What are Agri Photovoltaics?

Context: Agri Photovoltaics (APVs) offer a sustainable solution to boost farmers’ income by combining solar energy generation with crop cultivation. To scale effectively in India, APVs need supportive policies, standardised norms and strong financial incentives.

Agri Photovoltaics

• APV is a system that allows solar panels to be installed above farmland, enabling both electricity generation and crop cultivation on the same land.
• Two common designs in APVs include:
  • Growing crops between rows of solar panels
  • Solar panels raised about 2 metres above the ground, allowing crops to grow underneath.
• First proposed in 1981 by German scientists. APVs aim to maximise land-use efficiency and create dual income streams for farmers - from agriculture and solar energy.

Benefits of Agri Photovoltaics

• Dual Revenue stream for Farmers: Farmers can earn both from crop cultivation and solar energy - either through lease income or direct energy sales to the grid. Ensures stable and diversified income, reducing dependence on unpredictable crop yields.
• Efficient Land Use: Allows simultaneous food and energy production on the same land. Increases productivity per unit of land, vital for a country with just 2.4% of global land and 18% of population.
• Improved Microclimate for crops: APVs may also create favourable microclimatic conditions that reduce water loss from and heat stress on plants.
• Energy security: Supports India's solar mission and rural electrification by decentralising energy production. Contributes to India’s solar energy targets and aids to commitment to Net Zero emissions by 2070.

Challenges to Adoption of Agri Photovoltaics 

• High Capital Expenditure: While a typical 1-MW ground-mounted solar plant in 5 acres of land would cost around Rs 2.7 crore, an APV system will incur an additional 11% due to the specialised infrastructure it requires.
• Lack of Standardised Guidelines: India currently lacks standardised norms for APVs, leading to ambiguity in project design and implementation. In contrast, countries like Japan and Germany have clear regulatory frameworks regarding panel height, crop yield loss, and land-use criteria for APV projects.

Japan mandates that:

• APV structures must be temporary and removable.
• Panel height must be at least 2 meters.
• Crop yield loss must not exceed 20%.
• Projects are reviewed every 3 years to assess their agricultural impact.

Germany, through its framework DIN SPEC 91434, requires:

• At least 66% of the original agricultural yield (reference yield) must be maintained.
• Only up to 15% of arable land can be used for solar infrastructure.

This ensures that agriculture remains the central focus, even with high energy output.

• Low Feed-in Tariff (FiT) reducing project viability: Feed-in Tariff (FiT) is the fixed price at which power producers like farmers or solar developers can sell electricity back to the grid. FiT is often too low, reducing project viability. E.g., Under the PM-KUSUM scheme in Rajasthan, the FiT is ₹3.04/unit. At this rate, the payback period for a 1-MW ground-mounted solar plant is 15 years, which discourages investors due to the long return period.
• Land Availability and Size: In India, over 86% of farmers are small and marginal, owning less than 2 hectares of land. Implementing APVs on smaller farms may not always be economically feasible due to land constraints and high initial costs.
• Lack of farmer training and technical knowledge. 

Way Forward

• Learn lessons from Germany and Japan to develop national APV guidelines, incorporating clear specifications on panel height, permissible crop yield loss, and land-use norms.
• Introduce a higher Feed-in Tariff (FiT), aligned with the thermal average power purchasing cost for State DISCOMs (₹4.52/unit), to reduce the payback period to just four years. This would make APV systems more economically attractive.
• Expanding institutional support through grants or NABARD’s credit guarantee for APV investments candidates also lower financial barriers to smallholders.
• Leveraging farmer institutions such as FPOs and cooperatives which can help farmers pool resources and provide stronger market linkages. 
• Capacity-building programmes training and equipping farmers with the expertise to manage APV systems.
• Revamp PM KUSUM scheme on agricultural solarisation to accommodate APVs in its delivery system could help scale the innovation across the country.

Agri Photovoltaics hold great promise for transformation. However, success depends on two pillars: economic incentives and a robust policy framework that ensures farming remains central.