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30 July 2021

Indian farmers failing to access financing for solar irrigation pumps – report

A government scheme promoting the uptake of solar irrigation pumps in India is falling short of its targets because farmers cannot afford them, says the Institute for Energy Economics and Financial Analysis.

By Energy Monitor Staff

The Indian government is falling far short of its target to install two million off-grid solar irrigation pumps in the agricultural sector by 2022, as many farmers fail to access the requisite financing, states a report from US not-for-profit the Institute for Energy Economics and Financial Analysis (IEEFA).

A farmer checks the water released in a wheat field that uses solar panels for irrigation at Vahelal village near Ahmedabad, India, February 2021. (Photo by Sam Panthaky/AFP via Getty Images)

The ‘PM-KUSUM’ scheme set up in July 2019 by the central government hopes to deploy 30.8GW of solar irrigation pumps by March 2022. However, against the target of two million pumps, only 246,000 were installed in the 2019/2020 fiscal year.

Solar irrigation systems generate electricity using solar PV cells in order to power irrigation pumps. The technology supports the uptake of distributed solar power generation, while also meeting the power demands of the agricultural sector, which is responsible for roughly 20% of India's electricity consumption, the report states.

However, investing in the upfront cost of the pump and accessing formal bank credit remains a key challenge for small-scale farmers, as banks do not consider farmers' land to be strong collateral against a loan, the IEEFA says.

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