Following up from the previous post, insights from KPMG report's analysis shows that there is huge business opportunity in Solar pump sets area.
Agriculture stands as a main occupation of the majority of population in India with water pumped from ground being the main source of irrigation. Of the installed pump sets, diesel occupies the major share followed by electric pumps. The efficiency of pumps is very low and if buying diesel from far off locations is the problem with diesel pump sets, unreliable electricity from the grid is for the electric pumps. Not to forget that highly subsidized electricity is also on the other end of the road leading to excessive pumping of water and hence depleting the water tables.
Solar pump sets stand as a solution for the problems presented above. Solar energy is more reliable than the electricity from the grid in most parts of the country, it's easily available and it can become a source of income for the farmers if they feed the unused electricity back into the grid which can be an incentive for not pumping excessive amount of water from the ground.
In spite of the subsidy being given by the government, high cost of the solar pump sets stands as a hindrance for the large scale deployment. As per KPMG's report, the market can take off if the capital cost decreases by 34% from the current level and they are expected to go down in the coming years.
Report available at: https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/ENRich2015.pdf