SUMMER INTERNSHIP REPORT
“DEVELOPING A MARKET BASED BUSINESS MODEL FOR SOLAR WATER
IRRIGATION IN BUNDELKHAND”
Under the guidance of
Ms. SugandhaAggarwal, Senior Fellow, CAMPS, NPTI
At
Claro Energy Pvt. Ltd., New Delhi
Submitted By
MOHAK THAKUR
Roll. No 1120812230
MBA, Power Management (2011-13)
CenterforAdvanced Managementand PowerStudies
NATIONALPOWERTRAININGINSTITUTE
(Under Ministry of Power, Govt. of India)
Affiliatedto
AUGUST 2012
DECLARATION
I, MohakThakur, Roll No 1120812230, student of MBA-Power Management (2011-13)at
National Power Training Institute, Faridabad hereby declare that the Summer Training Report
entitled “DEVELOPING A MARKET BASED BUSINESS MODEL FOR SOLAR WATER
IRRIGATION IN BUNDELKHAND”is an original work and the same has not been
submitted to any other Institute for the award of any other degree.
A
Seminar
presentation
of
the
Training
Report
was
made
on
________________________ and the suggestions as approved by the faculty were duly
incorporated.
Presentation In-Charge
Mohak Thakur
(Faculty)
Countersigned
Director/Principal of the Institute
i
ii
ACKNOWLEDGEMENT
I take this opportunity to thank all those who have been instrumental in completion of my
training. Words could never be enough to express my true regards to all those who helped me
in completing this project. I cannot in full measure, reciprocate the kindness shown and
contribution made by various persons in this endeavor of mine. I shall always remember them
with gratitude and sincerity. First of all I would like to take the opportunity to thankMr.
KartikWahi,MrGaurav Kumar, Mr. Soumitra Mishra, Directors, Claro Energy Pvt.
Ltd, for giving me the opportunity to undergo my summer internship in their company.
I would forever be indebted to my Project GuideMr. AmarjeetYadav, Deputy General
Manager, Claro Energy Pvt.Ltd. for his guidance and support throughout the course of my
project. The Inputs provided by him have been invaluable for the completion of my Project.
I feel deep sense of gratitude towards Mr. J.S.S.Rao(Principal Director,
CP&M/BDD/CAMPS), Mr. S.K. Chowdhary(PrincipalDirector,CAMPS)
,theentirefacultyinCAMPS andmy internal Project Guide Ms. SugandhaAggarwal, Senior
Fellow, NPTIfor assisting me throughout the project.
My sincerethankstoMrsInduMaheswari, Deputy Director, NPTI and Mrs. Manju Mam,
Deputy Director, NPTI for arranging my internship at CLARO ENERGY PVT Ltd. and
being a constant source of motivation and guidance throughout the course of my Internship.
Also like to thank all my NPTI senior and batch mates who helped me time and again.
Mohak
iii
EXECUTIVE SUMMARY
India is a developing economy and agriculture is one of the mainstream occupations.
Being an agricultural country where majority population is dependent on agriculture,
agriculture forms the main source of income. The contribution of agriculture in the national
income in India is more, hence, it is said that agriculture in India is a backbone of Indian
Economy. In the countries like India, where agriculture is the greatest source of economy,
monsoon season plays a pivotal role.This is one the major reason for dependence on monsoon
season for the economic growth of India.
About 70 per cent of agricultural land is monsoon-dependent. But monsoons in India being
highly irregular and erratic, the agriculture water requirements need to be met by using
underground water resources, which are harnessed through pumps. To make an irrigation
system as efficient as possible, the pump must be selected to match the requirements of the
water source, the water piping system and the irrigation equipment.
In India, the electricity for running the pumps is supplied mainly through grid supply. But
due to the unavailability of grid supply in rural areas, the pump mechanism is largely diesel
operated.Diesel generator sets have high operating costs due to ever increasing cost of diesel
plus the high maintenance charges.Seasonal crisis and price volatility of diesel are common
hazards that are associated with diesel pump based irrigation. It also involves carrying hassle
of diesel, periodic and sudden maintenance and servicing issues with the engine, dry run (in
case of shallow engines), futility of engine life, etc. So it is time for a suitable alternative in
place of diesel pumps.Solar pump thus becomes the need of the hour.
For people living in remote areas, solar water pumps are usually the only solution as there is
no access to diesel. If there is diesel, Solar Water Pumps are the only solution or an excellent
alternative for diesel as the cost of running power lines or diesel pumping may be too great.
A solar powered water pump differs from a regular water pump only in that it uses the sun's
energy to supply electricity for the pump. The solar panels absorb the sun's energy and
convert it to electrical energy for the pump to operate. All the pumped water is stored in a
water tank so that there is constant supply even in bad weather conditions and during night
time where there is insufficient power to generate the solar water pumps. Solar powered
iv
water pumps represent a higher initial investment, however, over a period of 5 years they
represent a cost benefit due to minimal maintenance costs compared to diesel pumps.
The Jawaharlal Nehru National Solar Mission (JNNSM) has been the most
significant policy step towards promoting solar power in India. The mission proposes to
achieve 20,000 MW of capacity from solar energy by 2022 through a three phase approach.
It aims to achieve a long-term reduction in the cost of solar power generation
througheconomies of scale. The mission has also set specific targets for the off-grid solar
segment.
Solar energy is a clean source of energy which does not require any running fuel. Apart from
the initial installation cost, solar pumps have low maintenance cost. The subsidies along with
the available soft loans which can be availed through The Indian Renewable Energy
Development Agency (IREDA) andNational Bank for Rural and Agricultural
Development(NABARD) make solar pump a viable option.
The focus area of this project has been the Bundelkhandregion in India. This region faces the
problem of lack of grid supply which creates the need to look out for other alternatives for
irrigation pumps. Solar thus stands out against Diesel operated pumps which have high
operating costs and are environment polluting.
After an initial extensive study of NSM (to understand the framework of Solar policy) and
understanding the mechanism of availing the subsidy and soft loans, a primary research of the
region was undertaken to gather data related to water head, soil structure and agricultural
practices in order to formulate a customized solar pumping solution for the specific site.
Various business models were taken into consideration of which Pay-per-use business model
was found to be financially viable w.r.t the conditions in Bundelkhand.
v
LIST OF FIGURES
FIGURE 1.1: FIGURE 1.1 ALL INDIA GENERATING INSTALLED CAPACITY .............3
FIGURE 1.2 : SOLAR ENERGY RADIATION MAP OF INDIA..... ....................................... 7
FIGURE 1.3 : SOLAR WATER PUMP.. ...................................................................................10
FIGURE2.1 : THE EIGHT MISSION OF NAPCC ................................................................22
FIGURE2.2 : FINANCING FRAMEWORK ..........................................................................29
FIGURE2.3 : RESEARCH METHODOLOGY ..................................................................... 31
FIGURE3.1 : LOCATION OF BUNDELKHAND ............................................................... 32
FIGURE3.2 : SOLAR – A SOLUTION TO THE WATER AND ELECTRICITY
PROBLEM IN BUNDELKHAND ........................................................................................ 36
FIGURE3.3 : WORKING OF PV CELL ............................................................................... 39
FIGURE3.4 : THE THREE TYPES OF PHOTOVOLTAIC CELLS ................................... 40
FIGURE3.5 : SOLAR V/S DIESEL....................................................................................... 47
FIGURE3.6 : DIAGRAMATIC REPRESENTATION OF SOALR PUMPING SYSTEM.48
FIGURE3.7 : SOLAR POWER WATER PUMP – KEY FEATURES ................................. 51
FIGURE3.8 : DUAL EXIS TRACKER STURCTURE ........................................................ 54
FIGURE3.9 : SNAP SHOT OF OUTPUT OF ONLINE MONITORING SYSTEM ........... 56
FIGURE4.1 : PAY-PER-USE MODEL ................................................................................. 60
FIGURE4.2 : SHARED CHANNEL MODEL ...................................................................... 62
FIGURE4.3 : DIRECT SALES MODEL ............................................................................... 64
vi
LIST OF TABLES
TABLE 2.1 : NSM TARGETS ........................................................................................... 25
TABLE 2.2 : ROLE OF IREDA IN JNNSM ...................................................................... 27
TABLE 2.3 : BENCHMARK COST & MAXIMUM GRANT BY MNRE ........................ 28
TABLE 2.4 : SUBSIDY UNDER THE “OFF GRID SCHEME” ....................................... 28
TABLE 3.1 : COMPONENTS OF SOLAR THERMAL SYSTEM .................................... 43
TABLE 3.2 : SOLAR THERMAL APPLICATIONS ......................................................... 43
vii
ABBREVIATIONS
BPL
Below Poverty Line
CDM
Clean Development Mechanism
CEA
Central Electricity Authority
GHG
Green House Gas
GW
Giga Watt
GOI
Government of India
IREDA
Indian renewable energy development agency
JNNSM
Jawaharlal Nehru National Solar Mission
MW
Mega Watt
MWh
Mega Watt Hour
MOP
Ministry Of Power
MU
Million Units
National Bank For Rural And Agricultural
NABARD Development
NAPCC
National Action Plan for Climate Change
NTPC
National Thermal Power Corporation
REC
Renewable Energy Certificates
RO
Renewable Obligation
ROC
Renewable Obligation Certificate
RPO
Renewable Purchase Obligation
viii
Table of Contents
DECLARATION……………………………………………………………………………………………………………………………. ........ i
CERTIFICATE ……………………………………………………………………………………………………………………………… ....... ii
ACKNOWLEDGEMENT………………………………………………………………………………………………………………. ....... iii
EXECUTIVE SUMMARY………………………………………………………………………………………………………………..... iv-v
LIST OF FIGURES………………………………………………………………………………………………………………………. ........ vi
LIST OF TABLES………………………………………………………………………………………………………………………… ....... vii
ABBREVIATIONS……………………………………………………………………………………………………………………. .......... vii
1
INTRODUCTION 1
1.1 Role of Energy in Indian Economy 1
1.2 Energy consumption in Agriculture sector 4
1.3 Solar Energy as an Alternative Source
6
1.3.1 Importance and relevance of Solar Energy for India 8
1.4 Problem Statement
10
1.5 Objective of the Report 10
1.6 Scope of the Report
10
1.7 Organizational Profile
11
1.7.1 About Claro Energy……………………………………………………………………………………………. 11
1.7.2 Claro’s Expertise…………………………………………………………………………………………………………. 11
1.7.3 Organization Structure…………………………………………………………………………………………………… 12
1.7.4 Claro's key Clients and Collaborations……………………………………………………………………………………
2
LITERATURE REVIEW, POLICY & RESEARCH METHODOLOGY 14
2.1
2.2
2.2.1
2.2.2
2.3
2.4
2.4.1
2.4.2
2.4.3
2.5
2.6
2.6.1
2.6.2
2.6.3
Literature Review 14
Policies, Regulations& Legal framework for solar Pumping
21
The National Action Plan on Climate Change (NAPCC) 21
Jawahar Lal Nehru National Solar Mission (JNNSM/NSM)
23
Promotional Schemes
26
Financing the solar system 26
Ministry of New and Renewable Energy (MNRE)
26
Indian Renewable Energy Development Agency Ltd. (IREDA) 27
National bank for rural and agricultural development(NABARD)
Subsidies
28
Research Methodology 30
Secondary Research
30
Primary Research:
30
Evaluation of Different Business Models:
30
3.
PROSPECTS FOR SOLAR PUMPING IN BUNDELKHAND REGION
3.1 About Bundelkhand
31
3.1.1 The Bundelkhand Region 33
ix
28
31
13
3.1.2
3.1.3
3.1.4
3.1.5
3.1.6
3.2
3.2.1
3.3
3.4
3.4.1
3.4.2
3.5
3.5.1
3.5.2
3.6
3.6.1
3.6.2
3.6.3
3.6.4
3.6.5
3.7
3.7.1
3.7.2
3.8
3.9
Topography and geology 33
Natural vegetation and soil
33
Climate 33
Population and human development
34
Water sources and availability
34
Agriculture in Bundelkhand
35
The Critical Conditions in the Region of Bundelkhand 35
Unavailability and erratic grid supply in Bundelkhand 35
Introduction to solar power in Bundelkhand 36
Solar On grid
38
Solar Off Grid
38
Solar Energy Technologies:
38
Photovoltaic cells (PV)
39
Solar Thermal
42
Solar Pumping 44
Introduction
44
Advantages
45
Limitations
45
Solar v/s Diesel 46
Understanding the system 47
Types of pumps 49
Centrifugal pump 49
Submersible pump
50
Choice of pump 50
Solar Pumping Model for the Project:
50
4. MARKET BASED BUSINESS MODELLING
57
4.1 Business Model 57
4.2 Importance of the business model 57
4.3 How the business model works
58
4.4 Possible business Models for solar water irrigation 59
4.4.1 Pay Per Use Model
60
4.4.2 Shared Channel Model
61
4.4.3 Direct Sales
63
4.4.4 Lease back model 64
4. 5 Financial Modelling of solar pump model for Bundelkhand
5.CONCLUSIONS ANDRECOMMENDATIONS
5.1 Conclusion
66
5.2 Recommendations
67
BIBLIOGRAPHY
66
78
x
65
1.INTRODUCTION
1.1 Role of Energy in Indian Economy
Consistent growth in India’s GDP since the introduction of the economic reforms program in the
1990s has made India one of the fastest growing major economies of the world. Within this
economic environment, India’s energy consumption growth has also recorded a significant increase.
India is a rapidly growing economy which needs energy to meet its growth objectives in a
sustainable manner.
Energy is needed for economic growth, for improving the quality of life and for increasing
opportunities for development. Some 600 million Indians do not have access to electricity
and about 700 million Indians use biomass as their primary energy resource for cooking.
Ensuring life line supply of clean energy to all is essential for nurturing inclusive growth,
meeting the millennium development goals and raising India’s human development index
that compares poorly with several countries that are currently below India’s level of
development. Energy not only provides light and access to modern electrical appliances but
as an effect can cause a huge effect on economic development, livelihoods, social dignity,
and environmental sustainability. The broad vision behind India’s integrated energy policy is
to reliably meet the demand for energy services of all sectors including the lifeline energy
needs of vulnerable households in all parts of the country with safe, clean and convenient
energy at the least-cost. This must be done in a technically efficient, economically viable and
environmentally sustainable manner using different fuels and forms of energy, both
conventional and non-conventional, as well as new and emerging energy sources to ensure
supply at all times with a prescribed confidence level considering that shocks and disruption
can be reasonably expected. In other words, the goal of the energy policy is to provide energy
security to all.
Although India is the fifth largest energy consumer in the world, the country’s per capita
energy consumption continues to be well below the world average and has significant
potential for growth. Coming out of the global economic crisis, India continues to grow at a
steady pace compared to several other economies around the world. Considering that the
economic growth is sustained for the next few years, the energy requirement for India is
pretty high.Re-affirming the view, that India remains a very attractive investment destination.
1
India’s growth story in the next few years will be driven by its growth in the energy and
infrastructure sectors.
Coal, which already provides a major portion of India’s power, is expected to remain the
dominant primary fuel. With India’s commitment to the world on its per capita carbon
emission targets and reducing carbon intensity by 20-25%, openings exist for renewable,
nuclear and gas power to increase their share in the fuel mix for the additional power
capacities.
India has over 24998.46 MW¹of installed renewable power generating capacity as on
31.07.2012. JNNSM targets total capacity of 20 GW grid-connected solar power by 2022.
Renewable energy technologies are being deployed at industrial facilities to provide
supplemental power from the grid, and over 70% of wind installations are used for this
purpose. Biofuels have not yet reached a significant scale in India. India’s Ministry of New
and Renewable Energy (MNRE) supports the further deployment of renewable technologies
through policy actions, capacity building, and oversight of their wind and solar research
institutes. The Indian Renewable Energy Development Agency (IREDA) provides financial
assistance for renewable projects with funding from the Indian government and international
organizations; they are also responsible for implementing many of the Indian government’s
renewable energy incentive policies. There are several additional Indian government bodies
with initiatives that extends into renewable energy, and there have been several major policy
actions in the last decade that have increased the viability of increased deployment of
renewable technologies in India, ranging from electricity sector reform to rural electrification
initiatives. Several incentive schemes are available for the various renewable technologies,
and these range from investment-oriented depreciation benefits to generationoriented
preferential tariffs. Many states are now establishing Renewable Purchase Obligations
(RPOs), which has stimulated development of a tradable Renewable Energy Certificate
(REC) program.
Though share of renewable energy is relatively smaller in the overall energy basket, it is set
to increase significantly in future. The major driving factors for promotion of renewable in
India includes India’s commitment to cut carbon intensity by 25% coupled with the need to
meet rising energy needs of vast population as well as to meet targeted growth of 9%. To
address these challenges, National Action Plan on Climate Change (NAPCC) was announced
2
on 30 June, 2008, which outlined strategies to increase the proportion of renewable energy
sources in fuel mix, promoting energy efficiency, conservation of national resources, and
increasing carbon sink.
Figure 1.1 All India Generating Installed Capacity²
Amongst all the renewable resources potential available within India, Solar has the maximum
potential; it is the least tapped despite having some of the more favorable conditions globally.
India has one of the world’s highest solar intensities in the world with annual solar yield of
1700 to 1900 kwh per kwpeak (Kwh/Kwp). This is equivalent to 5,550 trillion Wh energy
potential per year.
India also has a strategic and economic reason to focus on renewable energy, in particular
solar:
• En-cash upon the vast renewable resources including solar, hydro, wind and biomass
available within the country
• Address energy security – by reducing its dependence on imported feedstock
• Control rising carbon emission from new power generating capacities
• Utilize the opportunity to become a manufacturing and R&D hub for solar power globally
3
• Reduce capital cost of solar power.
However as the technologies for renewable energy are relatively more capital intensive
and still evolving, the sector is dependent on government support for capital expenditure or
supplement of revenue stream.
1.2 Energy consumption in Agriculture sector
The country inherited a stagnant agriculture at the time of Independence. The traditional
tools and implements relied mostly on human and animal power and used a negligible
amount of commercial energy. However, successive governments realized the importance
of agriculture and initiatives were taken for the growth of this sector. Increased investment
in irrigation infrastructure, expansion of credit, marketing, and processing facilities
therefore, led to a significant increase in the use of modern inputs. Joint effortsmade by the
government and private sector have led to steady increase in the level ofmechanization over
the years.
The face of Indian agriculture has been changing swiftly since the Green Revolution. Farmers
have started following intensive agriculture where assured irrigation becomes an essential
factor.The reliance on conventional irrigation sources such as tanks and canals has reduced,
while the importance of ground water has increased substantially.Given that rains are not
always timely and evenly distributed, farmers prefer pump sets asa more reliable and assured
source of irrigation; as a result, energization of pump setshave been increasing rapidly. With
rural electrification, the number of pumpsetsenergised in the country increased to about 18
million which accounted for over 90 per cent of India's total irrigation pumpsets as of January
2012.³However, owing to insufficient electricity supplies,some farmers have also procured
diesel pump sets as a standby. In the recent past,concerted efforts of the government has led
to an introduction of biomass and solarphotovoltaic based pumping systems .
