Context: A farmer-led agrophotovoltaics (APV) pilot project in Rajasthan has successfully cultivated maize beneath operational solar panels, demonstrating that agricultural land can simultaneously support food production and solar-energy generation.
About Agrophotovoltaics (APV)
- Definition: Also called agrivoltaics, APV involves the simultaneous use of the same land for agriculture and solar-power generation, generally by installing solar panels at an elevated height above crops.
- Dual-Use Model: Unlike conventional ground-mounted solar farms, which can remove agricultural land from cultivation, APV allows farmers to retain crop production while earning income from electricity generation.
- Microclimate Benefits: Elevated panels provide partial shade that can reduce heat stress and soil-water evaporation, creating a favourable microclimate, particularly for dryland and off-season agriculture.
Why Is APV Important for India?
- Food–Energy–Land Nexus: India's expansion of renewable energy creates competition for land with agriculture; APV can address this land-use conflict by combining food and energy production on the same parcel.
- Climate and Food Security: APV can contribute simultaneously to renewable-energy targets, climate goals and agricultural incomes, while reducing the need to divert additional agricultural land to solar projects.
- Farmer Income Diversification: Farmers can earn from both crop cultivation and electricity generation, reducing dependence on agricultural income alone.
Link with PM-KUSUM
- PM-KUSUM: The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan promotes solar energy among farmers through decentralised solar power generation and solarisation of agricultural pumps, with implementation largely dependent on State-level machinery.
- APV Potential under PM-KUSUM: Integrating APV principles with farmer-owned solar installations can potentially increase land-use efficiency and rural energy income while retaining agricultural production.
Rajasthan Pilot: Key Findings
- Income Enhancement: The Rajasthan pilot indicates that APV can increase farmer income by around ₹3–4 lakh per acre annually, raising the expected Return on Investment (ROI) from about 12% to 18%.
- Power Purchase: Jaipur Vidyut Vitran Nigam Ltd. (JVVNL) purchases the generated electricity at ₹3.14 per unit under a binding 25-year Power Purchase Agreement (PPA).
- Farmer Interest: A GIZ India survey of 1,700 farmers found that 54% expressed interest in adopting agrivoltaic technology.
Challenges
- High Initial Cost: Elevated APV structures require approximately ₹35 lakh additional capital expenditure compared with conventional solar mounting systems, making adoption difficult for small and marginal farmers.
- High Financing Cost: Agricultural solar projects currently face commercial lending rates of around 10.5%, which can make capital-intensive APV projects financially unattractive without concessional finance.
- State-Level Bottlenecks: PM-KUSUM's decentralised implementation can create delays in obtaining PPAs and land-related clearances, while high stamp duties can further increase project costs.
- Access to Credit: Without suitable priority-sector lending or credit guarantees, risk-averse smallholders may struggle to finance the higher upfront investment required for elevated solar structures.
Role of Blended Finance
- Viability Gap Funding (VGF): Public support through VGF can bridge the gap between project costs and commercially viable returns, making APV more financially feasible for farmers.
- CSR Financing: Corporate Social Responsibility (CSR) funds can complement public finance for pilot projects and reduce the financial burden on individual farmers; blended finance in the Rajasthan model reportedly nearly halved the payback period.
Retrofitting Existing Solar Farms
- Incremental Retrofitting: Existing solar installations can be converted to APV gradually, for example one inverter at a time, allowing electricity generation to continue during construction and preventing a complete loss of daily energy revenue.
Institutional and Policy Support
- ICRIER Assessment: The Indian Council for Research on International Economic Relations (ICRIER) released the April 2025 report “Solar as a Third Crop to Augment Farmers' Income”, providing empirical support for retrofitting farmer-owned solar installations into APV systems.
- MNRE: The Ministry of New and Renewable Energy (MNRE) can establish a single-window clearance mechanism to reduce delays relating to land use, approvals and PPAs.
- NABARD: The National Bank for Agriculture and Rural Development (NABARD) can establish a dedicated credit-guarantee mechanism to enable farmers to access loans at rates below prevailing commercial benchmarks.
- Technical Standards: The Central Government should establish uniform technical standards and eligibility criteria to clearly define agrivoltaic projects and ensure their safety and effectiveness.
- Agricultural Demonstration: Krishi Vigyan Kendras (KVKs) and State agricultural universities can conduct region-specific trials to generate evidence on crop selection, shading levels, yields and local agronomic practices.
Significance: APV represents a “food–energy synergy” approach that can convert the conventional competition between agriculture and renewable energy into complementary land use, while supporting farmer income diversification, clean energy transition and climate resilience.
