In Gujarat, solar energy is helping farmers double their income


Business Line

 Rutam Vora

Farmers covered under pilot SKY Scheme get more money from selling power than farm produce

Farmers in Gujarat are reaping a rich harvest from their solar power installations, quite literally doubling their incomes.
Babubhai Patel, a farmer in Vahelal village of Dahegam, about 40 km from Ahmedabad, has a reason to look for a bright future in farming. A dill seed or castor seed grower, Patel has now become a power producer, earning at least double what he earned from his produce last year.
Babubhai cultivated dill seed (a spice used as an ingredient in different food preparations) on about 15 acres of his land and got a total crop of 24 quintal at the rate of ₹5,250 per quintal. “What I earned from solar power generation within the first four months of installation is very promising. If the trend continues then not only will my installation cost be recovered but I will have more money on hand than I got from my crop,” said Patel showing his 71.5 kilowatt (kW) of solar ground-mounted solar panels.
The Gujarat government, in 2018, launched a pilot project of its farmer-oriented scheme Suryashakti Kisan Yojana (SKY), aimed at setting up solar pumps on farmland and facilitating farmers to sell the surplus power generated to the grid and earn extra money.
Another farmer, Babubhai’s neighbour Harshad Patel, has a 55 kW installation on his farm. He spent nearly ₹1,00,000 towards the 5 per cent farmer contribution for the project, while he secured about ₹9 lakh in loans backed by the State utility. The solar pump installations under the SKY Scheme were provided with 60 per cent subsidy.
“This means, within a year of installation, I will recover all the money that I have invested. On top of it, every year net income is at least double what we usually get from our conventional farming,” said Patel, who is the head of the farmers committee formed to have represent growers for engagement with the government and the equipment company.

Settling debt

Asked where the extra buck earned from the solar installations would be utilised, the farmers pointed out that their priority remains to first settle their debts and also use the additional revenues to meet their agricultural expenses such as diesel, inputs and equipments.
“Our dependence on farming gets reduced if such a revenue stream continues for the promised period. Besides using the additional earnings for our farm expenses, we will also look to invest the money to create a new line of business linked with our farm activity,” said Patel.
Since it was just a pilot project with a specific financial outlay from the government, the SKY scheme provides an attractive tariff of ₹7 per unit to these farmers, which includes ₹3.50 from the State allocation and ₹3.50 from the Discoms.
The effective period of the Scheme is 7 years, after which the State support will be withdrawn and the farmers will get ₹3.5 per unit, which is agreed through a 25-year PPA with the discoms.
“It will still be a beneficial proposition because by then our loan component will be repaid and the instalment which gets deducted from our earnings will also stop. This will eventually off-set the loss in the tariff part,” Patel explained.
A State government functionary explained that the pilot of the Scheme was launched with an estimated spend of ₹900 crore.
Notably, about three years ago in Anand district, a Solar Cooperative was launched with nine farmers to lead the solar energy generation from their farm land. Dhundi Saur Urja Utpadak Sahakari Mandali became a model for solar entrepreneurship as these farmers use these solar pumps to supply water to nearby farmers at half the rate they pay otherwise.

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