solar water pump (swp) in india "research thesis presentation"
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“MARKET POTENTIAL FOR SOLAR WATER PUMPING
SYSTEM AND COST BENEFIT ANALYSIS
OF DIESEL VS. SOLAR PUMP”
Prepared by: Kevin Kovadia (AM0712)
Guided By:
Dr. Mercy Samuel (Faculty Guide)
Associate Professor,
Faculty of Management, CEPT University
Mr. Nilesh Arora (External Guide)
Founder - Partner,
ADDVALUE Consulting Inc. (www.avci-lean.com)
July 2014
Flow of Presentation
Keywords
Abbreviation
Introduction
Research Objective
Literature review
Research Methodology
Cost Benefit Analysis of Diesel vs. Solar Water Pump
Conclusion
Bibliography
Appendix
Keywords
Solar Water Pump,
Off grid Solar Application,
Market Potential,
Cost Benefit Analysis,
Break even point
Abbreviation
SWP Solar Water Pump
MNRE Ministry of New and Renewable Energy
PVP Photo Voltaic Pump
PV Photovoltaic
AC Alternate Current
DC Direct Current
JNNSM Jawaharlal Nehru National Solar Mission
RKVY Rashtriya Krishi Vikas Yojana
GDP Gross domestic product
GHG Greenhouse gas
JGS Jyotirgram Scheme
Indian Pump Industry Overview
The Indian Pump industry has more than 800 manufacturers
with worker strength of over 40,000 producing about 5 million
pumps annually.
Year FY 2012 FY 2013
Estimated Market (in Rs) 5000 Cr 8375 Cr
Annual Growth rate 8% 12%
No. of Pump Manufacturers 800+ 800+
% of Demand meet by Domestic
Manufacturers
95% 95%
Source: (Singhi_Advisors, 2011), (TATA , 2013)
Solar Water Pump
It is a pump running on electricity generated by photovoltaic
panels or the thermal energy available from collected sunlight
as opposed to grid electricity or diesel run water pumps.
SWP system has three parts :
Pump
Inverter
Solar panels
Why Solar?
0
2
4
6
8
10
12
14
16
2011 2013 2015 2017 2019 2021
Co
st (
Rs)
(P
er
KW
h)
Solar PV Conventional Power Diesel Gen. Set
Source: Headway Solar (P) Ltd.
Market Potential
The estimated maximum total sales/revenue of all suppliers of product in market during a certain period. 1
Estimating Market Potential (MP) = N × P × Q
Estimating Market Potential (MP) of firm A = N × P × Q × MS 2
MP = market potential
N = total number of potential consumers
P = average selling price
Q = average annual consumption
MS = market share (%) of consumers buying from firm A
1. http://www.businessdictionary.com/definition/market-potential.html
2. http://plantsforhumanhealth.ncsu.edu/extension/marketready/pdfs-
ppt/business_development_files/PDF/estimating_market_potential.pdf
Cost benefit analysis (CBA)
CBA is a systematic process for calculating and comparing benefits and costs of a project, decision or government policy.
It involves comparing the total expected cost of each option against the total expected benefits, to see whether the benefits compensate the costs, and by how much. It is also called as benefit–cost analysis (BCA).
CBA has two purposes:
To determine if it is a sound investment/decision
To provide a basis for comparing projects.
Cost-Benefit Analysis (CBA) estimates and totals up the equivalent money value of the benefits and costs to the community of projects to establish whether they are worthwhile. 3
3. http://www.sjsu.edu/faculty/watkins/cba.htm
Research Objective
The objective of this study is to analyze market potential of
solar water pumps.
To analyze what is the need of Solar Water Pump.
To conduct a comparative cost benefit analysis among Diesel
vs. Solar Water Pump.
Literature review
The electricity consumption in agriculture sector amounts to
27% of total consumption of electricity in India. About 25%
of electricity consumption is account for Irrigation pumps used
in the agriculture sector in India.
48.89 % in Gujarat,
43.39 % in Haryana,
42.27 % in Karnataka
21 million irrigation pump sets in India, of which
9 million are run on diesel and rest are grid based.
(Source: Amit Jain; Stellina Jolly, 2012)
Literature review
According to the KPMG report, a cumulative potential of
around 16 GW from agriculture category could be realised
by 2022. (JNM Target is 20 GW by 2022)
Innovative business models such as integrators of pump set and
solar modules may be required to realize this potential.
(Source: KPMG, n.d.)
Literature review
India’s Ministry of New and Renewable Energy estimates
700,000 diesel pumps that could be replaced are bought in
India every year.
Tarun Kapoor, the joint secretary, MNRE said that “Irrigation
pumps may be the single largest application for solar in the
country” (SPROSS, 2014).
Literature review
Source: Self Compiled
Literature review
(Image Credit: Sunible.com)
Research Methodology
Interview: The interview includes questions like - what is
capacity of solar water pump, what is process of installing
SWP, effectiveness of Government subsidy etc.
five structured interviews were carried out of solar water
pump users. And this all SWP user belong to north central
Gujarat.
Kheda District - 3 Interviews
Gandhinagar District - 1 Interview
Banaskantha District - 1 Interview
Cost Benefit Analysis of Diesel vs. Solar Water Pump
5hp Diesel Pump Costing Assumptions
Particular Scenario 0 Scenario 1 Scenario 2 Scenario 3
No. of Hour Pump Usage /day 1 2 4 8
No. of Sunny Days/ Year 250 250 250 250
No. of Hour Pump Usage/ Year 250 500 1000 2000
Price of Diesel/ litre (Rs) 63 63 63 63
Diesel Usage/ Hour (5HP) 1 1.7 1.7 1.7 1.7
Hike in Diesel Price (%) 10 10 10 10
Total Running Cost (Rs) 26775 53550 107100 214200
1 (Source: Seleshi Bekele Awulachew (IWMI), 2009)
5hp SWP Costing With and Without Subsidy (30%)
Year
Capital Cost
Without
Subsidy (A)
Capital Cost
With 30%
Subsidy (D)
Operating
Cost (B)
Maintenance
Cost (C)
SWP Cumulative Cost
W/O Subsidy
(A+B+C)
SWP Cumulative Cost
With 30% Subsidy
(D+B+C)
1 489400 342580 0 2500 491900 345080
2 0 0 0 2500 494400 347580
3 0 0 0 2500 496900 350080
4 0 0 0 2500 499400 352580
5 0 0 0 2500 501900 355080
6 0 0 0 2500 504400 357580
7 0 0 0 2500 506900 360080
8 0 0 0 2500 509400 362580
9 0 0 0 2500 511900 365080
10 0 0 0 2500 514400 367580
5hp Diesel Pump vs. SWP Costing (Scenario 0)
Year Capital
Cost (A)
Operating
Cost (B)
Maintenan
ce Cost (C)
Total Cost
(A+B+C)
Diesel Pump
Cumulative
Cost
SWP Cost
Without
Subsidy
SWP Cost
With 30%
Subsidy
1 30000 26775 5000 61775 61775 491900 345080
2 0 29453 5000 34453 96228 494400 347580
3 0 32398 5000 37398 133625 496900 350080
4 0 35638 5000 40638 174263 499400 352580
5 0 39201 5000 44201 218464 501900 355080
6 0 43121 5000 48121 266585 504400 357580
7 0 47434 5000 52434 319019 506900 360080
8 0 52177 5000 57177 376196 509400 362580
9 0 57395 5000 62395 438590 511900 365080
10 0 63134 5000 68134 506725 514400 367580
Total 506725
Breakeven Point in Scenario 0
0
100000
200000
300000
400000
500000
600000
1 2 3 4 5 6 7 8 9 10
Cum
ula
tive C
ost
(R
s)
Break Even Duration (Year)
Diesel Pump
SWP without Subsidy
SWP With 30% Subsidy
5hp Diesel Pump vs. SWP Costing (Scenario 1)
Year Capital
Cost (A)
Operating
Cost (B)
Maintenan
ce Cost (C)
Total Cost
(A+B+C)
Diesel Pump
Cumulative
Cost
SWP Cost
Without
Subsidy
SWP Cost
With 30%
Subsidy
1 30000 53550 5000 88550 88550 491900 345080
2 0 58905 5000 63905 152455 494400 347580
3 0 64795.5 5000 69796 222251 496900 350080
4 0 71275.05 5000 76275 298526 499400 352580
5 0 78402.56 5000 83403 381928 501900 355080
6 0 86242.81 5000 91243 473171 504400 357580
7 0 94867.09 5000 99867 573038 506900 360080
8 0 104353.8 5000 109354 682392 509400 362580
9 0 114789.2 5000 119789 802181 511900 365080
10 0 126268.1 5000 131268 933449 514400 367580
Total 933449
Breakeven Point in Scenario 1
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