Electricity consumption in agriculture sector has beenincreasing mainly because of greater
irrigation demand for new crop varieties andsubsidized electricity to this sector. Moreover,
due importance is not given to properselection, installation, operation, and maintenance of
pumping sets, as a result of whichthey do not operate at the desired level of efficiency,
leading to huge waste of energy. Agriculture (plantation/food) consumed 7 123 thousand
4
tonnes of HSD (high-speed diesel)in 2003/04, accounting for 19.2% of the total HSD
consumption during the year.Consumption of LDO (light diesel oil) and furnace oil for
plantation in 2003/04 was 44 000and 243 000 tonnes, respectively, accounting for 2.7% of
the total LDO and 2.9% of thetotal furnace oil consumed in the country. Consumption of
furnace oil for transport(agriculture retail trade) in the agriculture sector was 94 thousand
tonnes (Ministry ofPower and Natural Gas 2004). However, it is difficult to assess the total
dieselconsumption for agriculture from the available data.
The rapid expansion of energisation of pumpsets has significantly altered the irrigation
scenario. During the sixties, the share of ground water irrigation in India's total irrigated area
was only about 29 per cent, but it has increased to over 62 per cent today.
As electricity is essential to operate pumpsets, the consumption of electricity by the
agricultural sector has also risen sharply — from 833 Gwh in 1960-61 to 1,29,051Gwh in
2010-11, an increase of about 155 times. Today, the agricultural sector accounts for close to
20 per cent of India's total electricity consumption; it was only around 5 per cent during
1960-61.⁴
This sharp increase has occurred due to extensive use of ground water.Most crops, especially
during rabi and post-rabi (summer) seasons, are cultivated using primarily ground water.
It has been reported that farmers in Uttar Pradesh, Andhra Pradesh,Maharashtra and Tamil
Nadu don't even get six hours' continuous supply of electricity for irrigation pumpsets.
Heavily interrupted and limited supply of electricity poses great hardship to farmers who are
unable to supply irrigation water to the standing crops from their own wells.
Electrical energy shortage is a major problem the country faces today. An estimate by the
Central Electricity Authority (CEA) shows that the average shortage of power during the
period April 2011 to February 2012 was as high as 71,200 million units, which is about 8 per
cent less than the requirement.
The shortage of power supply is affecting the growth of agriculture, where electrical power is
used to operate pumpsets to lift water from wells and other sources for irrigation.
5
Reports from different parts of the country suggest that high-value crops such as sugarcane,
banana, cotton, paddy, etc, have dried up due to irregular supply of irrigation water as a result
of power shortage. How to protect the standing crops is the biggest question haunting farmers
today.
1.3 Solar Energy as an alternative source
India is endowed with vast solar energy potential. About 5,000 trillion kWh per year energy
is incident over India’s land area with most parts receiving 4-7 kWh per sq. m per day. Hence
both technology routes for conversion of solar radiation into heat and electricity, namely,
solar thermal and solar photovoltaics, can effectively be harnessed providing huge scalability
for solar in India. Solar also provides the ability to generate power on a distributed basis and
enables rapid capacity addition with short lead times.Off-grid decentralized and lowtemperature applications will be advantageous from a rural electrification perspective and
meeting other energy needs for power and heating and cooling in both rural and urban areas.
It is interesting to note that, even with tapping 1% of the land area at 10% efficiency factors it
is expected to generate around 54 billion Whrs of power per annum. The use of solar power
has attained momentum in India, and the installed capacity of grid-connected solar energy has
crossed 1 GW milestone as of July, 2012, according to Dr. Farooq Abdullah, Union Minister
of New and Renewable Energy (MNRE).
Informing RajyaSabha over the solar power progress in the country, Dr. Abdullah said that
the sector has witnessed an increase in the use of solar power with total grid-connected solar
energy reaching 1040.67 MW in July this year against a meager 2.5 MW in August 2011.⁵
Blessings of the Sun on India:
• Most of the country receives more than 4 kWh/m2 /day
• About 300 sunny days in the most part of the country
• Solar Thermal and Photo Voltaic, both can be harnessed
6
In order to leverage this key solar advantage, theJawaharLal Nehru National Solar Mission
(JNNSM) launched in January 2010 has set an aggressive target ofestablishing 20 million
square meter solar collector area creating 20 GW of solar power generation capacity by 2022.
To facilitate this process of enabling development of both capacity and generation as planned,
the Government of India is taking various steps which are positively directed with
articulating a Mission Statement followed up with a revamp of the Regulations focused at
increasing ‘serious’ participation in the sector.
Figure 1.2Solar energy radiation map of India
7
Though blessed with a large number of sunny days, the penetration of solar energy has been
limited in India. Rural households particularly present ideal conditions for the usage of
photovoltaic systems. Photovoltaic systems are portable, increasingly affordable and require
minimal maintenance. Aside from pollutants expelled during the manufacturing process,
photovoltaic systems did not create a waste stream. By converting a free and abundant source
of energy into direct current electricity, photovoltaic technologies may be used to power a
wide variety of appliances from basic lighting to refrigerators. Photovoltaic systems may be
installed by an individual household or may be linked together to form a grid with sufficient
energyproduction to power an entire community. Finally, when linked with appropriate
financing mechanisms, photovoltaic systems represent a cost-effective tool for securing
needed electrical capacity. Photovoltaic technologies hold great potential for extending
electrification into rural areas of developing countries. Certain projects in Africa, with the
help of Rural Energy foundation, were successful in setting up satellites that connected these
remote villages to the rest of the world. This connectivity not only helped the young to gain
knowledge from around the world, but also provided the rural community a feeling of
connectivity to the rest of the world.
1.3.1 Importance and relevance of solar energy for India:
1. Cost: Solar is currently high on absolute costs compared to other sources ofpower such as
coal. The objective of the Solar Mission is to createconditions, through rapid scale-up of
capacity and technological innovation todrive down costs towards grid parity. The Mission
anticipates achieving gridparity by 2022 and parity with coal-based thermal power by 2030,
butrecognizes that this cost trajectory will depend upon the scale of globaldeployment and
technology development and transfer. The cost projectionsvary – from 22% for every
doubling of capacity to a reduction of only 60% withglobal deployment increasing 16 times
the current level. The Missionrecognizes that there are a number of off-grid solar applications
particularlyfor meeting rural energy needs, which are already cost-effective and providesfor
their rapid expansion.
2. Scalability: India is endowed with vast solar energy potential. About 5,000trillion kWh
per year energy is incident over India’s land area with most partsreceiving 4-7 kWh per sq. m
per day. Hence both technology routes forconversion of solar radiation into heat and
electricity, namely, solar thermaland solar photovoltaics, can effectively be harnessed
providing hugescalability for solar in India. Solar also provides the ability to generate power
8
on a distributed basis and enables rapid capacity addition with short leadtimes. Off-grid
decentralized and low-temperature applications will beadvantageous from a rural
electrification perspective and meeting otherenergy needs for power and heating and cooling
in both rural and urbanareas. The constraint on scalability will be the availability of space,
since in allcurrent applications, solar power is space intensive. In addition, without
effective storage, solar power is characterized by a high degree of variability.In India, this
would be particularly true in the monsoon season.
3. Environmental impact: Solar energy is environmentally friendly as it haszero emissions
while generating electricity or heat.
4. Security of source: From an energy security perspective, solar is the mostsecure of all
sources, since it is abundantly available. Theoretically, a smallfraction of the total incident
solar energy (if captured effectively) can meet theentire country’s power requirements. It is
also clear that given the largeproportion of poor and energy un-served population in the
country, everyeffort needs to be made to exploit the relatively abundant sources of energy
available to thecountry. While, today, domestic coal based power generationis the cheapest
electricity source, future scenarios suggest that this could wellchange. Already, faced with
crippling electricity shortages, price of electricitytraded internally, touched Rs 7 per unit for
base loads and around Rs 8.50 perunit during peak periods. The situation will also change, as
the country movestowards imported coal to meet its energy demand. The price of power will
have to factor in the availability of coal in international markets and the cost ofdeveloping
import infrastructure. It is also evident that as the cost ofenvironmental degradation is
factored into the mining of coal, as it must, theprice of this raw material will increase. In the
situation of energy shortages,the country is increasing the use of diesel-based electricity,
which is bothexpensive – costs as high as Rs 15 per unit - and polluting. It is in this
situation the solar imperative is both urgent and feasible to enable the countryto meet longterm energy needs.
9
1.4 Problem Statement:
Agriculture represents around 15% of India’s GDP⁶. In the absence of adequate rainfall,
agricultural productivity largely depends on ground water irrigation. Electricity is required
for ground water irrigation that is done through tube-wells.Currently, grid power and diesel
power are the two major sources of electricity for irrigation in India. Grid connectivity is
unavailable in most of the rural areas, and this forces a farmer to rely on diesel power for
their irrigation needs. Diesel power is too expensive due to high diesel prices and the prices
are continuously rising. This situation is making tube-well operations not operational or very
expensive to run. In addition, diesel power adds to environmental pollution. In this report, we
study the solution to this problem with reference to the region of Bundelkhand.
1.5 Objective of the report:
Developing a Market based Business model for Solar Water irrigation in Bundelkhand
keeping in mind the unavailability of grid power and the high cost of diesel power. Solar
power is a viable alternative to operate tube-well pumps. The objective is to work out the
feasibility to assemble/retrofit irrigation pumps to run on solar.
1.6 Scope of the report:
The report scopeis to provide an optimal solution that is
offered to farmers of Bundelkhand to overcome the water
scarcity problem due to unavailability of grid supply . It
offers a solar powered pumping solution that is sustainable
and pollution free, and has less than five years of payback
period against diesel power.
Figure 1.3 Solar water Pump
10
1.7 Organization Profile:
1.7.1. About Claro Energy
Claro Energy was set up in January 2011.Claro Energy Pvt. Ltd. (‘Claro’) is India’s premier
innovative solar solutions company. It is focused on the solar Off-grid vertical with a special
emphasis on the Solar Water Pumping solutions and commercial/ residential rooftop
applications. It has forged alliances with globally renowned names across the solar value
chain. Claro’s main activities are conducting feasibility studies, designing the most robust
solar power systems, installation and execution of the projects and training the end user on
effective operation and maintenance techniques. The company believes in the effectiveness of
the simplicity of design and operation of our project.
Claro Energy offers off-grid solar power irrigation solutions to power-deficit regions in India
by sourcing proven, reliable and high quality solar PV technologies. In combination with
sales, marketing and business development competencies, Claro Energy has also developed
in-house integration and implementation expertise for off-grid solar solutions in India. Claro
Energy actively engages and partners with firms, domestic and international, for specialized
services, product development initiatives and financial investments.
Today, Claro Energy offers solar powered water pumping solutions to meet irrigation water
and drinking water needs of remote and rural parts of India. The company has several
installations in Bihar and is rapidly expanding.
Claro Energy uses solar energy to produce electric power at point of use. Power produced is
used to run irrigation pumps that provide water for agriculture. Claro Energy provides
immense benefit to rural farmers by increasing agriculture productivity of their land. By
providing both power and water, Claro Energy fulfills two basic infrastructure needs for
remote population.
1.7.2 Claro’s Expertise:
Claro is one of the key players in the domain of solar pumping. It is among the highest
installers of solar pumping systems in India with varying capacities of AC and DC pumps.
11
Claro offers its services as a turn-key project developer to clients. Claro sources proven,
reliable,and high quality solar technologies to design, engineer, procure, install, and
commission the solar power system. Claro collaborates with firms, domestic and international
for its EPC services and financial investment when required.
Claro is the leader in solar pumping domain in Bihar with over 90% market share. While the
competition is expected to pick up in near term, Claro hopes to enjoy its position in the
industry due to continuous improvisations in the solution as well as post sale services.
Currently, small players face lack of technological, operational, and business development
capabilities in the solar pumping space. Large players have not been able to focus on this
niche sector due to their other involvements. In spite of their technological and business
development capabilities, they lack last-mile connect on ground. This gives Claro significant
advantage over large players.
Claro’s technological, operational, and business development capabilities along with its lastmile connect on ground has motivated key large players to collaborate with us in some form.
Such a market dynamics will help Claro be ahead of the competition. At the same time,
Claro’s investment in innovations around solution improvisation and exploring different
types of business models will help achieve a new high in the marketplace.
1.7.3 Organization Structure
The management team brings diverse skills and experience. A common thread is a higher
degree of engineering capability. The education encompasses respected engineering
institutions such as IITs and MIT. Business education and training at Kellogg School of
Management and U C Berkeley's Haas School of Business provides a superior business
management acumen and expertise. The core team's operational and business experience
includes companies such as Punj Lloyd, Laresn& Toubro, and ICI in India, and Biogen Idec,
Genentech, Solyndra, Cadence and Magma Design Automation in USA. Claro Energy's
ability to put together a good management team is a decisive factor in its success.
12
1.7.4 Claro’s key Clients and Collaborations:
Dept. of Fisheries & Animal Husbandry, BiharMinor Irrigation Dept., Bihar
13
2.LITERATURE REVIEW, POLICY & RESEARCH METHODOLOGY
2.1 Literature Review
National Reviews:
Anil Kumar, A.K. Godara, Pardeep Kumar and Nasib Singh (2009,Hisar) conducted the
study titled” CONSTRAINTS FACED BY THE FARMERS’ IN THE USE OF
PHOTOVOLTAIC WATER PUMPING SYSTEM IN HARYANA“¹°in purposively
selected districts of Hisar, Rohtak and Jhajjar Haryana state involving 61, 47 and 33 numbers
of PWPS adopter farmers from each district, respectively along with an equal number of non
beneficiaries adjoining to the beneficiaries. The Technical Constraints reported by adopter
farmers were the technology work in less than 8 meters water table and it does not works in
cold / winter days. Similar results were also obtained in case of non adopter respondents.
“High cost of PWPS” was found to be the most serious financial constraint as observed by
both adopter and non adopter respondents. “Lack of extension literature” and “Lack of
package of practices for PWPS irrigation farming system” were considered to be the major
extension constraints among the adopter respondents. However, in case of non adopter
farmers, “Lack of attention of mass media” was found to be the most serious
extension constraint.
S. N. Singh, Snehlata Mishra &VandanaNehaTigga of the Department of Electronics and
Communication Engineering, NIT – Jamshedpur in their study titled “DESIGN AND
DEVELOPMENT OF UTILITY INTERFACE ADAPTIVE SOLAR POWER
CONVERTER FOR WATER PUMPING SYSTEM IN INDIAN VILLAGES “(2010)
presented development of a utility interface solar power converter to supplement deficit in
Grid power supply for a water pumping system used in rural home of Indian villages. The
power supply system comprises of solar (PV) array, PWM converter incorporating PWM
control strategy, energy storage battery devices, submersible pump and water storage tank(s)
etc. The model of the system has been designed for its optimal operation and a prototype
solar power converter unit has been developed to drive a ½ hp pump motor. The Life cycle
cost evaluation of the solar power converter has been done and compared with conventional
DG set. This has resulted in a cost effective system with a 60% - 70% grid power saving.
14
A. Mathew in his study MPPT based stand-alone water pumping system (2011,
Coimbatore, India) emphasized how Renewable energy sources are becoming a viable
substitute for conventional energy sources due to increases in world's energy demand and
scarce resources. Solar pump operated with AC drive offer better choice in terms of size,
ruggedness, efficiency and maintainability. In this work, dc power from solar panel is boosted
and fed to an inverter which gives ac output. Inverter drives the motor coupled to the water
pump. To get the maximum power available at any instant an MPPT controller is used to
control the converter. Of different types of MPPT algorithms artificial intelligence (AI)
techniques are popular. Artificial neural networks (ANNs) & fuzzy logic (FL) two different
types of AI techniques that are used to design the MPPT controller for PV system. In this
proposed work, depending on solar radiation and temperature, the MPPT controller gives
optimized duty cycle. Neural network and fuzzy logic are two MPPT controllers, simulated to
give optimum duty cycle. These MPPT controllers are compared based on the power obtained
from the boost converter. Simulation results are also presented.
SonaliGoel, PrajnasmitaMohapatra& R. K. Pati, School of Electrical Engineering, KIIT
University, Bhubaneswar, India in the study titled “ Solar Application for Transfer of
Technology A Case of Solar Pump” described howAgriculture requires energy as an
important input to production. Agriculture consumes about 35 per cent of the total
power generated through electrically operated pump sets. It is expected that about 30 per cent
of savings is possible through appropriate technology. Agriculture uses energy directly as
fuel or electricity to operate machinery and equipment, to heat or cool buildings, and for
lighting on the farm, and indirectly in the fertilizers and chemicals produced off the farm.
Agricultural technology is changing rapidly. Farm machinery, farm building and production
facilities are constantly being improved. Agricultural applications suitable for photovoltaic
(PV) solutions are numerous. These applications are a mix of individual installations and
systems installed by utility companies when they have found that a PV solution is the best
solution for remote agricultural need such as water pumping for crops or livestock. A solar
powered water pumping system is made up of two basic components. These are PV panels
and pumps. The smallest element of a PV panel is the solar cell. Each solar cell has two or
more specially prepared layers of semiconductor material that produce direct current (DC)
electricity when exposed to light. This DC current is collected by the wiring in the panel. It is
