Mainstreaming Micro Solar Pumps to Improve Incomes of Marginal Farmers

Wase Khalid, Abhishek Jain, Shruti Jindal, Arpan Thacker
June 2022 | Sustainable Livelihoods

Suggested citation: Khalid, Wase, Abhishek Jain, Shruti Jindal and Arpan Thacker. 2022. Mainstreaming Micro Solar Pumps to Improve Incomes of Marginal Farmers. New Delhi: Council on Energy, Environment and Water. 

Overview

This Powering Livelihoods market research report provides insights on the value chain, market segmentation, and policy associated with micro solar pumps. With an aim to boost sectoral growth, it highlights the irrigation needs of marginal farmers, how solar pumps can meet these needs and the market segments and geographies that entrepreneurs can target. This report also looks at relevant policies and stakeholders in the micro solar pump category.

Powering Livelihoods, a USD 3 million (INR 21 crore) initiative by CEEW and Villgro, is mainstreaming clean energy-based solutions in India’s rural economy. It provides capital, technical, and sectoral growth support to help social enterprises deploy many clean energy-based livelihood solutions in a gender-inclusive manner.

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Key Highlights

• The total addressable market (TAM) for irrigation applications involving sub-HP solar pumps (SHSPs) is USD 6.4 billion (INR 47,805 crore), with the potential to impact 7.5 million marginal farmers. For animal husbandry applications, the TAM of SHSPs is USD 1.3 billion (INR 9,689 crore), with the potential to impact 1.5 million households.
• The serviceable available market (SAM) for irrigation applications is USD 2.6 billion (INR 19,279 crore). More than 3 million sub-HP solar pumps can be deployed across India, impacting the lives of as many marginal farmers. The SAM for irrigation applications has two parts:
  • A USD 862.1 million (INR 6,466 crore) market for more than 1 million SHSPs with the potential to reduce costs, debt, and emissions and improve incomes.
  • A USD 1.7 billion (INR 12,813 crore) market for more than 2 million SHSPs with the potential to improve irrigation accesses, yields, crop cycles, and incomes.

District-wise distribution of SAM for animal husbandry applications

• The SAM for animal husbandry is USD 352.1 million (INR 2,641 crore). More than 400,000 sub-HP solar pumps can be deployed across India, impacting the lives of as many households.
• West Bengal, Kerala, Assam, Andhra Pradesh and Bihar account for 74 per cent of the SAM for irrigation applications. In contrast, Uttar Pradesh, West Bengal, Maharashtra, Gujarat, Bihar, Madhya Pradesh, and Rajasthan account for 90 per cent of the SAM for animal husbandry applications.
• The role of financiers, end-user financing schemes, and support from other private players in providing loans for SHSPs is crucial for catalysing large-scale deployment because it is difficult to subsidise solar pumps for the large farmer base in the country.
• Entrepreneurs can deploy SHSPs through equipment sales or the service (shared usage) model. After the initial stage, when subsidised/ grant-based sales have tapered off, sales through distributors and retailers (DAR) & asset financing partnerships are critical to scaling up equipment sales