Decentralized Solar Plants Can Boost Farmer Incomes and Help India Meet its Climate Targets

June 1, 2023, New Delhi--The implementation of decentralized solar plants under the government's Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM-KUSUM) program can boost farmer incomes, help India reach 50% of non-fossil power capacity by 2030, and improve the financial viability of distribution companies (DISCOMs), according to a new report launched today.

The report--titled Implementing Solar Irrigation Sustainably: A Guidebook for State Policy-makers on Implementing Decentralized Solar Power Plants and co-authored by the International Institute for Sustainable Development (IISD), Consumer Unity and Trust Society International (CUTS), and The Energy and Resources Institute (TERI)--provides practical solutions for state governments to unlock and speed up the rollout of the PM-KUSUM scheme that has been slow for several reasons, such as the pandemic-related disruption and financial constraints faced by farmers and developers.

The study finds that decentralized solar power plants can be a win-win strategy for farmers, local communities, state governments, and DISCOMs.

"Solarized agricultural feeders not only improve the quality and reliability of power supply for farmers, but they also generate new green jobs that are geographically well-distributed among communities, and reduce power purchase costs for the state and DISCOMs--all impacts which increase farmers' income and improve crop productivity," said Anas Rahman, Policy Advisor at IISD and a co-author of the report.

But states need a well-thought-out implementation design plan to maximize deployment outcomes and benefits, and should address the issue of financing that remains the biggest challenge to the PM-KUSUM's success, the report finds. For instance, states can boost investments by reducing the risk perception of the scheme and by increasing tariffs to make returns more attractive for farmers and developers.

In addition, to ensure a successful deployment of decentralized solar plants, it will also be key to effectively allocate responsibilities among concerned departments, facilitate information exchange, undertake infrastructure planning--like deciding the optimum capacity of the plants--and promote linkages to energy and water efficiency, the authors of the report said.

Noting that decentralized solar power plants are not yet widely deployed across the country, the study also identifies areas in the implementation scheme that require on-the-ground experiments to generate evidence for policy formation, specifically in the areas of water incentives and agrivoltaics.

"It is clear that new challenges for implementation and sustainable scheme outcomes will arise in the future as more plants are deployed. It will therefore be critical for states to learn by doing--gathering data on implementation and constantly refining deployment approaches based on the data will be particularly important," Anas Rahman said.

This report was supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and funded by the German Federal Ministry for Economic Cooperation and Development (BMZ).


Media Contacts

Anas Rahman, Policy Advisor, IISD:

Siddharth Goel, Senior Policy Advisor, IISD: