprovidestheletterofcredit(LC)guarantee,whichensurespaymentwithinafewmonths.However,thatisnotenoughforsmallinvestors.IntheMSKVYscheme,mostparticipantsweresmallenterprisesinvestinginoneortwosolarplants.Evenamonthofpaymentdelaymaycauseserioustroubleforsuchenterprises.Thestate’sprimarymeasuretocounterthiswasbydevelopingtrust.Accordingtothedeveloperswhocommissionedpowerplants,thestateensuredtimelypaymentfortheinvestors.Thestatedependsonword-of-mouthpublicitytoallaytheconcernsofpotentialdevelopers.A1.3ImplementationDesignandCoordinationIntheinitialschemedesign,thestateenvisagedrolesformultipleorganizations,withMAHGENCOastheprimaryimplementingagency.However,astheschemeevolved,andtheRESCOmodelbecamethefavouredoption,thestatedesignatedMSEDCLasanimplementingagency.Sincethen,MSEDCLhasbeenthemaindriverofthescheme.RolesoftheThreeAgenciesMSEDCLAstheprimaryimplementingagency,MSEDCLidentifiestargetsubstationsanddecidesthecorrespondingcapacityofthesolarpowerplants.Itdoestheduediligenceforthetenderandcommissioning.TwonotablestepsbyMSEDCLhavesignificantlyhelpedintheadvancementofthescheme:•Creationoflandbanks:Thepreparationofalistofprivatelyownedlandparcelsthatareinvestmentreadyisasignificantachievementforthestateandisexpectedtoboostthescheme'simplementation.MSEDCLaggregatedthelandinformationandverifiedeachlandparcelforthefeasibilityofsolarpowerplantinstallation,thussignificantlyreducingthelogisticscostsfordevelopers.TheDISCOMalsogavewidepublicitytothelandbankinitiative—thelandbankportalwaslaunchedbythechiefminister—givingitwidecoverageandagoodresponsefromthepublic.•Opentender:OnemainimplementationconstraintMSEDCLidentifiedwasthatthetendercyclewastoolong,andmanysuccessfulbidswerenotconvertingtoPPAs.Smallinvestors,whoformthebulkoftheparticipantsinthescheme,werefindingitdifficulttosticktothetimelinebecauseiftheyfailedormissedonetender,theyhadtowaituntilthecyclewascompletedforthenextopportunity.Toalleviatethis,MSEDCLoptedforopentender,wherethesubstation-specificcapacityisupdatedandpublishedeverymonth,andthebiddingtakesplaceattheendofeverymonth.Thisgivesacontinuousstreamofopportunitiesforinvestors.Asignificantdrawbackofthissetup,alsonotedbyMERC,isthatitunderminesthecompetitivespiritofbidding.Firmswillonlybidatceilingtariffasthereisenoughchanceeveniftheyloseonetender.MSEDCLacknowledgedthisbutargueditisaIISD.org88ImplementingSolarIrrigationSustainablynecessarycompromise,astheprevioustendersdidnotelicittheexpectedcompetitivespirit.Theyjustifiedthatpowerpurchaseattheceilingtariffisstillcomparabletothelandedcostofpowerfromasolarpark.MAHAGENCOMAHGENCO’sprimaryrolewastodevelopvacantgovernmentandsubstationlandsforthesolarplantdevelopers.AccordingtotherepresentativefromMAHGENCO,theirworkinthismatterpredatedMSKVY.Theycollecteddataonvacantlandswithdifferentgovernmentdepartmentsbyliaisingwithdistrictcollectors.Theirfieldstaffverifiedandassessedtheselandsfortheviabilityofsolarpowerplants.Thisexercisegaveanexcellentjumpstarttothescheme,withmostoftheinitialinstallationscomingthroughMAHGENCO.MAHGENCOalsonegotiatedwithestablisheddeveloperstobringdownthecostofpower.TheysignedaPPAforINR3perkWhwiththeEESLwhentheprevailingtariffforlarge-scalepowerplantswasinthesamerange.Intheinitialdesign,theprimaryroleenvisagedforMAHGENCOwasthatofanintermediarybetweendevelopersandtheDISCOM(PPPmodelwithMAHGENCO).However,whentheycouldnotoffercompetitivepricesunderthePPProute,theyhadtocuttheircommissionmargins,whichupendedthebusinessmodel.WiththefocusshiftingtotheRESCOmodelwithMSEDCL,MSPGCL’sroleintheschemeimplementationbecameverylimited.MEDAAsthenodalagencyforREinthestate,MEDAhasspecificstatutoryrolesliketheregistrationofdevelopers.Especiallywhenthebulkofdevelopersaresmallinvestorsandventuringintothesolarpowergenerationbusinessforthefirsttime,MEDA’srolebecomesvitalintheimplementation.Inaddition,forsomeoftheprojectsimplementedbyMAHGENCO,theconstructionoftheevacuationandmeteringinfrastructure