I received this mail from a retired officer from the Indian Navy.
It was really motivating to see how he was trying to find a solution through solar, for the plight of farmers suffering from water shortage.
I am not revealing the name of village and person’s name for privacy and confidentiality. But the lack of these hardly matter. The subject he is talking about could be the case of 1000s of villages across the country.
I do hope that something can be done for these farmers. Not easy, but can be done – the key is of course to figure out a proper PPA scheme and more important, financing model for these as we are talking about poor farmers.
I am aware that there was a Karnataka farmers’ scheme (Solar Mango is even helping a developer put up a 2 MW power plant for the same!), but honestly most farmers will not be avail this scheme as the banks will require a collateral for loan which the poor farmers won’t be able to produce.
Anyway, do read the note sent to me and suggest what you feel could be done.
The mail to Solar Mango:
Dear Sir,
I am a RETIRED SHORT SERVICE COMMISSIONED OFFICER from INDIAN NAVY presently working in – Chennai. I come from a humble family where my grandfather is a freedom fighter and father is a retired district surgeon…My father owns a small plot of land ( Around Six acres ) in a place in Bellary district, Karnataka State. This land falls in dry land area where the climatic condition in that place is dry and we have more than 330 days of sunshine in a year
Since last 7 years my dad is trying to grow crop in the land that we have in our village, every year he tries hard but whatever is earned is given for labour / farmers who work in our field. We are not getting the fruits of the land. Every year we are dependent on rain god…..and there is no water in the ground ( Water table is so low that bore well have failed). Our village is one of the most backward village as many of the farmers have small land of 2 to 3 acres and plight of them is very bad. They try to grow at least one crop per year which will give an amount of around 15 to 10 thousand per acre. I have really felt that, me being well educated should do something to that village and when I was thinking, it occurred to me that have to grow something on the land and if we cannot grow food then why we cannot try and grow power by putting up a solar farm.
As an experiment I want a solar farm of 1MW to be set up in our field, if it is working out then I will be speaking to the villagers and see that they all get benefitted by growing power in their respective fields.
I would request you to help me in realizing my dreams of growing power in the fields where they cannot grow food and together we can bring revolution in the backward villages of India …..
Hoping for a positive reply from you.
Best Regards
#Sender
==
Interesting, don’t you think?
Imagine: A 1 acre plot can have about 200 kW of solar power plant, which will give about 3.5 lac units of power annually, and at a tariff of even Rs 6/kWh, the farmer will get a revenue of over Rs 20 lacs from his 1 acre every year. As against Rs 20,000 he earns from farming, according to the sender of the mail.
Rs 20 lacs Vs. Rs 20,000! 100:1!
Solar looks like a no-brainer, doesn’t it?
Actually, no. The devil is in the details
There is no capital cost (or little capital cost) involved for making the Rs 20,000 every year from farming, but there is a huge capital cost (about Rs 1.2 crores for a 200 kW Plant) involved in making Rs 21 lacs. Secondly, even after investing the capital cost, the farmer has to figure out who would be buying the power from his solar farm for a decent price. Not easy at all.
So, there we are: In lands that are suffering from water scarcity, the farmers can possibly earn a lot more from solar than from their current farming in lands that have water scarcity, but the government needs to find a way of funding these projects in a way that the poor farmers (and not just the rich landlords), can benefit.
Solar Mango will be glad to help any government initiative in this regard, for any part of India. If any of you have any ideas of how to get this idea off the ground, do write in your thoughts in the comments, or send a note to me at narsi@solarmango.com
Dear Narasimhan,
Greetings !!
i want to suggest a solution for this . If these farmers are having a land which is ideal for Solar Power Plants and they have a PPA signed by the govt . Then with the help of investors we can get their plants set up in JV . All the money will be put in by investors . And revenues will be shared between them .
regards,
Karan Tahiliani
Dear Karan
Many thanks for your kind comment.
The farmers surely have land in a good radiation area.
The real challenge is the PPA.
Now, there are two parts/aspects to my answer on the PPA.
Recently, there was a Farmer’s Scheme in Karnataka that has a healthy tariff of Rs 8.4/kWh (it is actually more than healthy, it is almost a princely tariff given the way tariffs have been going down elsewhere!). This scheme was applicable only to those who owned land. I am aware that many of those who actually signed up the PPA are not in a Position to get financial closure from banks, as they do not have the collateral and many cannot even bring up the equity required. For these, I reckon what you are suggesting could be quite useful. Now, this might not be required for every winner for the second aspect mentioned below.
But there is another angle. The Farmer’s Scheme was for just 300 MW, and it covers only a small portion of those farmers who could potentially benefit. Besides, based on some assistance we have done to some of the winners in the Farmer’s Scheme, I can say that quite a few of them are nowhere near Poor – in fact they were seriously rich! So, I guess we will need to see how the PPA is given out in future so that poor farmers benefit.