then supplied either to a DC pump, which in turn pumps water whenever the sun shines
,orstored in batteries for later use by the pump. The aim of this article is to explain how solar
15
powered water pumping system works and what the differences with the other energy sources
are.
The paper titled “RECENT DEVELOPMENT OF SOLAR PHOTOVOLTAIC
TECHNOLOGIES IN INDIA”⁸byS. M. Ali, ArjyadharaPradhan, SthitaPrajna Mishra
School of Electrical Engineering, KIIT University, Bhubaneswar presents an overview of
some solar photovoltaic grid-tied installations in India, and gives adescription of their
purpose and date of commencement, besides other data. A presentation of the India past and
present situations and the future prospects of solar photovoltaic is given. A brief comparison
between theperformances of existing grid-tied PV systems is made to demonstrate the good
potential of generatingelectricity from the sun, thus making photovoltaic a future contributor
to the energy mix in India. Finally, someproposals are presented, which could be used by
national legislative and statistical offices, in order to foster thewide-spread application of
solar photovoltaic in a professional and orderly manner.
International Reviews:
Matlin R.W. in the study titled“Photovoltaic-powered water pumps for third world
applications”(1980, USA) described how small photovoltaic water pumping systems are of
interest because they offer the potential of solving irrigation needs for millions of small farms
that do not have access to a utility grid and require much less power than that supplied by the
smallest Diesels. A unit was developed by the author to meet these needs. The technical
tradeoffs involved in its development are described. Several dozen of these units are currently
operating in Third World countries, with several hundred more due to be installed in fourteen
different developing countries by the fall of 1980.
In the study titled “Small solar pump for direct irrigation applications” (1982, United
States) by Chadwick, D.G.; Willardson, L.S., a prototype solar powered water pump is
described. The low-head vacuum lift pump uses a thermodynamic liquid to drive a floating
piston which alternately draws water into a pumping chamber then pushes it past a check
valve to a higher elevation. A discussion of typical crop requirements illustrates how this
pump might be used in practice.
16
The study titled “Performance of small progressive cavity pumps with solar power”
(1987) by Peter R. B. Ward, William G. Dunford, David L. Pulfrey described how a small
progressive cavity pump, rated at about 900 W, has been assembled and tested as part of a
photovoltaic-cell-powered water pumping system. Torque-speed relationships for the
progressive cavity pump, not readily available in published engineering journals, were
measured and are presented. The pump was extremely well suited to lifting groundwater for
small (domestic) supplies with solar power because it was capable of producing the full
design head over a very wide range of speeds. In addition, the progressive cavity pump was
robust, and unlike most other positive displacement pumps, would tolerate small
concentrations of silt and sand in the water without damage. Very many of these pumps are
already in use in parts of Africa and other developing areas, and excellent prospects exist for
operating progressive cavity pumps with solar-energy-powered drives.
Kagarakis,C.Aoutlined some of the main problems of design and assessment connected with
practical applications of photovoltaic generation and discussed major points of controversy
concerning such issues as comparisons between DC and AC systems and between centrifugal
and positive displacement pumps for water pumping units in the study titled “Assessment of
solar photovoltaic systems at the level of rural lectrification(1989)”. The advantages and
disadvantages of each approach are pointed out, and it is concluded that, in most cases, the
specific conditions and requirements must be carefully considered in order to reach the
optimum design of a photovoltaic system. The experience obtained from the operation of a
photovoltaic water pumping system on the island of Karpathos, Greece, is discussed.
Mueller, M.A. presented a study “Solar powered water pumps: problems, pitfalls and
potential”,(2002,UK) . For many years, solar (photovoltaic) powered water pumping has
been portrayed as being able to revolutionise water provision in rural and developing
communities. Mass produced pumps and cheaper PV panels have been promised, with the
possibility of bringing safe water to those people who currently lack this basic human right.
Although inroads have been made to reaching such an ideal situation, the current reality is
somewhat different. This paper considers the challenges faced by electronic and electrical
components in a solar powered water pumping system. It reviews how these problems have
been addressed historically, investigates the ways in which the solutions have failed and
explores novel ways of utilising modern electrical systems in order to allow full exploitation
of this potentially life-transforming technology
17
The report named “SOLAR POWERED WATER PUMPING SYSTEMS” by B. Eker
2005 discussed how Agricultural technology is changing rapidly. Farm machinery, farm
building and production facilities are constantly being improved. Agricultural applications
suitable for photovoltaic (PV) solutions are numerous. These applications are a mix of
individual installations and systems installed by utility companies when they have found that
a PV solution is the best solution for remote agricultural need such as water pumping for
crops or livestock. A solar powered water pumping system is made up of two basic
components. These are PV panels and pumps. The smallest element of a PV panel is the
solar cell. Each solar cell has two or more specially prepared layers of semiconductor
material that produce direct current (DC) electricity when exposed to light. This DC current
is collected by the wiring in the panel. It is then supplied either to a DC pump, which in turn
pumps water whenever the sun shines ,or stored in batteries for later use by the pump. The
aim of this article is to explain how solar powered water pumping system works and what the
differences with the other energy sources are.
Luis F. Beltrán-Morales, Dalia Bali Cohen, Enrique Troyo-Diéguez, GerzaínAvilésPolanco,
and Victor SevillaUnda concluded a study titled “Water Security in Rural Areas through
Solar Energy in Baja California Sur, Mexico” (2007).This study aims to assess the
potential of solar energy technology for improving access to water and hence the livelihood
strategies of rural communities in Baja California Sur, Mexico. It focuses on livestock
ranches and photovoltaic water-pumptechnology as well as other water extraction methods.
The methodology used are the Sustainable Livelihoods and the Appropriate Technology
approaches. A household survey was applied in June of 2006 to 32 ranches in the
municipality, of which 22 used PV pumps; and semi-structured interviews were conducted.
Findings indicate that solar pumps have in fact helped people improve their quality of life by
allowing them to pursue a different livelihood strategy and that improved access to water -not
necessarily as more water but as less effort to extract and collect it- does not automatically
imply overexploitation of the resource; consumption is based on basic needs as well as on
storage and pumping capacity.Justification for such systems lies in the avoidance of logistical
problems associated to fossil fuels, PV pumps proved to be the most beneficial when
substituting gasoline or diesel equipment but of dubious advantage if intended to replace
wind or gravity systems. Solar water pumping technology’s main obstacle to dissemination
are high investment and repairs costs and it is therefore not suitable for all cases even when
insolation rates and water availability are adequate. In cases where affordability is not an
18
obstacle it has become an important asset that contributes –by means of reduced expenses,
less effort and saved time- to the improvement of livestock, the main livelihood provider for
these ranches.
Kala Meah, Steven Fletcher and SadrulUla(2008) in their paper named “Solar photovoltaic
water pumping for remote locations” discussed how many parts of the world as well as the
western US are rural in nature and consequently do not have electrical distribution lines in
many parts of villages, farms, and ranches. Distribution line extension costs can run from
USD 10,000 to USD 16,000/km, thereby making availability of electricity to small water
pumping projects economically unattractive. But, ground water and sunlight are available,
which make solar photovoltaic (SPV) powered water pumping more cost effective in these
areas' small scale applications. Many western states including Wyoming are passing through
the sixth year of drought with the consequent shortages of water for many applications. The
Wyoming State Climatologist is predicting a possible 5-10 years of drought. Drought impacts
the surface water right away, while it takes much longer to impact the underground aquifers.
To mitigate the effect on the livestock and wildlife, Wyoming Governor Dave Freudenthal
initiated a solar water pumping initiative in cooperation with the University of Wyoming,
County Conservation Districts, Rural Electric Cooperatives, and ranching organizations.
Solar water pumping has several advantages over traditional systems; for example, diesel or
propane engines require not only expensive fuels, they also create noise and air pollution in
many remote pristine areas. Solar systems are environment friendly, low maintenance, and
have no fuel cost. In this paper the design, installation, site selection, and performance
monitoring of the solar system for small-scale remote water pumping will be presented. This
paper also presents technical, environmental, and economic benefits of the SPV water
pumping system compared to stand alone generator and electric utility.
J. S. Ramos and Helena M. Ramos in their paper titled “Solar powered pumps to supply
water for rural or isolated zones” (2009, Portugal)concluded their work which aimed at
studying the possible application of solar energy to deep well water pumps for water supply
in rural or isolated zones. Developing countries are composed of numerous small villages and
farmers, making it economically unviable to extend the electrical national grid to every
location where it is needed. Also the difficulty in collecting dues makes this solution even
less viable. These countries still struggle with the lack of water in many villages and farms.
These factors, along with the increase in the price of conventional energy sources and
19
concerns regarding sustainable growth, have led to the development of solar powered water
pumps. Most African, South Asian and Latin-American countries have good sun exposure
almost all year and many of its villages still have lack of water. For this study we considered
a small village composed of 10 families with a daily consumption of 100 l each, a well with a
depth of 100 m, a reservoir 10 m above ground level, an autonomy of 6 days and a permitted
loss of load of 2%. In this work a PV advanced model was used. For the conditions
mentioned, a water cost of 1.07 €/m3 and an investment cost of 3019 € were obtained. A
pump power of 154 W and a solar array of 195 Watt peak (Wp) are necessary. The water cost
obtained is believed to be a competitive value proving these types of solutions as good
alternatives to extending the electric grid or having a diesel generator connected to the pump.
Yingdong Yu, Jiahong Liu, Hao Wang, Miao Liu (2011, China)⁷, in the paper titled ‘Assess
the potential of solar irrigation systems for sustaining pasture lands in arid regions – A
case study in Northwestern China’discussed using the solar irrigation systems as an
effective way for sustaining pasture lands in arid regions following the combined impact of
global climate change and increasing human activities that has led to the severe deterioration
of grasslands in China. A solar irrigation system is the device that uses the solar cell from the
sun’s radiation to generate electricity for driving the pump. And photovoltaic pump consists
of an array of photovoltaic cells and pumps water from a well or reservoir for irrigation.
Although ecologists and organizations constantly work and find ways to conserve grasslands
through irrigation systems that use solar energy, issues on water resources are not yet
thoroughly discussed. This paper takes into account the main factors in the study of water
resources, including precipitation and groundwater, to analyze the feasibility of using a
photovoltaic (PV) pumping irrigation. The appropriate area for such a PV pumping irrigation
in Qinghai Province is also presented. The results show that the grasslands appropriate for PV
pumping cover about 8.145 million ha, accounting for 22.3% of the grasslands in the entire
province. Finally, the problems and countermeasures of PV pumping irrigation, including the
impact on regional water balance, groundwater level and highland permafrost, are also
considered.
A.Shafie and M.A.B. Abdelaziz (2011, Malaysia) in their paper named “Photovoltaic based
irrigation system software”⁹ discussed the use of photovoltaic as a power source for water
pumping activities which is one of the promising area in photovoltaic
application.Photovoltaic is a technology in which solar radiation is converted into electrical
20
power,that is, direct current. The objective of this study is to to develop a software that can be
used as guidelines for developing suitable photovoltaivbesed irrigation system. The study
presents the design and technical requirements of a photovoltaic powered water pumping
system for irrigation. The design is based on the estimation of water requirement, pumping
system selection and sizing, photovoltaic array sizing, load matching design, along with
metrological data of site location. Java language was employed in the development of the
software.
M.Abu-Aligah in his journal “Design of Photovoltaic Water Pumping System and
Compare it with Diesel Powered Pump” (2011, Jordan) described how in locations where
electricity is unavailable, other means are necessary to pump water for consumption. One
option is a photovoltaic (PV) pumping system. Advantages of PV pumping systems include
low operating cost, unattended operation, low maintenance, easy installation, and long life.
These are all important in remote locations where electricity may be unavailable.
So far, in the development of this research, the focus has been to estimate the available
radiation at a particular location on the earth’s surface and then analyzed the characteristics of
a photovoltaic generator and a photovoltaic network. The purpose of this research is to
examine all the necessary steps and key components needed to design and build a pump using
photovoltaic system.
2.2 Policies, RegulationsandLegal Framework for Solar Pumping
2.2.1 The National Action plan on Climate Change (NAPCC)¹¹:
The much awaited The National Action plan on Climate Change (NAPCC) was released
on 30th June, 2008 to state India’s contribution towards combating climate change. The plan
outlines Eight National Missions running through 2017. The Ministries involved submitted
detailed plans to the Prime Minister's Council on Climate Change in December 2008.
The NAPCC consists of several targets on climate change issues and addresses the urgent and
critical concerns of the country through a directional shift in the development pathway. It
outlines measures on climate change related adaptation and mitigation while simultaneously
advancing development. The Missions form the core of the Plan, representing multi-pronged,
long termed and integrated strategies for achieving goals in the context of climate change.
21
National Mission
for Strategic
Knowledge for
Climate Change
National Mission
for Sustainable
Agriculture
National Mission
for a Green
India
National Mission
for Enhanced
Energy Efficiency
(NMEEE)
National Mission
for Enhanced
Energy Efficiency
(NMEEE)
NAPCC
(National Action
Plan for Climate
Change)
National Mission
for Sustaining
the Himalayan
Ecosystem
National Mission
on Sustainable
Habitat
National Water
Mission
Figure 2.1: The Eight Missions of NAPCC
The National Action Plan on Climate Change also points out: “India is a tropicalcountry,
where sunshine is available for longer hours per day and in great intensity.Solar energy,
therefore, has great potential as future energy source. It also has theadvantage of permitting
the decentralized distribution of energy, thereby empoweringpeople at the grassroots level”.
Based on this vision a National Solar Mission is being launched under the brandname “Solar
India”.
22
2.2.2 Jawaharlal Nehru National Solar Mission (JNNSM/NSM)¹²
The Jawaharlal Nehru National Solar Mission was launched on the 11th January, 2010 by the
Prime Minister. The Mission has set the ambitious target of deploying 20,000 MW of grid
connected solar power by 2022 is aimed at reducing the cost of solar power generation in the
country through
(i)
Long Term Policy;
(ii)
Large Scale Deployment Goals;
(iii)
Aggressive R&D; and
(iv)
Domestic production of critical raw materials, components and products, as a
result to achieve grid tariff parity by 2022.
The Mission creates an enabling policy framework to achieve this objective and make
India a global leader in solar energy.
The National Solar Mission is a major initiative of the Government of India and State
Governments to promote ecologically sustainable growth while addressing India’senergy
security challenge. It also constitutes a major contribution by India to theglobal effort to meet
the challenges of climate change.
Ambitious targets of National Solar Mission
The objective of the National Solar Mission is to establish India as a global leader insolar
energy, by creating the policy conditions for its diffusion across the country asquickly as
possible.
The Mission will adopt a 3-phase approach, spanning the remaining period of the11th Plan
and first year of the 12th Plan (up to 2012-13) as Phase 1, the remaining 4years of the 12th
Plan (2013-17) as Phase 2 and the 13th Plan (2017-22) as Phase 3.
At the end of each plan, and mid-term during the 12th and 13th Plans, there will be
anevaluation of progress, review of capacity and targets for subsequent phases, basedon
emerging cost and technology trends, both domestic and global. The aim wouldbe to protect
Government from subsidy exposure in case expected cost reductiondoes not materialize or is
more rapid than expected.
23
The immediate aim of the Mission is to focus on setting up an enabling environmentfor solar
technology penetration in the country both at a centralized anddecentralized level. The first
phase (up to 2013) will focus on capturing of the lowhangingoptions in solar thermal; on
promoting off-grid systems to serve populationswithout access to commercial energy and
modest capacity addition in grid-basedsystems. In the second phase, after taking into account
the experience of the initialyears, capacity will be aggressively ramped up to create
conditions for up scaled andcompetitive solar energy penetration in the country.
To achieve this, the Mission targets are:
· To create an enabling policy framework for the deployment of 20,000 MWof solar power
by 2022.
· To ramp up capacity of grid-connected solar power generation to 1000 MWwithin three
years – by 2013; an additional 3000 MW by 2017 through themandatory use of the renewable
purchase obligation by utilities backed with apreferential tariff. This capacity can be more
than doubled – reaching10,000MW installed power by 2017 or more, based on the enhanced
andenabled international finance and technology transfer. The ambitious target
for 2022 of 20,000 MW or more, will be dependent on the ‘learning’ of the firsttwo phases,
which if successful, could lead to conditions of grid-competitivesolar power. The transition
could be appropriately up scaled, based onavailability of international finance and
technology.
· To create favourable conditions for solar manufacturing capability, particularlysolar thermal
for indigenous production and market leadership.
· To promote programmes for off grid applications, reaching 1000 MW by 2017 and 2000
MW by 2022 .
· To achieve 15 million sq. meters solar thermal collector area by 2017 and 20million by
2022.
· To deploy 20 million solar lighting systems for rural areas by 2022.
24
Phase – I
Phase-II
Phase- III
2010-13
2013-17
2017-22
Utility grid power
1,000-2000 MW
4000-10,000 MW
20,000 MW
Off- grid Applications
200 MW
1,000 MW
2,000 MW
Solar Thermal Collectors Area
7 million Sqm
15 million Sqm
20 million Sqm
Application Segment
Table 2.1: NSM targets
The mission seeks to kick-start solar generation capacities, drive down costs through local
manufacturing, and boost research & development (R&D) in order to accelerate the transition
to clean and secure energy.