1 2 3 4 5 6 7 8 9 10
Cum
ula
tive C
ost
(R
s)
Break Even Duration (Year)
Diesel Pump
SWP without Subsidy
SWP With 30% Subsidy
5hp Diesel Pump vs. SWP Costing (Scenario 2)
Year Capital
Cost (A)
Operating
Cost (B)
Maintenan
ce Cost (C)
Total Cost
(A+B+C)
Diesel Pump
Cumulative
Cost
SWP Cost
Without
Subsidy
SWP Cost
With 30%
Subsidy
1 30000 107100 5000 142100 142100 491900 345080
2 0 117810 5000 122810 264910 494400 347580
3 0 129591 5000 134591 399501 496900 350080
4 0 142550.1 5000 147550 547051 499400 352580
5 0 156805.1 5000 161805 708856 501900 355080
6 0 172485.6 5000 177486 886342 504400 357580
7 0 189734.2 5000 194734 1081076 506900 360080
8 0 208707.6 5000 213708 1294784 509400 362580
9 0 229578.4 5000 234578 1529362 511900 365080
10 0 252536.2 5000 257536 1786898 514400 367580
Total 1786898
Breakeven Point in Scenario 2
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
2000000
1 2 3 4 5 6 7 8 9 10
Cum
ula
tive C
ost
(R
s)
Break Even Duration (Year)
Diesel Pump
SWP without Subsidy
SWP With 30% Subsidy
5hp Diesel Pump vs. SWP Costing (Scenario 3)
Year Capital
Cost (A)
Operating
Cost (B)
Maintenan
ce Cost (C)
Total Cost
(A+B+C)
Diesel Pump
Cumulative
Cost
SWP Cost
Without
Subsidy
SWP Cost
With 30%
Subsidy
1 30000 214200 5000 249200 249200 491900 345080
2 0 235620 5000 240620 489820 494400 347580
3 0 259182 5000 264182 754002 496900 350080
4 0 285100.2 5000 290100 1044102 499400 352580
5 0 313610.2 5000 318610 1362712 501900 355080
6 0 344971.2 5000 349971 1712684 504400 357580
7 0 379468.4 5000 384468 2097152 506900 360080
8 0 417415.2 5000 422415 2519567 509400 362580
9 0 459156.7 5000 464157 2983724 511900 365080
10 0 505072.4 5000 510072 3493796 514400 367580
Total 3493796
Breakeven Point in Scenario 3
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
1 2 3 4 5 6 7 8 9 10
Cum
ula
tive C
ost
(R
s)
Break Even Duration (Year)
Diesel Pump
SWP without Subsidy
SWP With 30% Subsidy
Conclusion
Particular Scenario 0 Scenario 1 Scenario 2 Scenario 3
No. of Hour Pump
Operating/ day 1 2 4 8
No. of Sunny Days/ Year 250 250 250 250
No. of Hour Pump
Operating/ Year 250 500 1000 2000
Break Even Point
Without Subsidy 10 Year 6
1
4 Year 3
3
4 Year 2 Year
Break Even Point
With 30% Subsidy 7 3
4 Year 4
3
4 Year 2
1
2 Year 1
1
2 Year
Conclusion
Farmer buys a solar water pump mainly because of two reasons. One is unavailability of electricity at farm and other is increasing price of diesel.
Out of the primary survey it was found that farmer also buy solar water pump because of land ownership issue. To get electricity connection, farmer need land ownership document and signature of related owners.
Normally one can become land owner from his father’s land and father’s land is shared among his children. Now to get signatures of all related owner is difficult.
So, in this situation to get electricity connection is difficult. So, farmers prefer to buy solar water pump.
Bibliography
Amin, R. (n.d.). An Overview of Indian Pump Industry. pp. 1-2.
Amit Jain, S. J. (2012). Is Solar a solution to Blackouts in India: A case study with agriculture
diesel pumps sets?
Brian McSorley, M. M. (2011). Solar Pumps: A solution to improving water security in drought
prone areas. Oxham.
Census of India. (2011). Source of lighting: 2001-2011, Houselisting and Housing Census Data
Highlights - 2011. Registrar General & Census Commissioner, India (ORGI), Government of
India.
