The Ministry of New and Renewable Energy is developing a framework for agrivoltaics, targeting 5 GW of capacity to allow solar power generation and crop farming on the same land. This initiative aims to provide farmers with an extra income stream while optimizing land use. Investors should monitor how the government balances the 25-30% higher installation costs compared to traditional solar projects.
The Ministry of New and Renewable Energy is drafting a national policy to scale up agrivoltaics, a model that combines solar energy production with agricultural activity. By installing solar panels on elevated stilted structures, the system creates enough space underneath for farmers to continue growing crops. This initiative aims to address India's land-availability challenges for renewable projects while providing an additional, steady income source for small and marginal farmers, who make up about 85% of the farming community.
While the technology offers dual benefits, the government has identified a significant financial challenge: agrivoltaics currently costs 25 to 30 percent more to install than traditional ground-mounted solar plants. This higher cost is primarily due to the need for specialized mounting structures and specific field designs to maintain crop health. To make these projects viable, the government is considering financial incentives and clear guidelines as part of the upcoming PM-KUSUM 2.0 scheme, which may target a total of 10 GW for the agri-PV segment.
Geographically, the government has identified high-potential regions for these projects, specifically Maharashtra, Rajasthan, Andhra Pradesh, Madhya Pradesh, Karnataka, and Uttar Pradesh. These states together host half of the country's potential for combined land use. To ensure the success of the first 5 GW phase, the government is initiating joint research projects with Germany to study the balance between energy generation and varied crop yields in Indian conditions.
The policy roadmap involves launching pilot programs to test these economic models in real-world scenarios. A draft policy will be released for public and stakeholder consultation to refine the framework before a full-scale rollout. For investors and industry observers, the key monitorables will be the specific subsidy structure, the viability of the stilted panel designs, and how efficiently the government integrates these projects into existing agricultural infrastructure. The success of this move will largely depend on the government's ability to lower the implementation costs through scale and technological innovation, ensuring that renewable energy expansion does not compromise national agricultural output.