Solar pumping projects are emerging as new business opportunities in India.

Dinesh Patidar

- Managing Director, Shakti Pumps India

How do you assess the growth opportunities for solar pumps? What are the demand drivers and the expected CAGR?

As you know solar irrigation pump segment is a new and emerging business segment growing parallel to the traditional pump industry. Being a promising industry segment in today's industrial landscape, it assumes greater significance in terms of environment and sustainability with clean energy applications. Energy has always been at the centre of all economic activities and it has been challenging for Indian farmers to meet energy requirements for irrigation with traditional grid supply that has always been highly erratic and not dependable. In such a situation, solar pumping solution has come out as a real blessing for farmers across India thanks to technological advancement.

With government support, the scaling up of solar pumps is in progress and it holds promising future for all its stakeholders particularly for Solar Pump manufacturers, PV Panel manufacturers and Solar Controller manufacturers in the country. Close to the heels of Paris Summit, Government of India has taken many landmark initiatives to reduce climate change impact and one of the major and most impactful decisions is launch of PM-KUSUM Scheme which envisages installation of about 20 lakhs standalone off-grid solar pumps, replacement of 10 lakh diesel pumps with solar pumps and solarisation of existing conventional pumps with a combined number of 30 lakhs pumps. The number is exorbitant and very large in size that offers great business opportunities to all stakeholders of this segment.

In the last few years, Shakti Pumps has been doing very well in solar segment as its core competency is manufacturing solar pumps and controllers apart from other application pumps. As a key player in PMKUSUM-I and II, company intend to achieve a much higher CAGR compared to previous years as new opportunities are coming up. New areas are opening up for company's growth. It is assumed that the momentum will continue in coming years.

What is regional-wise demand-supply scenario and also tell what has triggered the demand in certain regions compared to other regions?

States like Chhattisgarh, Rajasthan, Madhya Pradesh, Andhra Pradesh, Haryana, etc are early movers and doing really well. These states are consistently coming up with new projects every year. Regional demand depends upon states' solar vision. Some of the states have realised the benefits of solar pumps very early by starting early. Solar Pumping has become a success story for many which is really inspiring other states too to join the bandwagon.

What is your take on the incentives / subsidy scheme from different states?

Before PM- KUSUM scheme, states had different subsidy structures & policies for solar pumping projects. Central Govt used to contribute around 30% as a subsidy in most of the projects. Now almost all the states are working under PM-KUSUM scheme, so most of policies & subsidy structures are same. In KUSUM scheme, the proposed structure is Central Govt subsidy will be same as 30%, the State Govt Subsidy will also be 30% which used to vary from 30% to 60%. Farmer's contribution will be either 40% or 10% with 30% loan. Under KUSUM scheme Net-Metering concept also introduced in which farmer can sell excess electricity generated to distribution companies at pre-decided rates. So the farmer as a consumer of electricity will become a producer of electricity. Benefit to the government is availability of green energy at attractive rate while reducing the long term financial impact of power subsidies to farmers.

What supportive regulatory and policy reforms we need to further propel the growth in solar pumps in the country?

As discussed above solar pumping projects are emerging as new business opportunities in India. As far as the policies of the government are concerned we would like to appreciate the government of India for thinking about sustainable irrigation solutions which will go a long way in terms of benefits to farmers, distribution companies and more importantly to the environment by reducing the carbon footprints in line with Paris Climate Summit obligations.

What are the key risks and challenges in this sector?

The main challenge for the government in this sector is to mobilize huge initial funding requirements for the implementation of the PM-KUSUM scheme. In spite of the funding challenges government of India has earmarked over 35K crores for this ambitious project. Though the initial cost of solar pumping solution is relatively high, in the long term, it is a win-win for all i.e. for farmers, the Government and the Distribution Companies.

What is Shakti Pump's road map for the next couple of years?

Shakti Pumps is four decade old company manufacturing all types of water pumps that are energy efficient stainless steel pumps and solar energy products. Company also started its Electronics & Control Division to manufacture power electronic equipment like Variable Frequency Drive (VFD), Solar Pump Controllers, etc. Company has an ambitious growth plans and vision to become a Rs 5000 crore company in next 2-3 years.

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