Farmers preferences for incentives on solar pumps: Evidence from a choice experiment in Punjab

Sukhgeet Kaur and Michael Pollitt

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Diesel and electric pumps have dominated groundwater irrigation in Punjab since the advent of intensive agriculture in 1966. National policies offer a range of subsidies for solar pumps, but there is limited empirical evidence of their effectiveness in promoting adoption. To address this need, a discrete choice method is applied to estimate the level of financial incentives for solar pumps preferred by farmers. The results show that enhanced subsidies combined with energy buyback have a significant impact on adoption decisions. The impact of contextual factors on the acceptance of grid-connected solar pumps is also estimated. Additionally, willingness to pay estimates and economic evaluations are improved with the use of flexible mixed logit formulation. The findings confirm that low subsidy limits the diffusion of solar pumps in Punjab agriculture. Further, the results from the statistical models indicate high public acceptance of individual solar agriculture pumps. We suggest that solar subsidies combined with grid purchases of surplus solar electricity can both reduce emissions and reduce the over-use of ground water, by indirectly introducing a price of electricity for water pumping.

Keywords: Renewable energy; solar pumps; feeder level solarization; energy water nexus; energy subsidies; irrigation water; electricity; groundwater depletion; Punjab (search for similar items in EconPapers)
JEL-codes: O13 O38 P48 Q1 Q20 Q25 Q42 Q58 (search for similar items in EconPapers)
Date: 2024-06-18
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-ene and nep-env
Note: mgp20
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Related works:
Working Paper: Farmers' preferences for incentives on solar pumps: evidence from a choice experiment in Punjab (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:2435

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