The key driver promoting solar power projects has been the solar-specific RPOs. As
per the solar mission, the solar power purchase obligation for states may start with
0.25% in Phase I and go up to 3% by 2022. Developers will have the option of
participating in the solar-specific REC mechanism or availing benefits from the feedin tariff. The RECs will also allow states with relatively poor solar resources to meet
their RPO commitments. Several estimates have been made on solar power potential,
and most of them have identified the feasible solar power potential in India to be more
than 100,000 MW. This potential coupled with the thrust from the government to
develop solar power, has made investments in solar power very attractive to solar
developers.

India's geographical location coupled with various schemes and incentives announced
by the government is aimed at accelerating the growth momentum of the Indian solar
power Industry from both capacity and generation perspective. The Government of
India (GoI) has initiated many schemes such as providing subsidy, tax holiday and
accelerated depreciation for power producers, concessional duty on the imports of raw
material, soft loan, elimination of excise duty on specific devices/systems,etc. to
increase the production as well as use of solar energy in the country.
25
2.3 Promotional Schemes
The Task Force on Micro-irrigation (TFMI), appointed by the Ministry of Finance during
2004 has also underlined the fact that drip irrigation can save enormous amount of electricity,
if adopted extensively.
The Central and State governments have introduced promotional schemes since 1990-91
which offer over 50 per cent of subsidy on the capital cost of drip set to farmers.
Recently, the Government of Tamil Nadu also announced a scheme to promote the adoption
of drip irrigation in the State with over 75 per cent of subsidy for marginal and small farmers.
Though the benefits are large, the adoption of drip method of irrigation has not been very
appreciable. As of today, only about two million hectares of area has been brought under drip
irrigation, which is only about 7 per cent of its total potential of 27 million hectares estimated
by the TFMI.
Besides saving electricity, drip method of irrigation can solve the problem of water scarcity.
Given the looming demand-supply gap in electricity, there will be no respite from electricity
shortage in the immediate future. Therefore, concentrated efforts are needed to persuade
farmers to adopt drip method of irrigation.
2.4 Financing the solar system
The most important factor that is holding back solar technology is its high initial cost,
especially when compared to highly subsidised grid electricity. To change this situation,
some form of support is necessary to encourage this technology.Fortunately, the Government
of India has taken many steps to reduce the end price of various renewable energy
technologies, including solar. Indian Renewable Energy Development Agency (IREDA)
and Ministry of New and Renewable Energy (MNRE) are the responsible agencies for this
purpose.
2.4.1 Ministry of New and Renewable Energy (MNRE)
The Ministry of New and Renewable Energy covers the entire renewable energy sector,
namely Solar, Wind, Hydro, Biomass, Geothermal and Tidal Energy sources. The function of
the Ministry is to promote the renewable energy sector in India. The other prime functions of
the Ministry include research & development of various renewable sources of energy as well
as the promotion and subsidy programmes related to them.
26
2.4.2 Indian Renewable Energy Development Agency Ltd. (IREDA)
IREDA is a Public Limited Government Company established in 1987, under the
administrative control of MNES, to promote, develop and extend financial assistance
forrenewable energy and energy efficiency/conservation projects. IREDA has evolved into a
good, active, financially sound and innovative Financial Development Agency for the Indian
renewable energy sector.
Type of system
Role of IREDA
Grid connected power projects
•
Financing of Projects
Small solar power projects and roof
•
Financing of Projects
•
Generation Based Incentive
•
Monitoring
•
Soft loans through banks by re-financing
•
Monitoring of the systems
•
Administration of Interest subsidy
top systems
Off- grid applications
Solar thermal sector- SWHS
scheme through banks / financial institutions
Solar Manufacturing
•
Funding of projects
•
Funding through intermediaries
•
Soft loans
•
Working capital
•
Re-financing facility as per MNRE
Table 2.2 Role of IREDA in JNNSM
27
2.4.3 National bank for rural and agricultural development(NABARD)
NABARDis set up as an apex Development Bank with a mandate for facilitating credit flow
for promotion and development of agriculture, small-scale industries, cottage and village
industries, handicrafts and other rural crafts. It also has the mandate to support all other allied
economic activities in rural areas, promote integrated and sustainable rural development and
secure prosperity of rural areas. In discharging its role as a facilitator for rural prosperity
NABARD is entrusted with
1.
Providing refinance to lending institutions in rural areas
2.
Bringing about or promoting institutional development and
3.
Evaluating, monitoring and inspecting the client banks
2.5 Subsidies¹³:
For Phase 1 of the NSM the Government of India launched the “Off-grid Scheme“with an
allocated fund of INR 2,510 million ($ 62.75 million) for off-grid applications.This subsidy
scheme comprises of two components:
1. A grant of 30% of the benchmark capital cost
2. A soft loan on 50% of the benchmark capital cost with an interest rate of 5% p.a.
This benchmark cost is defined annually by the government. The benchmark cost for off-grid
PV plants with and without storage system for the financial year 2012/13 is displayed in table
2.3. Depending on the category shown in Table 2.4, to which a specific project belongs to,
one or both subsidy components can be applied.
PV System
With Storage
Benchmark cost
2010/11
Max. Subsidy (~30%)
300 INR/Wp, 7,5 $/Wp
90 INR/Wp, 2.25 $/Wp
210 INR/Wp, 5.25 $/Wp
70 INR/Wp, 1.75 $/Wp
Without
Storage
Table 2.3: Benchmark cost and maximum grant by MNRE
28
No. Application
1∙
Size of System
30% capital subsidy
≤1 kWp
plus soft loan (5%
Pumps for irrigation and
1.B community drinking water
≤ 5 kWp
p.a.)
≤ 100 kWp per site
30% capital subsidy
Non-commercial entities
2.A All applications except 2.B
plus soft loan (5%
Mini-grids for rural
≤250 kWp per site
2.B electrification
3∙
Components
Individuals
1.A All applications except 1.B
2∙
Applicable
p.a.)
Industrial/Commercial entities
3.A All applications except 3.B
≤ 100 kWp per site
or soft loan (5%
Mini-grids for rural
3.B electrification
30% capital subsidy
≤ 250 kWp per site
p.a.)
Table 2.4: Subsidy under the “Off-grid Scheme”
Off-grid systems, which are imported completely, are not eligible to the funding. System
components have to meet the IEC standards or BIS equivalents given in Annexure 3 of the
Off-grid Scheme.
29
2.6 Research Methodology
2.6.1 Secondary Research

