A Preliminary Discussion of Opportunities and Threats

solar irrigation pumps a reality in India. It is only a matter of time before governments begin aggressive promotion of solar irrigation pumps. Several players are already in the market offering a range of solar pumping solutions. This note is inspired by a field visit to some of the solar pumps installed by Claro Energy in Bihar. Its cost structure which is high on fixed costs and low on variable costs makes solar pumps ideal for small farmers wanting to double up as Irrigation Service Providers (ISP) to their neighbours. Solar pumps are widely seen as an ‘energy’ solution; however, in the Indian context, they need to be viewed as a composite energy-and-water intervention that will affect both energy as well as groundwater economies. Aggressive promotion of solar pumps in groundwater abundant Eastern India has the potential to catalyze an ever-green revolution there. The same strategy in Western and Southern India, however, can increase the stress on depleted groundwater resources because solar pump owners face near-zero marginal cost of groundwater. In water-abundant Eastern India, subsidizing capital cost of solar pumps can be part of a sound promotional strategy. Elsewhere, it may be appropriate instead to connect farmers as microlevel Independent Power Producers (IPPs) to the grid and offer attractive price for buying surplus power from them. Tushaar Shah and Avinash Kishore Water Policy Research