India’s commitment to achieving its renewable energy targets marks a defining milestone in the country’s clean energy transition. While renewable energy deployment has accelerated over the last decade, the growth has remained geographically concentrated in a few states, which leads to improper price signals. In addition, issues related to land availability and evacuation infrastructure continue to pose challenges to large-scale renewable energy projects.

In this context, Agriphotovoltaics, the co-location of solar power generation and agricultural activity, emerges as a promising solution that not only ensures balanced regional development but also optimises land use and strengthens rural economies. Agriphotovoltaics systems offer dual benefits by enabling solar power generation alongside agriculture, thereby ensuring diversification of income for farmers. A study by GIZ (2024) estimates that India’s technical potential for Agriphotovoltaics ranges between 3,156 GW and 13,803 GW. With nearly 43% of India’s land area under agriculture, the potential for Agriphotovoltaics deployment is immense.

This study by Climate Policy Initiative (CPI) and the Power Foundation of India (PFI), a registered society under the aegis of the Ministry of Power, GoI, provides an in-depth assessment of the regulatory, policy, and financial landscape for Agriphotovoltaics in India. It is the first-of-its-kind study to model Feed-in Tariffs at varying Capacity Utilisation Factors (CUFs), taking into account the costs associated with elevated structures, land lease, and benefits to farmers. The modelled tariffs (based on CERC Renewable Energy Tariff Regulations, 2024), ranging between INR 3.67/kWh and INR 5.49/kWh, indicate that Agriphotovoltaics projects are economically viable Distributed Renewable Energy (DRE) systems.

The analysis further reveals that Agriphotovoltaics (DRE) projects offer lower levelized tariffs compared to non-DRE grid-connected projects, even after factoring in additional farmer benefits (INR 0.60/kWh). The impact of Transmission loss and Transmission Infrastructure in non-DRE is around INR 1.42/kWh, which gets avoided in Agriphotovoltaics projects. When compared with Rooftop Solar (RTS), prima facie, Agriphotovoltaics appears costlier if the farmer’s benefit is included, which is actually an economic benefit that may result in a higher economic internal rate of return compared to the financial internal rate of return comparison between projects. However, excluding this component, Agriphotovoltaics tariffs (INR 4.14/kWh+INR 0.75/kWh) are at par with RTS (INR 5.08/kWh). Agriphotovoltaics offers greater scalability, especially in dense urban areas and group Housing Societies where rooftop potential is limited and shading issues arise.

The study recommends a multi-stakeholder approach for scaling up Agriphotovoltaics in India.

Key recommendations include

• Ministry of Power: Mandate the compulsory purchase of Agriphotovoltaics power under the Renewable Purchase Obligation (RPO) framework

• Ministry of New and Renewable Energy: Define Agriphotovoltaics to facilitate eligibility for subsidies and streamlined approvals

• State Electricity Regulatory Commissions: Adopt a feed-in tariff framework that includes elevated structure costs, land lease payments, and free power to farmers other than the Base Tariff, while mandating tripartite agreements between developers, farmers, and DISCOMs

• Ministry of Agriculture & Farmers Welfare: Notify minimum agricultural yield thresholds, promote capacity building among farmers, and support pilot projects to identify shade-tolerant crops.

• State Governments: Amend land-use policies to allow Agriphotovoltaics installation on agricultural land without requiring land reclassification, or recognise it as a mixed land-use category

• Financial Institutions: Structure loans based on PPA cash flows rather than land collateral

• Developers: Align land lease tenure with PPA duration (25 years) and ensure transparent and equitable farmer compensation

• Farmers: Engage in training and awareness programmes to strengthen local participation

Agriphotovoltaics represents a win-win opportunity to enhance India’s renewable energy capacity, augment farmer incomes, and promote a more inclusive and sustainable energy transition. It aligns closely with national priorities such as affordable and clean energy, land use optimisation, rural development, and the Viksit Bharat @2047 vision.

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