But overall, yes, if we can figure out a set of investors who could come in the middle such that it is a Win-Win for all, it could indeed be a wonderful scheme for tens of thousands of poor landholding farmers. What could be a challenge however is to get the government to announce an allotment scheme that ensures the really needy farmers benefit. Difficult, but not impossible.
Do let me know your thoughts on this when time permits and who knows, perhaps we can collectively push the government to do something about this.
DEAR SIR,
THANKYOU FOR VALUABLE QUOERY .
WE ARE PROMOT E SOLAR PLANTS ON BASIS OF JOINT VENTURE, PROJECT FUNDING, PROJECT FINANCING MODELS IN ANDHRA PRADESH , TELANGANA, KARNATAKA STATES. THANKS….
Thank you Jaya Raju for your kind info.
Im sure those interested in your services will get in touch with you
All the best
Can banks such as NABARD be the intermediary banks who figure out an investment mdoel for farmer’s solar power plants? If NABARD is able to structure a loan at good terms where perhaps an outside investor participates, then the whole scheme could get off the ground, as Mr KARAN has suggested above.
Dear Sreekanth
An interesting suggestion indeed, thanks for the same
I will check with my contacts at NABARD whether something like this falls under their preview…even if it does not, the government can always utilise the expertise and reach and NABARD for a scheme such as this
Thanks once again for your idea
Take care
Instead of 1 MW minimum that Karnataka farmers scheme has, minimum should be 100 kW or even 50 kW because how can poor farmers invest in a project costing 6 crores – the cost of 1 MW solar power plant today?
If 200 KW can give 20 lacs per year, a 100 KW can give 10 lacs revenues per year which is also very good for the farmers, even if they make 10% overall profits it is Rs 1 lac profit per year, which is much more than what they currently make from the report that the gentelman’s mail has given above??
Having the minimum for ground mounted as 100 kW or lower is indeed an interesting idea.
I don’t see any technical challenges with it; however, the cost of extending it to the substation might be too much relative to the cost of the power plant if the substation is located beyond 5 Kms from the power plant.
Typically, for a 11 KV line, it costs about Rs 6-7 lacs/Km/MW. Now, for a 5 Km stretch, this comes to 30 lacs, which is OK for a 1 MW plant of Rs 6 crores, but might be too much for a 100 kW plant whose total project cost is only about Rs 70 lacs.
But yet, as I said, lowering the minimum is definitely worth considering as it will bring many more farmers into the fold than it does now
Many farmers schemes are said to be nice plans to let the rich get richer instead of them helping the poor farmers…
Dear Mani
Many thanks for your comment
I do appreciate that your point of view is being shared by many others too!
;Lets hope the governments come up with solar policies that are really “poor” farmer friendly in future
Central and state governments should come with an overall comprehensive scheme so that poor farmers can also participate. Otherwise only rich farmers will get it.
Last time in Karanataka farmer scheme, the entire bidding was online. how can you expect a poor farmer to be so good at using internet to bid??
Can farmers get only 15000 Rs from one acre of land by doing farming? It sounds really small to me.
Dear Tejaswi
It depends on what you are growing, naturally!
But yes, for some crops, the yield per acre per year might not be much more than Rs 20,000, of course with the minimum support price etc., this could go a bit higher for some of the not-so-fertile lands, but it could be as bad as this too
This is not the case for food crops alone, even some of the supposedly attractive cash crops might not actually make a lot.
For instance, I used to work extensively in the castor oil sector earlier. The average castor seed yield per hectare per year is only about 1.5 tons; even assuming there are two harvests, a hectare yields only 3 tons per year – given that a hectare is 2.5 acres, the farmer does only about 1 ton/acre per year even with two harvests.
The castor seeds sell at about 35-40,000 Rs per ton, so that’s pretty much what the farmer makes and that for a crop which gives more money than many other crops on average. And this used to be only about Rs 30,000 /ton until a few years back, only now it has increased to this much.
The poor farmers need a lobby, without that, this scheme will be expropriated only by rich people
Well, Kranti, farmers already have a lobby, it is just that they might want to use this lobbying power to push for suitable business models and frameworks so that poor farmers can also be a part of the solar power revolution,
Otherwise, yes, the conventional schemes might end up benefitting only the rich farmers.
One such framework could be what I had indicated here – http://www.solarmango.com/blog/2015/12/14/business-models-for-mw-solar-power-plants-in-india/#comment-4908
can panchayats play a role in this somehow?
Farmers on their own cannot put up costly solar power plants. A collaborative framework the includes the government and financing agencies is required for this to happen.
In fact, in the recent Karnataka farmers solar scheme, while a few poor farmers actually got allocations, they are not able to get financial closure because they cannot bring the collateral for the banks.
This will be really useful for many farmers in rajasthan as some regions are really bad affected due to drought, same for some regions in gujarat also
Is it true that something like this scheme is happening in California farm sector also which also gets affected by drought I understand?