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Indian agricultural solar water pump market, a billion dollar opportunity

, April 12, 2014, 0 Comments

Indian Solar Water Pump-MarketExpressABB has become the latest electrical giant to launch agricultural solar water pumps for the Indian market. The company follows other big global giants such as Schnieder and Toshiba to grab a piece of this billion dollar opportunity. Solar investors generally look at solar panel installations, while investing in the solar story.

However, other applications of solar energy such as water pumps, chargers, lights etc. are becoming big opportunities as well. As solar panel costs decline, many applications are becoming extremely cost competitive and displacing the fossil fuel mainstream products.

Solar powered agricultural Pumps
India has got millions of water pumps powered by diesel in its vast agricultural sector. Not only is diesel expensive, but also leads to environment degradation and global warming. Government in India has realized that promoting solar powered agricultural water pumps will help in reducing the massive energy imposts as well. The Indian government is subsidizing solar water pumps and state government have also started giving out massive subsidies as much as 90%, to promote the use of these pumps.

The cost of solar water pumps ranges from $4000 to $7000, which means that the capital cost is very high for small time farmers. Subsidizing the cost of these pumps is necessary for governments.

But it provides returns for the governments in the long run, given that they provide free electricity to farmers which adds up to a large cost in the long term. Electricity in India is quite expensive due to large fuel imports, as well as inefficient transmission infrastructure. The agricultural pump market is seeing good competition from Chinese players such as SunEdison as well. This has led to a lowering of solar agricultural pump costs, which is good for the consumers as well as the government.