Decoded NSM, did a detailed analysis of JNNSM by studying its policies to
understand the policy framework and to evaluate the various provisions for solar
water pumping in India.

Understood the role of MNRE, IREDA, NABARD for financing the solar pumping
project and to understand the mechanism to avail subsidy.

Studied the economic conditions, agricultural practices, topology, soil structure, water
resources and water level in the region of Bundelkhand.
2.6.2 Primary Research:

Contacted people from MNRE, IREDA and NABARD to get a better understanding
of the policies and mechanism to avail subsidy and soft loan.

Visited fields in bundelkhand (Jhansi and adjoining areas) to get primary data related
to:
o Water head (10-100mts)
o Soil type (red soil)
o Agricultural Practices ( two crops/year)
o Water availability details
o Grid supply pattern(4-6hrs/day)

These details helped us to customize the solar water pumping system for the specific
locations.
Did comparative analysis of Primary and secondary data.
2.6.3 Evaluation of Different Business Models:
The following models were taken into consideration:

Pay-per-use model.
30

Lease back model.

Shared channel model.

Direct sale model.
After evaluating the various models pay-per-use modelwas found to be most viable and
therefore was selected during the implementation stage.
Figure 2.3 Research Methodology
3. PROSPECTS FOR SOLAR PUMPING IN BUNDELKHAND REGION
3.1 About Bundelkhand:
Often called as the heartland of India, the Bundelkhand Region of central India has always
commanded an eminent place all through the Indian history. All along its length and breadth,
Bundelkhand is richly studded with religious centres, historical sites, monuments, forts etc. It
boasts of a vividly dynamic, rich and colourful cultural fabric manifested by a spectacular
diversity in folk dances, music, songs, art, architecture and, of course, the fairs and festivals.
31
Bundelkhand lies between the Indo-Gangetic Plain to the north and the Vindhya Range to the
south. It is a gently sloping upland, distinguished by barren hilly terrain with sparse
vegetation, although it was historically forested. The plains of Bundelkhand are intersected
by three mountain ranges, the Vindhya, Fauna and Bander chains, the highest elevation not
exceeding 600 meters above sea-level. Beyond these ranges the country is further diversified
by isolated hills rising abruptly from a common level, and presenting from their steep and
nearly inaccessible scarps eligible sites for forts and strongholds of local kings. The general
slope of the country is towards the northeast, as indicated by the course of the rivers which
traverse or bound the territory, and finally discharge themselves into the Yamuna River.
Figure 3.1 Location of Bundelkhand
The principal rivers are the Sindh, Betwa, Shahzad River, Ken, Bagahin, Tons, Pahuj, Dhasan
and Chambal. The Kali Sindh, rising in Malwa, marks the western frontier of Bundelkhand.
Parallel to this river, but further east, is the course of the Betwa. Still farther to the east flows
the Ken, followed in succession by the Bagahin and Tons. The Yamuna and the Ken are the
only two navigable rivers. Notwithstanding the large number of streams, the depression of
their channels and height of their banks render them for the most part unsuitable for the
purposes of irrigation, which is conducted by means of ponds and tanks. These artificial lakes
are usually formed by throwing embankments across the lower extremities of valleys, and
thus arresting and impounding the waters flowing through them.
32
3.1.1 The Bundelkhand Region
Administratively, the region comprises 13 contiguous districts, viz. Jhansi, Lalitpur, Jalaun,
Hamirpur, Banda, Mahoba and Chitrakoot in Uttar Pradesh, and Sagar, Chattarpur,
Tikamgarh, Panna, Damohand Datia in Madhya Pradesh. Apart from its rich cultural heritage
the region is also known for its socio-economic backwardness. Most of the districts of the
region have been identified as poorest districts of the country by the Planning Commission of
the Govt. of India.
3.1.2 Topography and geology
Bundelkhand is an old landmass composed of horizontal rockbeds resting on a stable
foundation. The landscape is rugged, featuring undulating terrain with low rocky outcrops,
narrow valleys, and plains. Surface rocks are predominantly granite of the Lower Pre
Cambrian/Archaen period. Some Dharwarian and Vindhayan rocks present in the region
contain minerals of economic value. Sandstone, shales and limestone of high quality, along
with Dyhes, Sills and the famous pink Archaean gneiss rocks, are also found in places.
3.1.3 Natural vegetation and soil
The Bundelkhand region was densely forested until the late 18th century. After the turn of the
century, rising demands for wood and agricultural expansion led to increasing levels of
deforestation. Post independence population growth and the emergence of the green
revolution brought even larger tracts of land under the plough and further increased woodbased energy needs. These factors, combined with poor land management and ruthless
government approved commercial logging, have drastically reduced forested area in the
region. Today, only small patches of dry miscellaneous and thorn forests comprised of dhak,
teak, mahuachiranji, khardai, dhau, khair, thar trees remain. Vegetation primarily consists of
scrub forest (siari, katai, gunj, bel, ghout trees) and scrub brush, much of it open canopy with
large tracts of land classified as "wastelands." Prevailing soil types are a mix of black and
red; the latter being relatively recently formed, gravely and shallow in depth, and thus unable
to retain moisture well. Much of the region suffers from acute ecological degradation due to
top soil erosion and deforestation, leading to low productivity of the land. Soil erosion is a
persistent problem that is aggravated by the hilly landscape, high winds and the poor quality
of the soils, leading to the widespread growth of gullies.
33
3.1.4 Climate
The Bundelkhand Region is marked by extremes of temperature, reaching the mid to upper
40s centigrade during the summer months and dropping as low as 1 degree centigrade in
winter. During the summer season, high temperatures in the plain cause low pressure areas
that induce movement of the monsoon. The temperature begins to rise in February and peaks
in May-June. Hot breezes known locally as loo are common during this period.
The rainfall distribution pattern is irregular, with approximately 90% of all rainfall in the
region caused by the monsoon, falling from June to October. Average rainfall per year is 800900mm but most is lost to runoff. July and August are the months of maximum rainfall, while
November and April are the driest months of the year. The scant winter rainfall is useful for
the cultivation of ‘rabi’ crops, but it is usually inadequate without access to supplementary
irrigation sources.
3.1.5 Population and human development
The Bundelkhand region is characterized by some of the lowest levels of per capita income
and human development in the country. Literacy levels are poor, especially among women,
and infant mortality is relatively high. Local inhabitants rely primarily on subsistence rainfed
single crop agriculture and small-scale livestock production for their livelihood, with wheat,
grams and oil seeds the predominant crops. Population density in the region largely correlates
with such factors as soil types, natural vegetation, industrialization, and urbanization. In rural
areas, rising population has led to fragmentation of family land holdings. Human pressures on
the existing natural resource base are compounded by livestock pressures: the human to cattle
(or livestock) ratio is relatively high, almost 1:1, compared with a national ratio of 1:.45.. In
addition, the growth of private land ownership and past environmental mismanagement of
lands have led to the rapid decline of forest cover, reducing traditional sources of fuel, fodder
and food. These factors, combined with limited rainfall and fresh water resources, have
resulted in low agricultural productivity. Many families are no longer able to meet their
subsistence needs. Temporary and long-term out-migration of males from rural villages in
search of alternative sources of livelihood has become increasingly common.
3.1.6 Water sources and availability
Water sources are varied and often seasonal, ranging from ponds, tanks, lakes and streams to
open wells, bore wells and irrigation canals radiating out from large-scale dams. Most
34
agriculture is single-crop rainfed with supplementary water from private open irrigation
wells. Thus, large numbers of farmers are highly dependent on the monsoon rains to recharge
these wells.
3.2 Agriculture in Bundelkhand
Agriculture in Bundelkhand is vastly rain-dependent, diverse, complex, under-invested, risky
and vulnerable. In addition, extreme weather conditions, like droughts, short-term rain and
flooding in fields add to the uncertainties and seasonal migrations.
3.2.1 The Critical Conditions in the Region of Bundelkhand
The scarcity of water in the semi-arid region, with poor soil and low productivity further
aggravates the problem of food security. With a population of approximately 21 million in
Bundelkhand, 82.32 per cent is rural and more than one third of the households in these areas
are considered to be Below the Poverty Line (BPL).
The poverty situation in the region has also become extremely critical in the recent years.
This is because of lack of employment and lack of opportunities. The insecurity of
livelihoods and lack of supportive governance have led to forced large-scale migration of the
local population. Further, climatic uncertainties, leading to extended and frequent spells of
drought and drastically reduced agricultural yields, have also aggravated the problem.
3.3 Unavailability and erratic grid supply in Bundelkhand
The Power supply in most of the regions of Bundelkhand is erratic and uncertain. Most of the
rural regions are still not connected to the grid, and even those connected get a supply of 4-6
hours a day. In such a scenario, diesel pumps turn out to be an option but not a feasible one
due to the high cost operating and maintenance cost involved.Mini grid or off-grid solutions
thus are the need of the hour.
35
Severe power shortage is paralyzing the farmers in Bundelkhand
NO Electricity, NO Water, NO Crops!
CROP IRRIGATION
IS SUFFERING





