Harvesting the Sun Twice: Can Agrivoltaics Transform India’s Agriculture and Energy Sectors?
Harvesting the Sun Twice: Can Agrivoltaics Transform India’s Agriculture and Energy Sectors?
The global agrivoltaics market is witnessing a significant surge, projected to grow at a compounded annual growth rate (CAGR) of approximately 11%[1]. Pioneered by countries like China, Japan, and Germany, agrivoltaics is emerging as a promising solution to the dual challenge of food and energy security. India, with its high agricultural dependency and increasing energy demands, is uniquely positioned to leverage this innovative technology. However, to realize its full potential, the country must address policy gaps, financial constraints, and farmer hesitancy.
The Case for Agrivoltaics in India
India has over 20 active agrivoltaics pilot projects across ten states, with notable initiatives in Rajasthan, Maharashtra, and Kerala[2]. The country’s abundant solar radiation and extensive agricultural lands create an ideal environment for agrivoltaic integration. The PM-KUSUM scheme, which aims to promote solar energy in rural areas, lays a foundation for agrivoltaic adoption. However, existing policies primarily focus on standalone solar installations rather than integrated agri-solar models.
Countries leading in agrivoltaics, such as Germany and Japan, have created conducive policy environments through feed-in tariffs, direct subsidies, and innovative financing models[3]. India can learn from these experiences to craft tailored contextual solutions that suit its diverse agro-climatic conditions and socio-economic realities.
Data-Driven Insights: How Agrivoltaics Benefits Agriculture
Research suggests that agrivoltaics can improve land-use efficiency by up to 60%, enabling farmers to cultivate crops while simultaneously generating solar power[4]. In Japan, agrivoltaic systems have been successfully applied to over 120 crop varieties, ensuring that solar panel installations do not compromise agricultural yields[5]. Indian pilot projects have shown promising results: for instance, a farmer-owned agrivoltaics plant in Karnataka has helped improve income diversification while maintaining agricultural output[6].
The Financial and Policy Landscape
One of the primary challenges hindering agrivoltaics adoption in India is the high initial investment cost, estimated to be 30-40% higher than traditional solar installations[7]. To address this, several financing models are emerging:
Community or Shared Ownership: Farmers collectively invest in agrivoltaic systems and share the benefits. This model is gaining traction in the U.S. and has potential for India.
Land Leasing: Farmers lease their land to energy developers for agrivoltaic projects, earning a steady income without upfront investments.
Green Bonds and Microfinance: Countries like France have successfully issued green bonds to fund agrivoltaic projects. Microfinance institutions in India are also stepping in to provide small-ticket loans for agrivoltaic installations[8].
While financial innovations can accelerate adoption, India must also establish clearer regulatory frameworks to mitigate uncertainties. Currently, policies regarding land-use restrictions for agrivoltaics remain ambiguous, deterring widespread implementation.
Challenges and Potential Roadblocks
Despite its promise, agrivoltaics faces several challenges in India:
- Policy and Regulatory Barriers: Ambiguous land-use regulations make it difficult for farmers to integrate solar installations without risking agricultural land reclassification.
- High Implementation Costs: Without targeted subsidies or innovative financing, agrivoltaics remains a costly alternative for small and marginal farmers.
- Farmer Hesitancy and Awareness Gaps: A lack of awareness about agrivoltaic benefits leads to reluctance among farmers to adopt the technology.
- Operational Challenges: Integrating solar panels with different crop cycles, irrigation needs, and mechanization requires careful planning.
The Road Ahead: Scaling Agrivoltaics in India
For agrivoltaics to thrive in India, a multi-pronged strategy is essential:
– Policy Integration: Agrivoltaics should be formally integrated and defined into India’s renewable energy and agricultural policies, with clear guidelines for land-use and subsidies.
– Technological Advancements: Bifacial solar panels, smart tracking systems, and AI-driven crop monitoring should be explored to maximize land productivity.
– State-Specific Strategies: Given India’s agro-climatic diversity, agrivoltaic policies should be tailored to regional requirements, similar to the decentralized approaches adopted in Germany and Japan.
– Farmer-Centric Financial Models: Government-backed green bonds, microfinance schemes, and community-driven agrivoltaic projects should be promoted to make the technology accessible to small and marginal farmers.
Conclusion
Agrivoltaics presents a compelling opportunity for India to address its energy and food security challenges in a climate-resilient manner. However, while this model of agriculture is beneficial, the major beneficiaries still remain the farmers with high income and with more land. This gap is a major factor that can decide the growth or decline of AgriPV in India.
While countries like Germany and Japan offer successful models for adoption, India must develop its own context-specific strategies. By fostering definitive policy clarity, technological innovation, and financial accessibility, agrivoltaics could become a game-changer for India’s agricultural and energy future.
1- Precedence Research, The Business Research Company, “Global Agrivoltaics Market Analysis,” 2023.
2- NSEFI, IGEF, IISD, Cuts, GIZ, “Agrivoltaics in India: Current Trends and Future Prospects,” 2023.
https://www.iisd.org/system/files/2023-05/agrivoltaics-in-india.pdf
3- IEA, GEF, Fraunhofer ISE, “Agrivoltaic Policy and Adoption Trends,” 2022.
https://www.ise.fraunhofer.de/content/dam/ise/en/documents/publications/studies/APV-Guideline.pdf
4- EconomicTimes, Why Agrivoltaics represent a game changing technology in the solar power sector, 2023.
5- ISEP, “Evolution of Agrivoltaic farms in Japan” 2021
https://www.researchgate.net/publication/352803816_Evolution_of_agrivoltaic_farms_in_Japan
6- CSTEP. (2023). “Exploring Business Models for Agrivoltaics in India.”
https://cstep.in/drupal/sites/default/files/2023-03/policybrief_agrivoltaics_final.pdf
7- IGEF, NSEFI, “Agrivoltaics in India-Overview of Projects and Relevant Policies” v3-2023.
8- CSTEP. (2023). “Exploring Business Models for Agrivoltaics in India.”
https://cstep.in/drupal/sites/default/files/2023-03/policybrief_agrivoltaics_final.pdf
Author: Nitika Banhani, Senior Research Associate, Development Solutions
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