,whichwereMAHGENCO’sresponsibility,wasfinancedthroughtheGreenCessFundmanagedbyMEDA.PoliticalBackingfortheSchemeOnecriticalfactorthatmakesMaharashtrastandoutamongotherstatesinimplementingfeedersolarizationisthepoliticalsupportfortheprogram.Theschemeisnamedafterthechiefminister,showingitsflagshipstatus,anditwaslaunchedwithmuchpublicityandfanfare.Theschemeenjoysbroadpoliticalsupport—evenafterachangeinthepartyinpower,theschemecontinuestoenjoystrongpoliticalsupport.Thegovernmenthasalsobeenveryresponsiveinpolicy-makingtoovercomeimplementationchallenges.WhentheDISCOMidentifiedlandprocurementissuesasthemainroadblocktotheschemeimplementation,thestatecameoutwiththelandbankinitiativelaunchedbythechiefminister,givingithighvisibility.BalancingWEFNexusObjectivesTwocriticalaspectsofbalancingwater–energy–food(WEF)nexusobjectivesforfeedersolarizationaretargetingandsupportingthesustainabledevelopmentofgroundwater(ref.mainguidebook).IISD.org89ImplementingSolarIrrigationSustainably1.TargetingoftheSchemeThescheme’sobjectiveistoeventuallysolarizeallagriculturefeedersinthestate.ThestatedidnotuseanyWEFconsiderationstolimittheschemetoparticularfeeders.Inthefeederselectionforthecurrentphase,thestate’smaincriteriaaretheintensityofagriculturemeasuredthroughtheagriculturalloadinsubstationsandtheavailabilityofgovernmentlands.ThisapproachhashelpedtoextendtheschemeinallregionsexcepttheKonkanregion,wherethegeographicalsettingisunfavourablefortheschemeduetohillyterrainanddenseforest.ThereisacomparativelyhigherconcentrationinPune,Nashik,andMarathwadaregions(PrayasEnergyGroup,2021).InparalleltotheMSKVYscheme,thestatealsohashugeambitionsforthePM-KUSUMComponentBtocatertofarmerswithoutelectricityconnections.Maharashtrahasdemandedthehighestallocationamongallstates—1-lakhpumpsunderComponentB.Thestateaimstoensureequitableaccesstoirrigationthroughthistwo-prongedapproach.2.ManagingtheImpactonGroundwaterGroundwaterconcernshavenotinfluencedthescheme'sdesign.Thestakeholders’viewsvariedregardingitspotentialimpactandrelevanceinschemedesign.Somestakeholderssuggestedthatsincetheoverallhoursofpowersupplyarenowlessthantheearliernighttimesupply,theschemeislikelytoimprovethegroundwatersituationinthestate.Further,withanuninterruptedguaranteeddaytimepowersupply,farmersaremorelikelytoactresponsiblyintheirwateruseandlesslikelytouseanauto-onswitch,whichcausesalotofwaterwastage.Butsomeotherstakeholdersacknowledgedthattherecouldbenegativeimpactsonthegroundwater.Sincethefarmersnowgetwaterthroughoutthedaywithoutanyincentivetoconserveitsusage,itmayleadtothegrowingofmorewater-intensivecrops.However,expertssuggestedsuchimpactsonthegroundwateraredetectableonlyinthelongtermandneedafewmoreyearsofimplementationtobestudiedproperly.Accordingtothem,anyconsiderationofgroundwaterintheschemedesignstagewillbepurelyspeculative.InterdepartmentalCoordinationAccordingtothestakeholdersinterviewed,otherdepartmentsliketheagriculturedepartmentandgroundwateragenciesdonotplayaroleinimplementingthescheme.Therevenuedepartment’sroleisinthediversionoflanduse.However,intheStateRenewableEnergyPolicy2015,thestatehadconferred“deemeddiversion”statustosolarprojects,meaningthattherevenuestatusoflandneednotbechangedifagriculturallandisusedforsolarpowerplantinstallation.Buttheyacknowledgedthataconsultativemechanismwithagricultureandgroundwaterdepartmentswouldhavehelpedthemassessthescheme'simpactonaspectslikefarmers’income,cropchoices,andgroundwatersustainability.A1.4KeyLearningsforPM-KUSUMMaharashtra'schallengesinimplementingtheMSKVYschemeandhowitovercamesomeofthosechallengescanbeinstructiveforotherstatesintheimplementationofthePM-KUSUMscheme.Herearethethreemaintakeaways:IISD.org90ImplementingSolarIrrigationSustainably1.BothMSEDCLandMERChavebeenquicktomakepolicyamendmentsandcorrections,includingrefiningthetariffaftereachtender.Thishelpedovercomethelackofinterestamongdevelopersintheearlystages.2.Processinnovationslikethelandbankinitiative,thelogicusedforsettingthetariff,opentender,anddeemedgenerationclauseswereinstrumentalingettingtheschemeoffthegroundandcanbereplicatedinotherstates.3.Politicalbackingiskeyinaddressingimplementationchallengesandensuringinterdepartmentalcoordination.A2CaseStudy2:PaaniBachaoPaisaKamaoscheme,PunjabThestategovernmentofPunjab,inconsultationwiththeWorldBankandtheAbdulLatifJameelPovertyActionLab–SouthAsia(J-PALSA),implementedaninnovativepilotschemein2018totestsolutionstothechallengeofover-withdrawalofgroundwaterintheagriculturesector.ThePaaniBachaoPaisaKamao(savewater,earnmoney)(PBPK)schemeprovidedadirectincentivetoparticipatingfarmerstoconserveelectricitywithinastipulatedlimit,indirectlycurtailinggroundwaterdepletion.Theschemeusedadirectbenefittransferofelectricity(DBTE)mechanismandaimedtotackletheinterlinkedchallengesoffallinggroundwatertablesandgrowingfinancialdebtofelectricityutilities.Thisbehaviouralchangeschemewasimplementedintwophasesandcomplementedwithseveralmeasurestopromotewater-useefficiencypractices,suchaspilotingwater-savingtechniquesatdemonstrationfarms(GovernmentofPunjab,2019).Astudyhasfoundpositiveevidenceofthescheme’simpactonself-reportedirrigationhoursandfeeder-levelelectricityconsumption,butfurtherimpactevaluationstudiesarerequired(Mitraetal.,2022).A2.1ContextAccordingtosurveysconductedbythestate’sagriculturedepartment,around85%ofwaterblocksinPunjabweredesignatedasoverexploitedorcritical(MGSIPA,n.d.).GroundwaterdepletionisnotlimitedtoPunjab,with60%ofallblocksinIndiaexpectedtoreachacriticalconditionby2025ifcurrentdepletionratespersist(Pahuja,2010).Thisismainlydrivenbyagriculturalconsumptionsincethesectoraccountsfor80%oftotalfreshwaterwithdrawalsinthecountry(WorldBank,2020).AstudybytheMGSIPA,Punjab,suggestedthatgroundwaterdepletionlinkedtoagriculturalelectricitysupplynotonlyaddedtoPunjab’sfinancialwoesbutalsoincreasedtheburdenonfarmers,withanestimatedINR11,000(~USD133)perannumbeingspentbyindividualfarmersfortheexpansionoftubewellstoaccessdeepergroundwatertables(MGSIPA,n.d.).Theprovisionofsubsidizedelectricitysupplyalsohasanadverseimpactonthefinancesofthelocalelectricityutility,PunjabStatePowerCorporationLimited(PSPCL)andthestategovernment,whichincurredanannualsubsidyburdenofINR9,675crores(USD1.2billion)inFY2020(Aggarwaletal.,2020).Ofthissubsidyburden,over60%isdrivenbyIISD.org91ImplementingSolarIrrigationSustainablyagriculturalelectricityconsumption(Aggarwaletal.,2020).Again,thisisnotonlyrestrictedtoPunjab,withaCEEW-IISDstudyestimatingthattotaldirectelectricitysubsidiesfromstategovernmentsacrossIndiaamountedtoINR110,391crore(USD15billion).AnadditionalINR75,027crore(USD10.2billion)wasincurredascross-subsidiesthroughhighertariffsimposedonindustrialandcommercialconsumers(Aggarwaletal.,2020).Subsidizedelectricityalsoimpactsfarmers,withaWorldBankstudyfindingthatthepoorqualityofunmeteredpowersupplyandinequitabledistributionofsubsidiesharmedsmallandmarginalfarmersthemost(WorldBank,2001).LinkagesWiththePM-KUSUMSchemeThePBPKpilotschemehaslinkageswiththePM-KUSUMscheme,whereundercomponentC(FLS),statesaregivenanoptionofprovidingdirectincentivestofarmerstolimittheirconsumptionofenergyfollowingthesolarizationofagriculturalfeeders(PIB,2020).SubsequentrevisionshavemadeitclearthatmeteringisnotmandatoryunderthePM-KUSUMschemebutoptionalforstatestoconsider.However,thePBPKexperiencedemonstratesthatprovidingincentiveslinkedtoelectricityconsumptioncanencouragefarmerstooptforindividualmetering,eveninstateswheremeteringischallengingfromapoliticaleconomyperspective(Gulati,2021).DISCOMofficialsinPunjabconfirmedthatpriortoPBPK’simplementation,meteringhadonlybeenundertakenatthefeederlevelratherthanatanindividualfarmlevel,whichchangedfollowingthescheme’srollout.A2.2OverviewofthePBPKSchemeThePBPKschemewasentirelyvoluntaryandusedaDBTmodeltoincentivizefarmerstouseelectricityandwaterjudiciously.PBPK’sdesignisbasedononeofthreeDBTmodels,wherefarmersdonotreceiveanupfrontcashincentive.Theyareinsteadallocatedaseasonallyadjustedpredeterminedamountofelectricityunitsbasedonthecapacity(HP)oftheirconnectedload.Theyarepaidamonetaryincentivedirectlyintheirbankaccountsiftheyuselessthantheirallocatedconsumption(AsianDevelopmentBank,2020).Theelectricityconsumptionofenrolledfarmersismonitoredusingsmartmeters.ThePBPKschemewasinitiallyimplementedin2018onapilotbasisinsixagriculturefeeders,coveringatotalof942farmers(MGSIPA,n.d.).DISCOMofficialshighlightedthattheselectionoffeederswasundertakenmainlybasedonanassessmentofareaswheretherewaslikelytobelimitedresistancefromfarmers.Despiteinitialenrolmentchallenges(highlightedinthenextsection),theschemewaswell-received,with276farmersenrollinginthefirstyear(MGSIPA,n.d.).Thisconstituted29%ofthe942farmerstargetedforenrolmentunderthescheme.ThetimelypaymentofsubsidiesbyPSPCLandintenseoutreachcampaignsconductedbyseveralorganizationsinvolvedinimplementationwasconsideredakeyfactorinencouragingmorefarmerstoparticipateinthePBPKpilot(MGSIPA,n.d.).Followingitsinitialenrolmentsuccess,theschemewasscaledupinJune2019to256agriculturefeedersandtargetedroughly52,000farmersinthestate.InterviewswithDISCOMofficialssuggestthattheselectionoffeedersinthesecondphasewasinsteadbasedonanassessmentofregionswithrapidlyfallinggroundwatertables.ByMarch2020,anadditional2,000additionalfarmershadenrolledintheschemeinthesecondphasebeforetheIISD.org92ImplementingSolarIrrigationSustainablyCovid-19-inducedlockdowntemporarilyhaltedenrolments(MGSIPA,n.d.).Thisdisruptionwascloselyfollowedbystrongprotestsfromfarmerunionsagainstnewlawspassedbythegovernmentthataimedtoreformtheagriculturesector.Thesedevelopmentsaffectedthescheme’simplementation,andonly2,200farmers(4%ofthetargeted51,280farmers)enrolledinPhase2beforetheschemewasputonholdduetothepandemic(MGSIPA,n.d.).TableA2.EnrolmentintwophasesofthePBPKschemeNumberoffeedersEnrolledfarmersTargetEnrolled%PBPKPilotPhase1630994233%PBPKPilotPhase22502,20051,2804%Total2562,50952,1504%Source:MGSIPA,n.d.andauthors’analysis.Interviewedexpertscitedfindingsfromasurveyconductedduringthescheme’simplementationtosuggestthatahighernumberoffarmerswerekeentoenrolintheschemebutfacedredtapeandbureaucratichurdlesinparticipationastheirelectricityconnectionswereunderadifferentname.ThishighlightstheuncertaintyofdrawingconclusionsonthePBPK’senrolmentoutcomesintheabsenceofamoredetailedstudyofthescheme.CoordinationMechanisminthePBPKSchemeThePBPKpilotschemewasmainlyimplementedbythePSPCL,thestateelectricityutility.Asidefromtheutility,thestategovernmentofPunjabcreatedamultilayeredinstitutionalstructureforimplementingthePBPKschemewithmechanismsforinteragencycoordinationaswellasverticalcoordinationbetweenseniorbureaucratsandfield-levelofficials.Theregularoversightofthechiefministerprovidedstrongpoliticalbackingandempoweredofficialstomakedecisions(MGSIPA,n.d.).Thescheme’simplementationreliedontheinputsofmultipledepartmentsaswellasrepresentativesofagriculturaluniversitiesandfarmers’commissions.However,officialsfromthestateelectricityutilityhighlightedthatdespiteinitialsupportfromotherdepartments,theirsupporteventuallyweanedoffduetocompetingprioritiesduringtheCovid-19pandemicandthefarmers'protests,highlightingthedifficultyinmaintainingcontinuousengagementwithdifferentdepartmentsduringthescale-upofanyscheme.Athree-tieredmonitoringandimplementingstructureweresetupforthescheme’simplementation,including:1.AState-LevelSteeringCommittee:Chairedbythechiefsecretarywiththesecretaryofpowerastheconvenor.Thecommitteeincludedthefollowingmembers:Secretariesfromtheagriculture,planningandfinance,andwaterresourcesdepartments,thechairmanandMDofPSPCL(theDISCOM),thevice-chancellorofPunjabAgricultureUniversity,andthechairmanoftheFarmersCommission.Theprimaryroleofthiscommitteeistomonitorthescheme’sprogressandmakepolicy-leveldecisions.IISD.org93ImplementingSolarIrrigationSustainably2.District-LevelImplementingCommittee:ThiscommitteewaschairedbythedeputycommissionerofthedistrictwiththesuperintendingengineerofPSPCLastheconvenor.Thedistrictheadsofagricultureandsoilconservationaremembersofthiscommittee.Itfocusedonschemeimplementationandsharingfeedbackwiththestate-levelcommitteeonissuesfacedbyfarmers.3.Field-LevelImplementationCommittee:Thiscommitteeischairedbythesub-divisionalofficerwiththeexecutiveengineerofPSPCLasitsconvenor.Theassistantdivisionalofficer(agriculture),sub-divisionalofficer(waterresources)andheadsofKrishiVigyanKendras(KVKs)areitsmembers.A2.3OutcomesAstudycarriedoutbytheInternationalWaterManagementInstitute(IWMI)foundthatthecombinationofdaytimeelectricityprovisionandcashincentivesforunusedelectricityhasthepotentialtoincentivizefarmerstoreduceelectricityconsumptionandself-reportedirrigationhoursbyatleast7.5%andupto30%withoutimpactingpaddyyields(Mitraetal.,2022).Thestudyalsofoundareductioninelectricityconsumptionatthetreatmentfeederscomparedtothecontrolfeeders.However,therewasnosignificanteffectonpumpinghoursfromtheuninterrupteddaytimeelectricitysupplyalone,suggestingthatashiftinelectricityandgroundwaterpumpingbehaviourwilldependontheentitlementandcashincentiveofferedundertheschemecombinedwiththedaytimesupply.However,interviewedstateofficialsandexpertscautionedthatmoredataisrequiredfromalargersamplesizebeforeanydefinitiveconclusionsaredrawnregardingthescheme’simpactonelectricityandwaterconsumption.Consultationswithexpertsrevealedthatcropdiversificationwasnotapriorityobjective,givenfarmers'assuredincomefrompaddyandwheatcultivation.A2.4FinancingoftheSchemeInthefirstphaseofthescheme,nobudgethadbeenallocatedbythestategovernmenttoPSPCLforprovidingtimelysubsidypaymentsandmeteringcosts,whichaffectedthetimelypaymentsofsubsidiestobeneficiaries,giventhefinancialdifficultiesfacedbyPSPCL.ThiswasaddressedinthesecondphaseofthePBPKscheme,whereanallocationofINR40crorewasprovidedinthestate’sagriculturesubsidybudgetforthePBPKscheme,ofwhichINR5crorewasreimbursedtoPSPCLforschemeimplementation.Interviewswithutilityofficialsrevealedthatthemajorityofthatamounthadalreadybeenspent(INR4.7crore),highlightingtheneedforadditionalbudgetaryallocation.AnIWMIstudyestimatedthatthestatecouldtheoreticallymakesubsidysavingsthroughthescheme(Mitraetal.,2022).Theircalculationswerebasedonthefollowingassumptions:PunjabprovidedanincentiveofINR4perunitofelectricityunderPBPK,whereastheelectricitytariffinthestatewasINR5.66perunit.ThestatewouldhavesavedINR1.66perunitfromtheagriculturalsubsidybill.Withatotalelectricityconsumptionofalmost12billionunitsinagricultureintheFY2021–2022,a10%reductioninelectricityconsumptionwouldtranslateintoareductionofUSD26millioningovernmentsubsidies(Mitraetal.,2022).However,furtherdataisrequiredtoconfirmthishypothesis,particularlytakingintoaccounttheupfrontcapitalandoperationalcostofimplementingthescheme.IISD.org94ImplementingSolarIrrigationSustainablyA2.5ChallengesandSolutionsFarmerEnrolmentDuetoLackofTrustTheschemefacedinitialresistancefromfarmerunions,particularlyoverapprehensionssurroundingthemeteringofagriculturalelectricitysupply(MGSIPA,n.d.).Althoughtheschemeclearlyexcludedadisincentiveforoverconsumptionbeyondthestipulatedlimit,consultationswithgovernmentofficialsrevealedthatthedeep-rootedresistancetometeringgivenitsperceivedlinkageswithbilling—aswellasfarmers’lackoftrustwithDISCOMsinreceivingpayments—werethemainreasonsthatmanyfarmerswereinitiallyreluctanttojointhescheme.Thisdeep-seatedoppositiontometeringbyfarmersisnotlimitedtoPunjab,andanMGSIPAstudyhighlightedthatinotherstates—Karnataka,TamilNadu,andTelangana—meteringandbillinghadbeenvehementlyopposedbyfarmerunionsandrepresentatives(MGSIPA,n.d.).Thechallengewasaddressedinthescheme’simplementationthroughoutreachandfarmerengagementcampaigns.Thefollowingstepsweretakentoboostenrolment:1.PSPCLandtheAgricultureDepartmentconducteddoor-to-doorcampaigns.Theinvolvementoftheagriculturedepartmentplayedakeyroleinbuildingtrustwithindividualfarmers(MGSIPA,n.d.).2.Thelocaldistrictadministration,PSPCL,andagriculturedepartmentofficialsorganizedlarge-scaleawarenesscampsandmeetings.3.TheWorldBankandJ-PALSAteamsdesignedleafletsinlocallanguagesanddistributedthemintargetvillages.4.LocalNGOsdealingwithenvironmentalissuesandcivilsocietyorganizationswerealsoinvolvedinhelpingbuildawarenessoftheenvironmentalimpactofexcessivegroundwaterextraction.5.Inthefirstyear,thetimelypaymentofsubsidiesbyPSPCLhelpedbolsterenrolmentasthescheme’sbenefitswerecommunicatedthroughwordofmouthamongfarmers.AllofthesefactorsplayedanimportantroleinbolsteringenrolmentinthefirstphaseofthePBPKscheme.MonitoringandEnrolmentChallengesAstudyfoundthatthereweresomecaseswherefarmerswithmultipletubewellconnectionsenrolledoneoftheirtubewellsintheschemeandutilizedtheothertubewellforirrigation,whichenabledthemtoearnahigherincentivewithouttheaccompanyingreductioningroundwaterextraction(MGSIPA,n.d.).Thischallengewasovercomethroughamodificationissuedbythestategovernment,whichmandatedtheenrolmentofalltubewellsownedbyfarmers(withinthetargetedPBPKfeeders)forparticipationinthescheme(MGSIPA,n.d.).Furthermore,therewereotherbureaucraticchallengesfacedinschemeimplementationsinceonlyfarmerswhosenameswereregisteredunderanelectricityconnectioncouldinitiallyaccessincentivesunderthescheme(AsianDevelopmentBank,2020).ThismadeitchallengingfortenantfarmersandlegalheirsofdeceasedfarmerstoparticipateintheschemeIISD.org95ImplementingSolarIrrigationSustainablyinitially.Althoughthetransferoflandtitleswasrelativelystraightforward,thetransferofanelectricityconnectionwasdifficult,giventherestrictionsovernewagriculturalelectricityconnectionsinthestate.Expertconsultationsrevealedthatthestateovercamethischallengebyissuinganamendmenttoenableelectricityconnectionstobeheldjointlyinthenameoflegalheirs.Similarly,tenantfarmerswerereluctanttoparticipatebecauselandownerswithregisteredelectricityconnectionswouldreceivetheincentiveundertheschemeratherthancultivatorswhoworkedinthefield.Thescheme’sdesignwasmodifiedtoenablethetransferoftheincentivetothetenantfarmer(AsianDevelopmentBank,2020).Astudyalsohighlightedthepotentialchallengeofpowertheftthroughthebypassingofelectricitymeters(MGSIPA,n.d.).AlthoughthiswasnotobservedduringthetwophasesofthePBPKscheme,itwashighlightedasapossibility,underscoringtheneedforregularmonitoringbyutilityofficialsinotherstates.Theuseofsmartmeterscouldhelpaddressthischallengebyhelpingtheutilitymonitorpowersupply,tubewellusagehours,andremotelymonitorload.Althoughsmartmetersweren’tusedinthefirstphaseofthescheme,severalelectronicmeterswerereplacedwithsmartmetersinlate2021(MGSIPA,n.d.).CapacityBuildingoftheDISCOMTheimplementationofthePBPKschemereliedonseveralinitiativestobeundertakenbyPSPCL,includingfeederseparation,gridupgradingtoensuredaytimepowersupplytofarmers,outreachandawarenesscampaigns,monitoringandvigilancetopreventfarmersusingmultiplepumpsorbypassingmeters,thepurchaseanduseofinnovativeITtools,andtimelypaymentsofwaterincentivestofarmers.GivenPSPCL’sfinancialsituation,dedicatedbudgetaryfundingfromthestateandthesupportofexternalknowledgepartners,suchastheWorldBank,J-PALSA,andTheEnergyandResourcesInstitute,wereessentialforimplementingthescheme.InterviewswithDISCOMofficialsalsohighlightedtheproblemofalackofdedicatedhumanresourcesforthescheme’simplementation,whichsignificantlyburdenedtheelectricityutility.Giventhephasedownintheinvolvementofotherdepartmentsafterafewyearsofthescheme,theDISCOMfacedahumanresourcesconstraintinimplementingPBPK.Astudyalsohighlightedthatregulartrainingandcapacity-buildingactivitiesforthefieldstaffoftheDISCOMandagriculturedepartmentwerecriticalfactorsforthescheme’ssuccesssincetheyweretheprimarytouchpointsonPBPKwithfarmers(MGSIPA,n.d.).SupplyofDaytimeElectricitytoFarmersDuringtheimplementationofthesecondphaseofthePBPKscheme,atechnicalchallengeemergedregardingtheprovisionofdaytimeelectricitysupplytothetargeted250feeders(MGSIPA,n.d.).Significantinvestmentswererequiredtoupgradetheelectricityinfrastructureatthesubstationlevelinordertocopewiththehighersystemloads,whichwereunfeasiblegiventhepoorfinancialsituationofPSPCL,thestateelectricityutility(MGSIPA,n.d.).Inordertoovercomethischallenge,thestatesteeringcommitteedecidedtorevisethescheme’sdesignsothatfeederswouldbesuppliedpowerinshiftsandnotduringthedaytimeashadbeenoriginallyenvisagedduetoconstraintsinthestate’selectricitytransmissionIISD.org96ImplementingSolarIrrigationSustainablysystem.ThisunderscoresthepotentialforcombiningfeedersolarizationunderthePM-KUSUMschemewithPBPKtoprovideadaytimeelectricitysupply.A2.6LearningsandRecommendationsThePBPKpilotschemeincludedseveralinnovativemeasuresinboththeschemedesignanditsimplementationthatcanhelpaddresssomesustainabilityconcernsofsolarirrigation.Theseinclude:DBTSchemeforAgricultureThePBPKpilotschemeusedaDBTmodeltoincentivizefarmerstouseelectricityandwaterjudiciously.TheuseofDBTmodelscanhelpimprovesubsidiestargetingandaddressthegroundwaterdepletionchallengesthathaveemergedoverthepastfewdecadesfromtheprovisionofsubsidizedandunmeteredelectricityintheagriculturesectoraswellasmitigatetheriskofgroundwaterdepletionbeingacceleratedbysolarirrigationinspecificcontexts.ThemainchallengeislikelytobetheimplementationcapacityofstateagenciestoimplementboththePM-KUSUMschemeaswellaswaterincentivemechanismschemeslikePBPK,giventhemultitudeofimplementationchallengesthathavebeenpreviouslyhighlighted.PBPK’sdesignisbasedononeofthreeDBTmodels,wherefarmersdonotreceiveanupfrontcashincentive.Theyareinsteadallocatedaseasonallyadjustedpredeterminedamountofelectricityunitsbasedontheircapacity(HP)ofconnectedloadandarepaidamonetaryincentivedirectlyintheirbankaccountsiftheyuselessthantheirallocatedconsumption.Theelectricityconsumptionoffarmersthatenrolintheschemeismonitoredusingsmartmeters.BecauseavailingcashincentivesunderPBPKarelinkedtotheirelectricityconsumption,astudyfoundthatfarmerswerekeentoinstallmetersintheirfieldsinsteadofresistingthemastheyhadinthepast(Gulati,2021).FocusonWater-SavingTechniquesinDemonstrationFarmsPunjabcreateddemonstrationfarmsonthreeofthescheme’sfeederstohighlightthebenefitsofwater-savingtechniquesandresource-conservationtechnologiesandtoencouragefarmerstoscaleupthesepracticesacrossthestate(PSPCL,2022).Asimilarsetupofdemonstrationfarmscouldbeconsideredbystatestopromotetheadoptionofmicro-irrigationandotherresource-conservationtechnologiesalongwithsolarirrigation.Thetechnologiesandpracticesthatwereshowcasedonthedemonstrationfarmsincludedshort-durationpaddyvarietycrops,alternatewettinganddryingirrigation,plotting,no-tillfarming,aswellasflowmetersandremoteoperationdevicesforturningonandoffpumps.Farmerscouldvoluntarilyselectwhichofthesetechnologiesandpracticestheywereinterestedinandreceiveademonstration.AnevaluationstudybytheIWMIdidnotfindanychangesinfarmingpractices,suchaschangesincropchoice,shiftingtoashorter-durationpaddyvariety,oradoptingimprovedwatermanagementtechniquessuchasdirectseedingofriceandbunding(Mitraetal.,2022).Thisislikelyaconsequenceofthestudybeingconductedinthefirstyearofenrolmentformostfarmers,whereasbehaviourchangeandefficientfarmingpracticestakemoretime.IISD.org97ImplementingSolarIrrigationSustainablyCoordinationStructuresandIncentivesforImplementingAgenciesAsidefromwater-conservationpracticesandincentives,thePBPKscheme’sdesignalsofocusedoncreatinginstitutionalstructuresthatcouldpromoteeffectiveinteragencycoordinationandbetterimplementation.Consultationswithstateofficialsandresearchinstitutesthatwereinvolvedinthepilot’simplementationhighlightedtheseascriticalinaddressingsustainabilityconcerns.Someoftheseelementsinclude:1.Consultationswithfarmers,agricultureandwaterexperts,aswellasfieldstaffofDISCOMstoadjustthescheme’sdesign.Theimplementationoftheschemealsoreliedonthreeindependentadvisorswhowereexpertsintheagriculture,power,andwatersectors.2.Ensuringhigh-levelpoliticalandadministrativecommitmenttotheschemethroughthechairingoftheimplementationbythechiefsecretaryandregularbriefingmeetingswiththechiefminister.Apartfromthis,theschemeensuredthattransparentcommunicationchannelswereestablishedbetweenagencies(power,water,agriculture,extension,andfinance)3.Amulti-layeredandempoweredinstitutionalmechanismwascreated(aselaboratedearlier)tomonitorthescheme’simplementationandmaketimelydecisions.However,challengeshaveemergedovertime,withofficialshighlightingthedropininvolvementofotherdepartmentsinPBPKduetomultiplecompetingpriorities.TheModelforDeterminingBenchmarkElectricityConsumptionUnderthePBPK,anaveragemonthlyelectricityquotabasedonthepumpmotorcapacitywasfixedforeachagriculturefeeder(MGSIPA,n.d.).Theformulausedtodeterminethequotawasbasedonthepreviousyear’selectricityusagedividedbythetotaltubewellloadatafeederlevel.Theaveragewasworkedoutonaseasonalbasiswithahigherallocationforpaddy,asitisamorewater-intensivecropandaloweraverageforthenon-paddyseason.InPhase1,thisentitlementduringpaddyseasonwasabout200KWh/HP/month,andinthesecondphasefeeders,itisfeeder-wise,intherangeof110–180KWh/HP/month(AsianDevelopmentBank,2020).Interviewswithagricultureexpertshavesuggestedthatthestateshouldhaveusedlandholdingsizeinsteadofconnectedloadtodeterminebenchmarkelectricityconsumptionsincethecurrentmodelbenefitslargefarmerswithahigherbenchmarkconsumption.However,thiswouldnecessitateinvestmentsinupdatinglandrecordsandcorrelatingthemwiththeconsumerlistusedbytheelectricityutilitybeforeimplementation.Therefore,theelectricityusage-basedquotawaschosenforpracticalreasons.ThePotentialforReplicatingtheSchemeinOtherStates/ContextsLearningsfromthePBPKschemeinPunjabmaynotbeapplicabletootherpartsofthecountrywithdifferentagroeconomiccontexts.Indeed,apilotstudyconductedinGujaratthattrialledelectricity-linkedincentivesforfarmersfoundahighenrolmentformeteringbutnoimpactonwaterconsumption(Fishmanetal.,2016).LearningsfromPunjabalsosuggestthattheschemedesignneedstobecarefullycalibratedinareaswithahighshareoftenantfarmers.IISD.org98ImplementingSolarIrrigationSustainablyTherefore,itisimportantforstatestoadoptalearning-by-doingapproachandconstantlygatherdataonimplementation.AnIWMIstudysuggestedtherearethreebroadconsiderationsdeterminingthegeneralapplicabilityoftheschemetootherpartsofwater-stressedregionsinNorth-WestIndia(Mitraetal.,2022).1.Afarmer'sdecisiontoreducepumpinghours(andelectricityconsumption)willdependonthemarginalreturnfrompumping,whichisdeterminedbythegroundwaterdepth,croppingpattern,andexistingorpotentialfuturemarketsforagriculturalproduce.2.Theprevalenceofwatermarketsandpumpownershippatternsarelikelytoaffecttheefficacyofasimilarscheme.InPunjab,mostfarmershavetheirownpumps,whichresultsinvirtuallynosharingofwaterwithnon-pumpowners.However,inregionswithacollectivewellownership(e.g.,Gujarat)oramarketforsellingwater(e.g.,BiharandWestBengal),thePBPKschememaybelesseffectivesince,intheseareas,therevenueearnedthroughwatersalesmaybehigherthantheincentiveprovided.3.Anotherconsiderationforpolicy-makersinimprovingthescheme'sdesignissettingupadifferentbenchmarkforelectricityconsumptionatamonthlylevel.UnderthePBPKscheme,asidefromdifferentallocationsbetweenthemainkharifandrabiseasons,monthlyallocationsofelectricityunitsarethesamewithinaspecificperiod,forexample,JunetoOctober.However,aselectricityuseishighestduringtheJunetoAugustperiod,modifyingthefixedmonthlyentitlementtoonethatreflectsthevariationindemandwithintheseasonmightresultingreaterelectricitysavings.©2023TheInternationalInstituteforSustainableDevelopmentPublishedbytheInternationalInstituteforSustainableDevelopmentHeadOffice111LombardAvenue,Suite325Winnipeg,ManitobaCanadaR3B0T4Tel:+1(204)958-7700Website:www.iisd.orgTwitter:@IISD_newsiisd.org
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