Food scarcity &
famine
Inflation
Migration from
villages
Poor becoming
poorer
Strikes &protests

Unavailable

Intermittent

Infrastructure
dependent
SOLAR
POWER
DIESEL
POWER
GRID POWER

High running
cost

Inconvenient

Polluting
Peak Power Deficit (%), 2011–12

Convenient

Reliable

Stand-alone

Renewable

No
operating
cost
Solar
irrigationPump
Solar pumps provide electricity and irrigation water in a non disruptive way
Figure 3.2 Solar- A solution to the water and electricity problem in Bundelkhand
3.4 Introduction to solar power in Bundelkhand
From time immemorial, the sun has been the prime source of energy for all life on earth.The
solar energy was being used directly for purposes like drying clothes, curing agricultural
produce, preserving food articles, etc. Even today, the energy we derive from fuel-wood,
petroleum, paraffin, hydroelectricity and even our food originates indirectly from the sun.
Solar energy is virtually inexhaustible. The total energy we receive from the sun farexceeds
our energy demands. It is probably the most reliable form of energy availableeverywhere and
36
to everyone, unlike other sources. With dwindling supplies of petroleum,gas and coal,tapping
solar energy is a logical and necessary course of action.
Solar Power
Put most simply, Solar Power is a way of converting sunlight into a useful energy source.
There are two ways of using solar energy; as heat and as electricity. Devices like solar water
heaters, driers and solar cookers use the heat to produce hot water, to dry grains or to cook
food respectively. This way of using solar energy is called solar thermal. On the other hand,
solar panels use the light to produce electricity, which can then be used for multitude of
purposes.
Here are the main advantages of solar energy.

One of the cleanest forms of energy.

Easy to install, operate and maintain.

Long life: Solar panels can last up to 20 years or more.

Modular design, hence easy to expand.

Ideal for remote areas, where electricity is not reliable and diesel is difficult to obtain.

Safe to handle. Once installed properly, most devices can be used by laymen without
risk.

Freedom from grid, which is often unreliable especially in remote areas.

Can be used as stand alone or grid connected systems as well as with other
energysources as hybrid systems.

Solar energy, radiant light and heat from the sun, has been harnessed by humans
since ancient times using a range of ever-evolving technologies. Solar energy
technologies include solar heating, solar photovoltaics, solar thermal
electricity and solar architecture, which can make considerable contributions to
solving some of the most urgent problems the world now faces.
37
3.4.1 Solar On grid
An on grid solar electric, or photovoltaic, system feeds electricity directly into the grid,
offsetting the amount of electricity supplied by the grid. If the amount of electricity produced
by the system is greater than the amount being used by the business or residence, the excess
is fed into the grid resulting in the account being credited by the amount fed in, causing the
grid to act as a sort of electrical bank.
Conversely, when the photovoltaic (PV) system is producing less electricity than the
consumer is using (such as at nighttime), the grid makes up the shortfall, debiting the
consumer's account.
The benefit of an on grid system is that the consumer will reduce their electricity bill while
still having the grid as a backup supply. Of course, in the event of a blackout, unless the
consumer has a battery bank to use as a backup supply, they'll be left without power if the PV
system isn't producing any.
This is generally the cheapest type of system to install, unless a battery bank is included as
part of the system.
3.4.2 Solar Off Grid
An off grid system has no connection to the grid whatsoever and must rely on a PV system
for its electricity supply, and, since there is no grid to fall back on at nighttime or when the
solar panels aren't producing sufficient power to supply the consumer's needs, a battery bank
is used to store excess power for later use when the supply from the solar panels is
insufficient.
For this reason, an off grid system tends to be more expensive simply due to the amount of
equipment needed to build such a system. In addition, most off grid users also use a backup
generator in case of emergency, adding further to the cost of an off-grid system.
3.5 Solar Energy Technologies:
Solar energy, radiant light and heat from the sun, has been harnessed by humans since ancient
times using a range of ever-evolving technologies. Solar energy technologies include solar
38
heating, solar photovoltaics, solar thermal electricity and solar architecture, which can make
considerable contributions to solving some of the most urgent problems the world now faces.
3.5.1 Photovoltaic cells (PV)
Photovoltaic cells are devices which ‘collect’ the light and convert it into electricity. The
cells are wired in series, sealed between sheets of glass or plastic, and supported inside a
metal frame. These frames are called solar modules or panels. They are used to power a
variety of applications ranging from calculators and wrist-watches to complete home systems
and large power plants.
PV cells are made of thin silicon wafers; a semi-conducting material similar to that used in
computer chips. When sunlight is absorbed by these materials, the solar energy knocks
electrons loose from their atoms, allowing the electrons to flow through the material to
produce electricity. This process of converting light (photons) to electricity (voltage) is called
the “photovoltaic effect”.
Figure 3.3 Working of PV cell
Types of Solar PV:
Two primary types of PV technologies available commercially are crystalline silicon and thin
film.
39
Monocrystalline
Polycrystalline
Amorphous
Figure 3.4 The three types of photovoltaic cells
Crystalline
Crystalline technologies are currently predominant in the market. There are two types of
crystalline technologies, monocrystalline and polycrystalline. Monocrystalline cells are cut
from large single crystals or from cylindrical blocks (ingots) of crystalline silicon. They are
more efficient (12-16%) but more costly. The polycrystalline cells, as the name suggests, are
produced from square blocks (cast ingots) of polycrystalline silicon. They have slightly lower
efficiency (11-13%), but are less costly.
Thin film
In thin film PV technologies, the PV material is deposited on glass or thin metal that
mechanically supports the cell or module. Thin film based modules are produced in sheets
that are sized for specified electrical outputs. They are much less efficient (5-8%) and
therefore take larger area. However, they are much cheaper than crystalline modules.These
modules degrade over time, and sometimes may lose about 20% of their production capacity.
Note: It must be noted that lower efficiency of thin film technology does not mean lower
performance. It only means that it needs a larger area for producing the same amount of
electricity as compared to crystalline technologies.
Common terms:
Solar Insolation: the amount of sunlight falling on the surface of the earth on a specified area
in a given period of time. It is measured in kilowatt hours per square metre per day
(KWh/m/day).
40
Watt: the unit of measuring the power i.e. the rate at which energy is supplied.
Watt peak (Wp): measures the capacity of the panel. It is the maximum amount of power the
solar panel can produce under standard test conditions. It is called the rated power of the solar
panel. Peak sunshine hours: the equivalent number of hours each day when the intensity
ofsunshine over one square meter is enough theoretically to produce 1000 watts ofenergy. For
India, the average is 5.5 hrs.
PV cell performance:
The performance of a PV cell is measured in terms of its efficiency at turning sunlight into
electricity. Only sunlight of certain energies will work efficiently to create electricity, and
most of it is reflected or absorbed by the material that makes up the cell. Because of this, a
typical commercial PV cell has an efficiency of 10-16%. This means that about one-eighth of
the sunlight striking the cell generates electricity.
Solar panels work on light, not heat. So, as long as there is some light, even if it’s cloudy, the
cells continue producing a certain amount of electricity. The amount of electricity produced
however varies significantly and is lower during rainy days.
PV applications

Solar panels are used in a variety of applications.

The applications vary from small simple lanterns to large elaborate power plants.

Rural and urban households for domestic purposes like lighting.

Communities, small industries and institutions like schools, for lighting as well as
forpowering television sets, computers, etc.

Water pumping systems.

Telecommunications, as these systems are often installed in isolated places with
noother access to power.

Health centre vaccine refrigeration in rural areas.