EmCON. (2006). Feasibility Assessment for the Replacement of Diesel Water Pumps with Solar
Water Pumps. NAMIBIAN RENEWABLE ENERGY PROGRAMME (NAMREP).
GIZ. (2013). Solar Water Pumping for Irrigation: Potential and Barriers in Bihar, India. Indo-
German Energy Programme (IGEN), Deutsche Gesellschaft für Internationale Zusammenarbeit
(GIZ) GmbH.
Gupta, R. K. (2011). The role of water technology in development: a case study of Gujarat
State. (pp. 1-14). Zaragoza, Spain: UN Water.
Hu, B. (2012). Solar Panel Anomaly Detection and Classification. Waterloo: University of
Waterloo.
Bibliography
IEA. (Octomber, 2011). energy for all: financing access for the poor. energy for all conference (pp. 19-22). Oslo, Norway: International Energy Agency.
K Palanisami, K. M. (2011). Spread and Economics of Micro-irrigation in India: Evidence from Nine States. REVIEW OF AGRICULTURE, 1-6.
KPMG. (2011). “The Rising Sun - A Point of View on the Solar Energy Sector in India”. Mumbai: KPMG.
lorentz. (2008). Solar Water Pumps in Namibia: A Comparison Between Solar And Diesel.
MNRE. (2013). Jawaharlal Nehru National Solar Mission - SOLAR PHOTOVOLTAIC WATER PUMPING SYSTEMS.
Seleshi Bekele Awulachew (IWMI), P. L. (2009). Pumps for small-scale irrigation. IWMI.
SELF. (2008). A COST AND RELIABILITY COMPARISON BETWEEN SOLAR AND DIESEL POWERED PUMPS. Solar Electric Light Fund (SELF).
Shah. (1993). Groundwater markets and irrigation development: Political economy and practical policy. Bombay: Oxford University .
Shah, T. (2008). Crop per Drop of Diesel! Energy-Squeeze on India’s Smallholder Irrigation. Anand, India: International Water Management Institute, .
Shamaila Zia, T. A. (2012). easibility Assessment of photovoltaic pumping for irrigation in West Bengal, India. 1. Institute of Agricultural Engineering (440e) Universität Hohenheim, Stuttgart, Germany 2. Indian Institute of Technology, Kharagpur, India.
Bibliography
Shamaila Zia, T. A. (2012). easibility Assessment of photovoltaic pumping for irrigation in West Bengal, India. 1. Institute of Agricultural Engineering (440e) Universität Hohenheim, Stuttgart, Germany 2. Indian Institute of Technology, Kharagpur, India.
Shiv Lal, P. K. (2013). Techno-economic analysis of solar photovoltaic based submersible water pumping system for rural areas of an Indian state Rajasthan . Science Journal of Energy Engineering, 1-4.
Singhi_Advisors. (2011). Pump & Valve Industry – Overview & Opportunities.
Somasekhar. G, B. G. (2014). Marketing Methodology of Solar PV Power Packs. IOSR Journal of Economics and Finance (IOSR-JEF), 38-43.
SPROSS, J. (2014, February 7). India Wants To Switch 26 Million Water Pumps To Solar Power Instead Of Diesel. Retrieved April 15, 2014, from http://thinkprogress.org: http://thinkprogress.org/climate/2014/02/07/3265631/india-solar-pump-swap/
taiyosolar.in. (n.d.). solarpump. Retrieved may 20, 2014, from taiyosolar: http://taiyosolar.in/solarpump.html
TATA . (2013). Indian Pumps and Industrial Valves Market. TATA Strategic management group.
TERI. (2013). TERI Energy Data Directory & Yearbook (TEDDY) 2012/13. TERI Publication.
The Times of India. (2013, March 4). Power-full’ Gujarat gives 24-hour electricity. Retrieved May 10, 2014, from indiatimes.com: http://timesofindia.indiatimes.com/india/Power-full-Gujarat-gives-24-hour-electricity/articleshow/18786012.cms
Tushaar Shah, S. V. (n.d.). Real-time Co-management of Electricity and Groundwater: An Assessment of Gujarat’s Pioneering ‘Jyotirgram’ Scheme. International Water Management Institute, Anand, India.
Site location of SWP User (1) near Hirapur Chokdi
Site location of SWP User (2) near Hirapur Chokdi
Site location of SWP User (3) near Hirapur Chokdi
Site location of SWP User (4) near Palanpur
Site location of SWP User (5) near Ghamij Village