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

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

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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

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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.

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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

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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

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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

NABAR

D

National Bank For Rural And Agricultural

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………………………………………………………………………………………………………………

EXECUTIVE SUMMARY……………………………………………………………………………………………………………….....iv-v

LIST OF FIGURES……………………………………………………………………………………………………………………….........vi

LIST OF TABLES…………………………………………………………………………………………………………………………...........

ABBREVIATIONS……………………………………………………………………………………………………………………...........vii

1 INTRODUCTION 1

1.1 Role of Energy in Indian Economy 11.2 Energy consumption in Agriculture sector 41.3 Solar Energy as an Alternative Source 61.3.1 Importance and relevance of Solar Energy for India 81.4 Problem Statement 101.5 Objective of the Report 101.6 Scope of the Report 101.7 Organizational Profile 111.7.1 About Claro Energy……………………………………………………………………………………………. 111.7.2 Claro’s Expertise…………………………………………………………………………………………………………. 111.7.3 Organization Structure…………………………………………………………………………………………………… 121.7.4 Claro's key Clients and Collaborations…………………………………………………………………………………… 13

2 LITERATURE REVIEW, POLICY & RESEARCH METHODOLOGY 14

2.1 Literature Review 142.2 Policies, Regulations& Legal framework for solar Pumping 212.2.1 The National Action Plan on Climate Change (NAPCC) 212.2.2 Jawahar Lal Nehru National Solar Mission (JNNSM/NSM) 232.3 Promotional Schemes 262.4 Financing the solar system262.4.1 Ministry of New and Renewable Energy (MNRE) 262.4.2 Indian Renewable Energy Development Agency Ltd. (IREDA) 272.4.3 National bank for rural and agricultural development(NABARD) 282.5 Subsidies 282.6 Research Methodology 302.6.1 Secondary Research 302.6.2 Primary Research: 302.6.3 Evaluation of Different Business Models: 30

3. PROSPECTS FOR SOLAR PUMPING IN BUNDELKHAND REGION 31

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3.1 About Bundelkhand 313.1.1 The Bundelkhand Region 333.1.2 Topography and geology 333.1.3 Natural vegetation and soil 333.1.4 Climate 333.1.5 Population and human development 343.1.6 Water sources and availability 343.2 Agriculture in Bundelkhand 353.2.1 The Critical Conditions in the Region of Bundelkhand 353.3 Unavailability and erratic grid supply in Bundelkhand 353.4 Introduction to solar power in Bundelkhand 363.4.1 Solar On grid 383.4.2 Solar Off Grid 383.5 Solar Energy Technologies: 383.5.1 Photovoltaic cells (PV) 393.5.2 Solar Thermal 423.6 Solar Pumping 443.6.1 Introduction 443.6.2 Advantages 453.6.3 Limitations 453.6.4 Solar v/s Diesel 463.6.5 Understanding the system 473.7 Types of pumps 493.7.1 Centrifugal pump 493.7.2 Submersible pump 503.8 Choice of pump 503.9 Solar Pumping Model for the Project: 50

4. MARKET BASED BUSINESS MODELLING 574.1 Business Model 574.2 Importance of the business model 574.3 How the business model works 584.4 Possible business Models for solar water irrigation 594.4.1 Pay Per Use Model 604.4.2 Shared Channel Model 614.4.3 Direct Sales 634.4.4 Lease back model644. 5 Financial Modelling of solar pump model for Bundelkhand 65

5.CONCLUSIONS ANDRECOMMENDATIONS 665.1 Conclusion 665.2 Recommendations 67

BIBLIOGRAPHY 78

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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

3

• Utilize the opportunity to become a manufacturing and R&D hub for solar power globally

• 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,

4

leading to huge waste of energy. Agriculture (plantation/food) consumed 7 123 thousand

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 low-

temperature 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 long-

term 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

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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 last-

mile 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

15

how solar 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

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

NAPCC (National Action Plan for Climate

Change)

National Mission

for Enhanced Energy

Efficiency (NMEEE)

National Mission

for Sustaining the Himalayan

Ecosystem

National Mission

for a Green India

National Mission

for Sustainable Agriculture

National Mission

for Strategic Knowledge for

Climate Change

National Mission

for Enhanced Energy

Efficiency (NMEEE)

National Water Mission

National Mission

on Sustainable Habitat

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

Application Segment 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

Area7 million Sqm 15 million Sqm

20 million

Sqm

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 feed-

in 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

top systems

• Financing of Projects

• Generation Based Incentive

• Monitoring

Off- grid applications • Soft loans through banks by re-financing

• Monitoring of the systems

Solar thermal sector- SWHS • Administration of Interest subsidy

scheme through banks / financial institutions

• Funding of projects

• Funding through intermediaries

Solar Manufacturing • 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 SystemBenchmark cost

2010/11Max. Subsidy (~30%)

With Storage 300 INR/Wp, 7,5 $/Wp 90 INR/Wp, 2.25 $/Wp

Without

Storage 210 INR/Wp, 5.25 $/Wp 70 INR/Wp, 1.75 $/Wp

Table 2.3: Benchmark cost and maximum grant by MNRE

28

No. Application Size of SystemApplicable

Components

1∙ Individuals

1.A All applications except 1.B ≤1 kWp 30% capital subsidy

plus soft loan (5%

p.a.)1.B

Pumps for irrigation and

community drinking water ≤ 5 kWp

2∙ Non-commercial entities

2.A All applications except 2.B ≤ 100 kWp per site 30% capital subsidy

plus soft loan (5%

p.a.)2.B

Mini-grids for rural

electrification ≤250 kWp per site

3∙ Industrial/Commercial entities

3.A All applications except 3.B ≤ 100 kWp per site 30% capital subsidy

or soft loan (5%

p.a.)3.B

Mini-grids for rural

electrification ≤ 250 kWp per site

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

Figure 2.2 Financing Framework

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

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 wood-

based 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 800-

900mm 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!

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

CROP IRRIGATION IS SUFFERING GRID POWER DIESEL

POWER Food scarcity &

famine Inflation Migration from

villages Poor becoming

poorer Strikes &protests

SOLAR POWER

Unavailable

Intermittent

Infrastructure dependent

High running cost

Inconvenient

Polluting

Peak Power Deficit (%), 2011–12

Solar pumps provide electricity and irrigation water in a non disruptive way

Convenient

Reliable

Stand-alone

Renewable

No operating costSolar

irrigationPump

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

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

Temperature (>

30C)

• Medium

Temperature

(30C – 100C)

• High

Temperature (>

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

46

Power

Cost

Operation & Maintenance

Health & Environmental

Societal

Solar AdvantageA tight matching of peak irrigation demand and solar power supply during day

A variable pumping load application allowing large variations in sunlight

No fuel costs vsRs .45/liter long term price of diesel

Savings on high cost of providing last mile electricity connection to villagers

Improved management of peak power demand between urban and rural areas

Zero distribution losses due to decentralized power generation at point of use

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

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 medium-

head 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

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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

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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

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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 single-

axis 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.

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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

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(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.

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

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Figure 3.9 Snapshot of output of Online Monitoring system

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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

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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.

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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 growth-

focused 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

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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, pre-

paid, 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 low-

cost 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

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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 group-

customer introductions to product-specific field forces.

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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.

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Not surprisingly, the traditional way of selling socially beneficial products is by

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.

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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.

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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:

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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.

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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 utilities available at http://www.cea.nic.in/reports/monthly/executive_rep/jul12/8.pdf

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