Such solar refrigerators are also utilised to store blood plasma. WHO supports
programmes that install solar power for medical purposes.
41
3.5.2 Solar Thermal
Solar thermal energy harnesses the sun’s power to generate electricity by using lenses and
reflectors to concentrate the sun’s energy. The concentrated energy is then used to heat a fluid
such as water or oil and uses the steam to drive a turbine. The working fluid that is heated by
the concentrated sunlight can be a liquid or a gas. Different working fluids include water, oil,
salts, air, nitrogen, helium, etc. Different engine types include steam engines, gas turbines,
Stirling engines, etc
This technology is being deployed on a large scale to provide electricity. Storage systems are
also being investigated.
Solar thermal technology is large-scale by comparison. One big difference from PV is that
solar thermal power plants generate electricity indirectly. Heat from the sun's rays is collected
and used to heat a fluid. The steam produced from the heated fluid powers a generator that
produces electricity. It's similar to the way fossil fuel-burning power plants work except the
steam is produced by the collected heat rather than from the combustion of fossil fuels.
Direct-use Solar Thermal Systems
Direct-use thermal systems are usually located on individual buildings, where they
use solar energy directly as a source of heat. The most common systems use sunlight to
heat water for houses or swimming pools, or use collector systems or passive solar
architecture to heat living and working spaces.
Concentrating Solar Power
Concentrating solar power (CSP) technologies use mirrors to reflect and concentrate
sunlight onto receivers that collect the solar energy and convert it to heat. This thermal
energy can then be used to produce electricity via a steam turbine or heat engine driving a
generator. Following are the types of CSP technologies deployed in solar thermal systems:
a. Power Tower
b. Parabolic Trough
c. Stirling Dish Engine
42
Principle of Solar Thermal– To convert solar energy into heat energy by absorbing it.
Principle components
• Solar collector to covert energy efficiently
• Medium for energy transport
• Water/ air /others
• Storage system to overcome the mismatch
between energy available and demand
• Systems to transport and use energy/ medium
• Control systems
Table 3.1 Components of Solar Thermal System
Solar Thermal Applications
• Low
• Medium
• High
Temperature (>
Temperature
Temperature (>
30C)
(30C – 100C)
100C)
– Swimming pool heating
√
– Domestic water and space heating
√
– Electricity generation
√
– Commercial cafeterias, laundries,
√
hotels
– Ventilation air preheating
√
– Industrial process heating
√
– Industrial process heating
√
Table 3.2 Solar Thermal Applications
43
3.6 Solar Pumping
In rural and/or undeveloped areas where there is no power grid and more wateris needed than
what hand or foot pumps can deliver, the choices for poweringpumps are usually solar or a
fuel driven engine, usually diesel.There are very distinct differences between the two power
sources in terms ofcost and reliability. Diesel pumps are typically characterized by a lower
first costbut a very high operation and maintenance cost. Solar is the opposite, with a
higher first cost but very low ongoing operation and maintenance costs.In terms of reliability,
it is much easier (and cheaper) to keep a solar-poweredsystem going than it is a diesel engine.
This is evident in field where dieselengines lie rusting and unused by the thousands and solar
pumps sometimes runfor years without anyone touching them.
The first cost of solar is often daunting to donors and project implementers who
are tempted to stretch their budgets as far as possible to reach the greatestnumber of
beneficiaries by using a low first-cost option. But most would probablyagree that “quantity
over quality” is not a good value if the higher quantity optionis not likely to be giving good
service five years down the road and ifbeneficiaries are going to be stuck with interventions
they cannot afford tosustain over time.Solar pumping has had clear advantages for a number
of years but thedifferences are becoming more striking in a world of rapidly escalating fuel
costs.Not only will some of the world’s poorest people not be able to afford fuel for their
pumps, but living at the end of remote supply chains, they may not even be able
to get it in the first place as world demand overtakes supply.
The solar water pumping system is a stand-alone system operating on power generated using
solar PV (photovoltaic)system. The power generated by solar cells is used for operating DC
surface centrifugal mono-block pumpset for lifting water from bore / open well or water
reservoir for irrigation and drinking water purpose.
3.6.1 Introduction
Unlike conventional diesel or electrical pumps, solar pumps are powered by an array of solar
panels. Solar pumps are designed to operate on DC power produced by solar panels. These
pumps are gaining popularity all over the world wherever electricity is either unavailable or
unreliable. Solar pumps are becoming a preferred choice in remote locations to replace diesel
44
pumps. In such places, solar pumps are even viable economically in comparison to extension
of grid or running the pump on diesel.
3.6.2 Advantages
Along with the environmental advantages of solar power, solar pumps offer many other
advantages as well.
Low operating cost: One of the important advantages is the negligible operating costof the
pump. Since there is no fuel required for the pump like electricity or diesel, the operating cost
is minimal.
Low maintenance: A well-designed solar system requires little maintenance beyond
cleaning of the panels once a week.
Harmonious with nature: Another important advantage is that it gives maximum water
output when it is most needed i.e. in hot and dry months. Slow solar pumping allows us to
utilize low-yield water sources.
Flexibility: The panels need not be right beside the well. They can be anywhere up to 20
meters/ 60 feet away from the well, or anywhere you need the water. So, it offers freedom
regarding the placement of panels.
These pumps can also be turned on and off as per the requirement, provided the period
between two operations is more than 30 seconds.
3.6.3 Limitations
Variable yield: The water yield of the solar pump changes according to the sunlight. It is
highest around noon and least in the early morning and evening. This variability should be
taken into consideration while planning the irrigation.
Dry operation: The submersible pump has an in-built protection against dry run. However,
the surface pumps are very sensitive to dry run. A dry run of 15 minutes or more can cause
considerable damage to a surface pump.
45
Water quality: As with any other pump, solar pumps work best if the water is clean, devoid
of sand or mud. However, if the water is not so clean, it is advisable to clean the well before
installation or use a good filter at the end of the immersed pipe.
Theft: Theft of solar panels can be a problem in some areas. So the farmers need to take
necessary precautions. Ideally, the solar system should insured against theft as well as natural
hazards like lightning.
3.6.4 Solar v/s Diesel
A tight matching of peak irrigation demand and solar power supply during day
Solar Advantage
A variable pumping load application allowing large variations in sunlight
No fuel costs vsRs .45/liter long term price of diesel
Cost
Savings on high cost of providing last mile electricity connection to villagers
•
Power
Savings on current diesel and agriculture power subsidy
Improved management of peak power demand between urban and rural areas
Zero distribution losses due to decentralized power generation at point of use
•
Operation &
Maintenance
Health &
Environmental
Societal
Savings on current diesel and agriculture power subsidy
Long operating life of pumps
Highly reliable, durable and easy to operate and maintain
Reduction in air pollution due to diesel combustion
Reduction in greenhouse gas emissions
Generation of local employment in villages
Prevention of mass migration of villagers to urban areas
•
Enabling economic development of rural farmer
46
Figure 3.5 Solar v/s Diesel
3.6.5 Understanding the system
System components
The whole system of solar pumping includes the panels, support structure with tracking
mechanism, electronic parts for regulation, cables, pipes and the pump itself.
Solar panels or modules: Solar panels are the main components used for driving the solar
pump. Several solar panels connected together in arrays produce DC electricity.
Interconnections are made using series or parallel combinations to achieve desired voltage
and power for the pump.
Solar pump: Centrifugal or submersible pumps ar e connected directly to the solar array
using DC power produced by the solar panels. Solar pumps are available in several capacities
depending upon the requirement of water.
Support structure and tracking mechanism: Support structure provides stability to the
mounted solar panels and protects them from theft or natural calamities. To obtain maximum
47
output of water, a manual tracking device is fixed to the support structure. Tracking increases
the output of water by allowing the panels to face the sun as it moves across the sky.
Foundations (array and pump): Foundations are provided for support structures and pump.
Electrical interconnections: A set of cables of appropriate size, junction boxes, connectors
and switches are provided along with the installation.
Earthing kit: Earthing kit is provided for safety in case of lightning or short circuit.
Plumbing: Pipes and fittings required to connect the pump come as part of the installation.
Figure 3.6 Diagrammatic representation of solar pumping system
48
All the components apart from the pump and panels are called ‘balance of system’. It is
necessary to choose these components carefully according to requirements and field
conditions so as to make the best use of the system. It must be kept in mind that unlike
electricity grid, the solar system provides limited energy. So, solar pumping systems must be
managed so that the energy collected by the solar cell module balances the amount of
electricity used by the pump.
3.7 Types of pumps
3.7.1 Centrifugal pump
The term centrifugal means ‘moving or directed away from the center (or axis)’.

Centrifugal pumps are the most commonly used to move liquid through a piping
system. A centrifugal pump has two main components, one moving and the other
stationary. The moving component consists of an impeller and a shaft. The stationary
component consists of a casing, cover, and bearings.

Fluid enters pump impeller along or near to the rotating axis, and is accelerated by the
impeller, flowing radially outward into a diffuser or volute chamber, from where it
exits into the downstream piping system. Centrifugal acceleration creates energy
proportional to the speed of the impeller. The faster the impeller rotates, the faster the
fluid movement and the stronger its force.

Based on the direction of flow relative to the axis of the shaft, impellers can be
classified into the following:
 Radial flow: Impeller pushes liquid in a direction perpendicular to pump shaft
 Axial flow: Impeller pushes liquid in a direction parallel to pump shaft
 Mixed flow: Pressure is developed partly by centrifugal force and partly by lifting of
vanes of impeller

The number of impellers determines the number of stages of a pump. Based on the
stages, centrifugal pumps can be classified into the following:
 Single-stage pump - It has one impeller and is suitable for low-head service
49
 Two-stage pump - This has two impellers mounted in series and are apt for mediumhead service
 Multi-stage pump - It has three or more impellers mounted in series for high-head
service such as deep-well pumps
3.7.2Submersible pump
A submersible pump is one that is immersed in water. It pumps water by displacement.
Submersible pumps are suited both to deep well and to surface water sources. Most deep
wells use submersible pumps. These pumps are costlier but have a longer life and greater
reliability than surface pumps.
3.8 Choice of pump
Solar pumps are available in different capacities. For wells deeper than that, a submersible
pump is moreadvisable.The choice of solar pump depends on the quantity of water required
& the depth at whichwater is available.To design a system, however, it is necessary to view
the whole picture and consider allthe resources. So, the final installation must be based on a
thorough site study by theexperts.
Generally surface pumps of not more than 2 hp are used for irrigation purposes.
3.9Solar Pumping Model for the Project:
This model offers solar powered pumping solution that is sustainable and pollution free, and
has less than five years of payback period against diesel power.
The model has engineered an optimal solution that is offered to farmers. System integration
expertise between solar modules and centrifugal pumps that is enabled via a power
electronics middleware has been developed.A proprietary intelligent controller and variable
frequency drive solution have been developed that facilitates optimized system configuration,
which is more reliable and low in cost. The solutions are customized according to the need of
a particular farmer. Both AC and DC solar pumping solutions are provided that covers all
types of irrigation need in various parts of rural India.
In addition, an Online Remote Monitoring and Control Systemhasbeen developed that allows
online monitoring of the performance of the solar pump. It allows user to monitor as well as
50
control the system remotely, including system ON and OFF, power control, and water
discharge control.
Figure 3.7:Solar Powered Water Pump-Key Features

A solar pump assembly

Solar panels: Solar panel is a device which is used to convert energy contained
withinthe sun’s rays into electricity.
A photovoltaic module is an interconnected collection of cells combined into one item.
Solar modules allow for a wide range of varying sizes of solar panel products to be
51
manufactured.When a number of solar or photovoltaic modules are installed together, this is
commonly referred to as a solar array, or photovoltaic array.Arrays are a great way to
increase the potential of a solar electricity system, to provide a greater output of electricity.
The use of solar/photovoltaic panels allows us to generate electricity in remote corners of the
earth, or outer-space. This can be extremely useful when there is no other source of electricity
in the specific area.
There are two main forms of solar panels which are able to achieve different goals.. A
different design of solar panels which are increasing in popularity all the time, are the solar
water heating panels, which can be used to provide all or part of a homes hot water supply,
heat swimming pools, or be used for other purposes.
When using solar electricity panels, there will most likely be some form of battery storage
attached to the system. This allows for the storage of electricity (produced through the day) to
be used at a later date (such as at night).
Solar cells can be a great way to provide a boost to your electricity supply in a range of
different global locations, while also helping to lower your electricity bills, and helping the
fight against climate change.

Centrifugal pump
A centrifugal pump converts the input power to kinetic energy in the liquid by accelerating
the liquid by a revolving device - an impeller. The most common type is the volute pump.
Fluid enters the pump through the eye of the impeller which rotates at high speed. The fluid is
accelerated radially outward from the pump chasing. A vacuum is created at the impellers eye
that continuously draws more fluid into the pump.
The energy created by the pump is kinetic energy according the Bernoulli Equation. The
energy transferred to the liquid corresponds to the velocity at the edge or vane tip of the
impeller. The faster the impeller revolves or the bigger the impeller is, the higher will the
velocity of the liquid energy transferred to the liquid be. This is described by the Affinity
Laws.

Dual axis tracker structure
52
Electrical energy from solar panels is derived by converting energy from the rays of the sun
into electrical current in the solar cells. The main challenge is to maximize the capture of the
rays of the sun upon the solar panels, which in turn maximizes the output of electricity. A
practical way of achieving this is by positioning the panels such that the rays of the sun fall
perpendicularly on the solar panels by tracking the movement of the sun . This can be
achieved by means of using a solar panel mount which tracks the movement of the sun
throughout the day. Energy conversion is most efficient when the rays fall
perpendicularly onto the solar panels. Thus, the work is divided into three main parts namely
the mounting system, the tracking controller system and the electrical power system.
In solar tracking systems, solar panels are mounted on a structure which moves to track the
movement of the sun throughout the day. There are three methods of tracking: active,
passive and chronological tracking. These methods can then be configured either as singleaxis or dual-axis solar trackers. In active tracking, the position of the sun in the sky during the
day is continuously determined by sensors. The sensors will trigger the motor or actuator to
move the mounting system so that the solar panels will always face the sun throughout the
day. This method of sun-tracking is reasonably accurate except on very cloudy days when it
is hard for the sensor to determine the position of the sun in the sky thus making it hard to
reorient the structure.
A single-axis solar tracker follows the movement of the sun from east to west by rotating the
structure along the vertical axis. The solar panels are usually tilted at a fixed angle
corresponding to the latitude of the location. The use of single-axis tracking can increase the
electricity yield by as much as 27 to 32 percent.
On the other hand, a dual-axis solar tracker follows the angular height position of the sun in
the sky in addition to following the sun’s east-west movement .The dual-axis tracking
increases the electricity output as much as 35 to 40 percent.
53
Figure 3.8 Dual axis tracker structure
•
MPPT/VFD integration
Solar arrays have a power curve with a maximum power point and the device that sets this
point is called a Maximum Power Point Tracker.A MPPT, or maximum power point tracker
is an electronic DC to DC converter that optimizes the match between the solar array (PV
panels), and the battery bank or utility grid. To put it simply, they convert a higher voltage
DC output from solar panels (and a few wind generators) down to the lower voltage needed
to charge batteries.A maximum power point tracker (or MPPT) is a high efficiency DC to DC
converter which functions as an optimal electrical load for a photovoltaic (PV) cell, most
commonly for a solar panel or array, and converts the power to a voltage or current level
which is more suitable to whatever load the system is designed to drive.In any applications
which PV module is energy source, MPPT is used to correct for detecting the variations in
the current-voltage characteristics of solar cell and shown by I-V curve.MPPT solar charge
controller is necessary for any solar power systems need to extract maximum power from PV
module; it forces PV module to operate at voltage close to maximum power point to draw
maximum available power.MPPT allows users to use PV module with a higher voltage output
than operating voltage of battery system.For example, if PV module has to be placed far
away from charge controller and battery, its wire size must be very large to reduce voltage
drop. With a MPPT solar charge controller, users can wire PV module for 24 or 48 V
(depending on charge controller and PV modules) and bring power into 12 or 24 V battery
system. This means it reduces the wire size needed while retaining full output of PV module.
MPPT solar charge controller reduces complexity of system while output of system is high
efficiency. Additionally, it can be applied to use with more energy sources. Since PV output
power is used to control DC-DC converter directly.
MPPT solar charge controller can be applied to other renewable energy sources such as small
water turbines, wind-power turbines, etc.
54
By using an AC variable speed controller called a Variable Frequency Drive (VFD), the
pump motor will have the proper voltage and current. The trick is to supply DC from the PV
array directly into the DC bus inside the VFD. The normal AC input is not used.
As the sun rises and PV voltage and current increase, some VFD products will accept the
input and when the power is high enough, it will start the pump. The PV array must be large
enough to provide enough power to start the pump with including the head of water. The size
of the PV array required for this method can be very expensive.
This method will only pump when there is plenty of sunshine, but large pumps can be driven
by large PV arrays. Selecting the right pump and the VFD are critical factors then they will
dictate the size of the PV array.
•
Remote monitoring solution:
The devised dolution provides a web-based data analysis interface that allows the user to
perform various pump related operations

