To Meet AgriPV Capacity Of 20 GW In India By 2040, 1.1 Lakh Jobs To Be Created-Report

India’s potential for Agri-Photovoltaic (APV) varies significantly across districts, ranging from 3,156 GW to 13,803 GW for various APV technologies according to recent report.

In a report by the Fraunhofer Institute for Solar Energy Systems, EY, and CSTEP they projected APV capacity from 2024 to 2040, to achieve a cumulative addition of 20 GW and 60 GW under moderate and optimistic scenarios, respectively. This report delves into Agrivoltaics (APV) potential in India, identifying three technologies and estimating investments of INR 81,424 crores for 20 GW and INR 2,13,858 crores for 60 GW. It also addresses the viability gap funding (VGF) necessary to make 1 MWp APV systems economically viable, considering the difference between the levelized cost of electricity (LCOE) and average power procurement prices in India’s day-ahead market (DAM) for DISCOMs.

Furthermore, the report stresses the importance of training to bridge skill gaps in the APV sector, projecting a need for an estimated 1.1 lakh full-time equivalent (FTE) jobs for the moderate case and 3.38 lakh FTE jobs for the optimistic case by 2040. These roles encompass various functions from application to operations and maintenance, with distributed energy technologies such as solar PV seen as advantageous in this context.

APV technology not only reduces the costly supply burden on DISCOMs but also mitigates substantial losses in the distribution network, particularly evident in states like Bihar (up to 25%). By supplying power to peripheral agricultural areas, APV contributes to the financial well-being of DISCOMs while ensuring the continuity of farming activities.

A crucial insight for developing a business model is the cost of electricity supplied to farmers by utilities. While the average cost for agricultural consumers in India is INR 7-8 per kWh, DISCOMs recover marginal costs through cross-subsidization, with some states like Punjab providing free electricity to agricultural consumers, posing challenges for cost recovery. Consequently, the model suggests subsidizing electricity for small farmers while expecting medium/large farmers to contribute partially, supplemented by state subsidies.

Key takeaways include the coverage of over 95% of farmer categories by both small farmer and medium/large business models. In states where the Average Power Purchase Cost (APPC) exceeds INR 4.5 per unit, the business model is viable without additional support structures. However, states with lower APPC may require VGF to ensure viability. Adjusting costs with total avoided loss corpus results in a net loss for DISCOMs under the business model, suggesting the need for VGF, particularly in states like Maharashtra and Madhya Pradesh.

The report also found, the capacity projection of APV from 2024 to 2040 an addition of 20 GW and 60 GW of APV under the moderate and optimistic scenario, respectively. The total investment required to realize the 20 GW capacity (moderate case) is to be around INR 81,424 crores and INR 2,13,858 crores for 60 GW of APV installation in the country. Based on the national average power procurement price in the day ahead market (DAM) during the 08:00 to 18:00 hours for DISCOMs in India and the LCOE of APV systems, the project team have also highlighted the viability gap funding (VGF) support required to make the business model viable for a 1 MWp APV systems. VGF is only considered in cases where LCOE is greater than the average DAM prices.