The importance, opportunities, and challenges of DRE-based technologies in the Indian agricultural sector.
India’s agricultural sector, which employs almost half of the country’s workforce and contributes significantly to its economy, faces numerous challenges. One of the most pressing issues is the lack of reliable and affordable energy access, particularly in remote and off-grid areas. Farmers in these areas are heavily dependent on fossil fuels for irrigation, crop drying, and other energy-intensive activities, which not only increases their production costs but also contributes to environmental degradation and climate change. Moreover, power outages and voltage fluctuations further exacerbate the challenges faced by farmers, causing crop losses and reduced yields. Decentralized renewable energy (DRE) technologies have the potential to revolutionize the sector by providing a sustainable and reliable source of energy to farmers. However, it requires a sustained effort from all stakeholders to address the challenges and fully realize the opportunities. Here are the key points to consider:
- Farmers in India, particularly in remote and off-grid areas, face the challenge of lacking reliable and affordable electricity. DRE technologies like solar water pumps, biomass-based dryers, and mini-grids provide a sustainable and reliable source of energy, reducing dependence on costly and polluting fossil fuels. (Alliance for Rural Electrification)
- DRE technologies can also help improve crop yields, reduce post-harvest losses, and enhance food quality, resulting in better livelihoods for farmers and rural communities.
- Adopting DRE technologies in agriculture can contribute to the national goals of energy security, climate mitigation, and rural development.
- The market for DRE-based technologies in agriculture is growing rapidly, with increasing demand from farmers, entrepreneurs, and investors. (The market size is expected to rise from USD 2.86 billion in 2021 to USD 5.64 billion by 2028 at a CAGR of 10.2% during the forecast period, according to the “Solar Water Pump Market, 2021-2028” report by Fortune Business Insights).
- The government of India has launched several initiatives to support the deployment of DRE technologies in agriculture, such as the Kisan Urja Suraksha Evam Utthan Mahabhiyan (KUSUM) scheme, which aims to install 20 lahks standalone Solar Powered Agriculture Pumps as well as solarisation of 15 Lakh Grid-connected Agriculture Pumps.
- Private sector companies, including startups, are also investing in DRE-based solutions for agriculture, leveraging innovative business models and technologies. (In India, there is an estimated USD 53 billion market in using clean energy for productive enterprises in rural areas such as cold storage, looms, rice mills, sewing machines, and many others, according to a report by CEEW)
The adoption of DRE-based technologies in agriculture faces several challenges, such as high upfront costs, limited access to financing, and lack of awareness and technical skills among farmers and service providers. (Solar Technology Adoption in the Agriculture Sector in India – Opportunities and Challenges)
Addressing these challenges will require a collaborative approach involving governments, financial institutions, technology providers, and communities. Innovative financing models, such as pay-as-you-go and leasing, can help overcome the financial barriers, while capacity building and awareness campaigns can enhance the technical and social acceptance of DRE technologies in agriculture. In addition, private investments and public-private partnerships can play a crucial role in addressing the challenges faced by the agricultural sector in India regarding energy access. Public-private partnerships can leverage the strengths and resources of both the public and private sectors to develop and implement effective policies and programs that support the deployment of DRE technologies in agriculture. Such partnerships can also help to overcome the financial and technical barriers to adoption by providing access to financing, capacity building, and technical support, thus enabling a more sustainable and equitable agricultural sector in India.