Remote system Turn-On and Turn-Off facility

Online performance analysis of the solar pump

Remote monitoring of alerts for fast notification of failures

Remote monitoring to maximize system On-Time
55
Figure 3.9 Snapshot of output of Online Monitoring system
56
4. MARKET BASED BUSINESS MODELLING:
4.1Business Model:
A business model describes the rationale of how an organization creates, delivers, and
captures value (economic, social, or other forms of value). The process of business model
construction is part of business strategy.
In theory and practice the term business model is used for a broad range of informal and
formal descriptions to represent core aspects of a business, including purpose, offerings,
strategies, infrastructure, organizational structures, trading practices, and operational
processes and policies. The literature has provided very diverse interpretations and definitions
of a business model. A systematic review and analysis of manager responses to a survey
defines business models as the design of organizational structures to enact a commercial
opportunity. Further extensions to this design logic emphasize the use of narrative or
coherence in business model descriptions as mechanisms by which entrepreneurs create
extraordinarily successful growth firms.
Whenever a business is established, it either explicitly or implicitly employs a particular
business model that describes the architecture of the value creation, delivery, and capture
mechanisms employed by the business enterprise. The essence of a business model is that it
defines the manner by which the business enterprise delivers value to customers, entices
customers to pay for value, and converts those payments to profit: it thus reflects
management’s hypothesis about what customers want, how they want it, and how an
enterprise can organize to best meet those needs, get paid for doing so, and make a profit.
Business models are used to describe and classify businesses (especially in an entrepreneurial
setting), but they are also used by managers inside companies to explore possibilities for
future development. Also, well known business models operate as recipes for creative
managers. Business models are also referred to in some instances within the context of
accounting for purposes of public reporting.
4.2 Importance of the business model
The business model is the key factor that leads to success in start-ups. It provides the starting
point that allows a company to maximize its profits—the sooner the business model is in
place, the better. A viable business model is a key determinant (along with product
57
development) in obtaining funding. Also, a business model must be scalable. Investors must
be able to envision a start-up’s business model (from an organizational and process
perspective) as the company grows.
A business model describes the value an organization offers to its customers. It illustrates the
capabilities and resources required to create, market and deliver this value, and to generate
profitable, sustainable revenue streams.
In principle, a business model does not matter to customers; it is important to the company
and the organization of its business. The business model determines the external relationships
with suppliers, customers and partners. However, it is primarily focused on the company’s
business processes.
4.3 How the business model works
The business model describes, as a system, how the components of the business (i.e.,
organizational strategy, business processes) fit together to produce a profit. It answers the
question,“How does this business work?” The answer to the question consists of two parts:
1. It includes a description of the efforts that generate sales, which produce revenue. The
value proposition is delivered to the target customer through a distribution channel. The flow
and update of the value proposition is influenced by the relationship capital created through
the company’s marketing activities.
2. It includes a description of the value-generating parts that make up the cost structure. A
company’s value proposition is created through the application of its key functions and
abilities, through a configuration of operational activities that includes input and interaction
with a partner network.
At a conceptual level, a business model includes all aspects of a company’s approach to
developing a profitable offering and delivering it to its target customers. A review of the
relevant literature reveals that more than 40 different components — such as target customer,
type of offering and pricing approach — have been included in various definitions of
business models put forward over the past few decades, with much of the variation stemming
from differences between the industries and circumstances in which a definition has been
applied.
58
For our purposes, we will explore the concept of a business model by addressing several core
questions that the majority of business model researchers deal within their models:

Who is the target customer?

What need is met for the customer?

What offering will we provide to address that need?

How does the customer gain access to that offering?

What role will our business play in providing the offering?

How will our business earn a profit?
Even though the concept of business model is potentially relevant to all companies, But it has
a special relevance in case of solar water pumping because solar water pumping is not just a
model but a solution pertaining to specific geographical conditions and therefore different
Business models may be applicable according to different condition.
The Bottom Line
By engaging in business model experimentation with a small, focused team, companies can
accomplish three important goals. First, they can understand the implications of different
business models and make clearer, better informed decisions about where and how they want
to compete. Second, they can identify the business models that will create the most value for
customers and themselves and appropriately leverage their existing resources. And third, they
can use business model innovation to extract the maximum potential from other growthfocused activities — their technical R&D, customer insight and strategic development efforts.
Given the high potential of business model innovation and how few companies have
mastered it, we see business model experimentation as a potent source of competitive
advantage.
4.4 Possible business Models for solar water irrigation
•
Pay-Per-Use
•
Lease Back
•
Shared channel
•
Direct Sale
59
4.4.1 Pay Per Use Model: In pay-per-use models, customers typically pay for each use
instead of owning an asset. A Pay-Per-Use approach in which consumers pay lower costs for
each use of a group-owned facility, product, or service. This limits the impact on their cash
flow while the sheer numbers of consumers makes the proposition sufficiently attractive for
third party providers models share certain features:
•Accommodating terms, in which customers pay as they have cash available (or may
subscribe for a set quantity of product or service) and may collect the product or service at
centralized distribution point or pay surcharge for delivery. Products can be metered, prepaid, rented, sold in individual portions, etc.
• Group infrastructure, which is provided not for individuals or families but for a larger
aggregation— yielding higher efficiency and lower unit costs than individual assets. Local
(village-level) management provides day-today operations of facilities, distribution, accounts,
equipment maintenance (engaging equipment suppliers, repairmen), etc., and a collective
local entity often serves as a means of enforcement (e.g. timely payments).
• Third-party administration, which an external entrepreneur — e.g. an individual, firm,
NGO, village consortium — undertakes to organize and provide services or products to a
low-income market (typically a village or group of villages), bringing requisite
administrative, operational, financial, marketing expertise/experience/success.
Figure 4.1 Pay-Per-Use Model
Enterprises that hope for social returns as well as financial ones often develop helpful lowcost durables and conveniences for the poor — solar lanterns, water filters, treadle pumps,
cook stoves, and the like. Despite the operational imperative to price such items as low as
60
possible, a product’s most significant barrier to attaining big sales numbers is often its price.
The amount of cash typically available to people in low-end markets is simply too little for
the necessary upfront lump sum payment. Customers are thus forced to borrow: from family
or friends if possible, or from moneylenders at steep rates. With the rise of microfinance
institutions, poor people in many areas have more credit options at rates significantly lower
that those of traditional moneylenders. But even credit at reasonable rates reduces (through
added expense) the economic benefit of low-cost products, and many potential customers
remain wary as credit for one durable reduces options to take credit for other things like
seeds.
4.4.2 Shared Channel
Distribution arises repeatedly as an obstacle to scale and business viability for socially
beneficial products, especially those aiming to reach the rural poor. Distribution networks
that reach into remote markets via SharedChannels, piggybacking products and services
through existing customer supply chains, thus enabling poor people to afford and gain access
to socially beneficial goods such as solar lanterns or efficient kerosene burners.
Shared channels piggybacks the distribution channels of other enterprises, reducing
costs and increasing reach through:
• Use of existing distribution platforms, which can be already functioning channels or
networks created for other purposes.
• Increased field force responsibility to carry multiple products from a single hub deeper into
the rural areas.
• Proper incentives to all participants in the distribution chain, including warehouses,
intermediate distributors, and end dealers, so that margins approach levels competitive with
existing products/services sold.
• New alliances to allow specialization by task or capability — e.g., those with better logistics
and fulfillment capability might handle physical delivery,or a channel can provide groupcustomer introductions to product-specific field forces.
61
Figure 4.2: Shared Channel Model
Distribution poses key obstacles to scale and viability of enterprises attempting to
reach the poor with socially beneficial products. That’s because the poor are costly
to reach, and there are few direct channels to them. Indeed, a remarkable 97 percent
of India’s retail landscape is in the “unorganized sector.”44 Distribution channels
similar to those that serve middle class customers — networks of wholesale distributors
and a mass of informal kiranashops, grocers,pharmacies, and other small-scale retailers —
extend intoslums and poor rural areas.
Although India’s retail sector is changing rapidly,45 formalretail outlets target primarily
upper income groups in urbanareas. These channels rarely provide the education or
push needed to vend socially beneficial products such as condoms, water purifiers,
solar lanterns, and insurance down toward the base of the pyramid. As such, it
is imperative — but difficult — to find suitable channels able to reach low-income
customers and also fulfill important customer education or sensitization roles. The
task is made harder by the fact that many socially beneficial products are “push”
products, unfamiliar to the low-income segments and requiring behavior change or
paying for something they formerly received free. Credit is a notable exception, and
its presence can at least create a “pull context,” but cannot solve these problems
alone. And as indicated above, borrowers have distinct preferences for their creditenabled
purchases.
Not surprisingly, the traditional way of selling socially beneficial products is by
62
creating a proprietary sales force and — along with after sales, service, and other
primary functions — use it to provide any needed customer education. Although it
may seem obvious, this was the single most frequently occurring mistake the study
found. Custom channels often result in uncompetitive product prices and nonscalable
business models. Because socially beneficial products need to be pricedas low as possible to
reach the greatest number of potential customers, expensive proprietary distribution channels
add to ticket price and thus diminish the potentialmarket. So too do attempts to employ poor
people in proprietary distribution channelsas an explicit part of the distribution strategy.
4.4.3 Direct Sales:A direct sales business model involves the marketing of a product or
service directly to the customer without the use of advertising, distribution or retail outlets. A
direct-selling approach utilizes a sales staff that employs personal demonstrations and
presentations to explain the uses of potentially complicated or involved services. The direct
sales business model eliminates the middleman and increases the sale-to-delivery speed of a
company’s products to consumers. Popularized by Dell, this model capitalizes on customers
who buy directly from the manufacturer. Since no additional margins are paid to middlemen,
the cost of sales is less, and customers buy at reduced prices. For example, airlines often give
a small discount to customers who book tickets on their Web sites. Some manufacturers may
prefer, however, to use middlemen to streamline the sales process, share the costs for local
marketing, and reduce costs by consolidating goods and services for distribution.
63
Figure 4.3: Direct Sales Model
The feasibility of Direct sales model for solar pumping is not possible in case of small and
marginal farmers because of the high cost of the system.
4.4.4 Lease back model
Leaseback, short for sale-and-leaseback, is a financial transaction, where one sells an asset
and leases it back for the long-term; therefore, one continues to be able to use the asset but no
longer owns it. The transaction is generally done for fixed assets, notably real estate and
planes, trains and automobiles, and the purposes are varied, including financing, accounting,
and taxing.
Leaseback agreements:
After purchasing an asset, the owner enters a long-term agreement by which the assest is
leased back to the seller, at an agreed-to rate. One reason for a leaseback is to transfer
ownership to a holding company, while keeping proper track of the ongoing worth and
profitability of the asset. Another one is for the seller to raise money by offloading a valuable
asset to a buyer who is presumably interested in making a long-term secured investment.
64
4. 5 Financial Modelling of solar pump model for Bundelkhand
The financial modeling for various business models was carried out using the primary and
secondary data. After the analysis, it was found that the pay-per-use model was found to be
most viable. The cost data analysis for systems from 0.5 hp to 7.5 hp was done with detailed
analysis for a system with 7.5 hp taking into account the various costs like System Cost,
subsidy , boring cost, total variable cost, operator cost.
The following is the snap shot of the excel sheet of the Pay-Per-Use business model for solar
pumping in bundelkhand:
65
5.CONCLUSIONS ANDRECOMMENDATIONS
5.1 Conclusion
The detailed analysis of the various solar policies , financial inclusions and extensive study of
Bundelkhand region let me to conclude that Pay-Per-Use
Business model was the most suited and financially viable for the considered sites of
bundelkhand.
The selection of a specific business model is totally a function of the region being considered,
no model is in general a best model. Different models will be most suited for different
situations.
It was also found that solar appears to be the best alternative source of energy in case of
bundelkhnad where grid supply is erratic and majorly unavailable and solar pumping is a
more viable option in comparison of the DIGI pump sets because of the ever increasing price
of diesel and high maintenance charges.
The government should focus on the solar energy taking into consideration the present energy
scenario. Government should create an enabling environment for solar water pumping by
introducing policy initiatives and subsidy schemes.
Future scope

Replication of similar projects in agrigane region of India and other country countries

Another key component is enabling feasible environment through right policy

Solar water pumping could be extended to the verticals of drinking water and water
purification which form one of the major problem of Bundelkhand region.

Extension to battery system could be done so that surplus power could be stored and
used for other purposes.

Also, systems such as mobile charging unit could be attached to the system which
becomes an alternative source of income for the owner of the solar pumping system.
66
5.2 Recommendations

Selection of the right technology is very important.

Solar pumps must be sized for the specific location of use, considering local solar
irradiance.

Efficiency improvement optimizes system cost

Seasonal variance needs to be incorporated for the success of the project

Wiring and equipment loss can affect desired delivery

Experience and expertise of service provider ensures implementation of feasible
model.
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BIBLIOGRAPHY
1. Central Electricity Authority , All India Regionwise Generating Installed
Capacity(MW) of Power utilities Including allocated shares in joint and central sector
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2. Central Electricity Authority , All India Regionwise Generating Installed
Capacity(MW) of Power utilities Including allocated shares in joint and central sector
utilities available at http://www.cea.nic.in/reports/monthly/executive_rep/jul12/8.pdf
3. Business Line, GROUND WATER USAGE available at
http://www.thehindubusinessline.com/opinion/article3346031.ece
4. Business Line, GROUND WATER USAGE available at
http://www.thehindubusinessline.com/opinion/article3346031.ece
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