Of its several new initiatives, the Narendra Modi government has set out at least two very ambitious targets, which are also quantifiable.
One is achieving 100 giga-watts (GW) of solar power generation capacity by the year 2022. The other is doubling farmers’ income — presumably in real terms — also by 2022, when India celebrates its 75th year of Independence.
If achieved, both would mark major leaps forward, given the country’s current solar generation capacity of barely 8 GW (or 8,000 megawatts) and the past record of farmers’ real incomes increasing by a mere 3.5 per cent on a compounded annual growth basis during 2002-03 to 2012-13. If incomes were to, indeed, double in real terms between now and 2022, the corresponding growth rate would work out to 12 per cent per annum!
So, the question to ask is whether the above targets are really achievable or simply slogans. We believe that the Modi government can definitely make substantial progress in meeting both objectives, provided they are conceived and implemented in unison — a sort of marrying and building on each other.
Our confidence in this stems primarily from the dramatically declining costs of solar power, globally as well as in India, by almost 70 per cent since 2010-11. That, as the accompanying chart shows, has also given a fillip to solar power capacity addition. In the process, solar power has emerged as a competitive source of energy, especially in comparison to that produced from burning of coal. The cost of generating and supplying power through the latter was Rs 5.93/kWh in India in 2013, as per government estimates. As against this, the bidding rates in most solar power projects today range between Rs 4.3 to Rs 5.5/kWh.
There are two policy innovations needed now that can help unleash a simultaneous revolution in solar power and doubling of farmers’ incomes. To start with, the government should have a guaranteed feed-in-tariff (FIT) for solar energy produced in rural areas and sold to power distribution companies or discoms. Secondly, the FIT or price paid to rural producers of solar power should be at least 10-15 per cent higher than that made to power stations burning coal, so as to address the negative externalities from the latter on climate change and human health. This would translate to a rate of Rs 6 to Rs 6.50/kWh for solar power.
Such innovations in policy could trigger out-of-box ideas. That includes installing solar panels on farmers’ fields at 15-20 feet height above the ground. It basically allows enough sunlight for the photosynthetic activity of the plants growing below the panels.
The farmers’ field would, then, look like a chessboard, growing two crops. The first is a ‘traditional’ one on the soil and the other a ‘solar crop’ above the ground!
The major benefit to farmers from this is that they would get access to assured irrigation from solar power. It will replace not just their diesel gen-sets, but also probably provide freedom from grid-linked electricity, which is highly uncertain and often of poor quality. If solar power from their own fields is combined with drip and fertigation, farmers can reduce water and fertiliser usage by almost 50 per cent even while raising productivity by 25-40 per cent. Furthermore, they can feed surplus power over and above their requirements to the grid.
Such guaranteed FIT-based power can provide regular additional monthly income, besides acting like an income insurance cover when their traditional crops fail on account of drought. For the government, too, there can be huge savings on power subsidy bills that currently hover around Rs 70,000 crore a year.
On-farm solar power generation can, moreover, trigger all-round development activity in rural India. With availability of quality 24/7 power, there would be a boost to creation of cold chains, food processing and other small-scale industries that can produce millions of jobs, apart from the setting up of schools, hospitals and other social infrastructure in rural areas. Proverbially speaking, Prime Minister Modi would be able to hit several targets with a single arrow.
The technology for solar power generation on farms, thankfully, already exists. While countries like Japan, China and the UK have demonstrated that it can be done, Germany is the unquestioned leader in the field today, with technologies where the photovoltaic cells in solar panels can actually move like sunflowers following the direction of sun. Business-to-business and government-to-government collaboration with such countries, especially Germany and Japan, can bring in rich dividends for India. The model’s USP is not only its generating clean energy on a cost competitive basis, but also inclusiveness through millions of farmers producing solar power as a second ‘crop’ in their fields and feeding the surplus electricity to grids on a guaranteed FIT basis.
What are the challenges to realising the twin dreams of 100 GW of solar power capacity, including in farms, and doubling of farmer incomes by 2022? The obvious one is getting the state governments on board for implementing the system of FIT. This is where the role of power minister Piyush Goyal comes in. Given his dedicated endeavours for rural electrification and restoring the financial health of bleeding utilities through the innovative UDAY (Ujwal Discom Assurance Yojana) scheme, one hopes he would also move in this direction.
But equally important is the role of the Union Ministry of Agriculture and Farmers’ Welfare. Since doubling of farmers’ incomes is its responsibility, Krishi Bhawan should proactively work towards promoting farmers’ solar associations and mobilising necessary finances through, say, NABARD or even multilateral institutions such as the World Bank. These can be used to enable farmers make upfront capital investments on the fields.
But the overall responsibility to get ministries work together in tandem rests with the Prime Minister’s Office. In his recent trip to Africa, Modi said: “Aspire high, dream big and do more”. Before him, we also had former President A P J Abdul Kalam saying: “Dream is not that which you see while sleeping; it is something that does not let you sleep”. Can the Modi government rise to this challenge to turn its slogans to reality through fusion of ideas? Only time will tell.