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CERTIFICATE
This is to certify that the thesis titled Market Potential for Solar Water Pumping
System and Cost Benefit Analysis of Diesel vs. Solar Pump has been
submitted by Kevin Kovadia towards partial fulfillment of the requirements for the
award of MBA in Technology Management with specialization in Operations and
Project Management. This is a bonafide work of the student and has not been
submitted to any other university for award of any Degree/Diploma.
Sign._______________
Internal Guide
Dr. Mercy Samuel,
Associate Professor,
Faculty of Management,
CEPT University
Sign._______________
External Guide
Mr. Nilesh Arora,
Partner,
ADDVALUE Consulting Inc.
www.avci-lean.com
2
UNDERTAKING
I, Kevin Kovadia, the author of the thesis titled Market Potential for Solar Water
Pumping System and Cost Benefit Analysis of Diesel vs. Solar Pump,
hereby declare that this is an independent work of mine, carried out towards partial
fulfillment of the requirements for the award of MBA Degree in Technology
Management with specialization in Operations and Project Management at Faculty
of Management, CEPT University, Ahmedabad. This work has not been submitted
to any other institution for the award of any Degree/Diploma.
June 2014
Place: Ahmedabad
ACKNOWLEDGEMENT
Many people have contributed to this research work. First and foremost, I express
my sincerest gratitude to my internal guide, Dr. Mercy Samuel, Associate
Professor,
Faculty
of
Management,
sincerely
thank
her
for
her
better
advisor
Furthermore my earnest thanks to Dr. Gayatri Doctor and Prof. Shreekant Iyenger,
who shared their knowledge during the entire course.
I convey my special thanks to all the interviewees without whom this research
work could not be termed as a research thesis. I also thank the solar water pump
manufacturers from whom I got details about farmers using solar water pump.
Their patience and valuable time devoted to my research work are highly
respected.
I also acknowledge the support & encouragement of my friends and colleagues
throughout the course of my work. Last but not the least; I convey my heartfelt
thanks to my family for their unwavering support and patience during the course of
my thesis work. Lastly, I offer my regards to all of those who supported me in all
respect during the completion of my thesis.
ABBREVIATION
SWP
MNRE
PVP
PV
Photovoltaic
AC
Alternate Current
DC
Direct Current
JNNSM
RKVY
GDP
GHG
Greenhouse gas
JGS
Jyotirgram Scheme
TABLE OF CONTENTS
Introduction.............................................................................................. 10
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.2
2.3
2.4
2.5
2.6
2.7
3.2
Primary Survey................................................................................... 34
6
Limitation of study............................................................................... 34
4.2
Scenario 0 ......................................................................................... 37
4.3
Scenario 1 ......................................................................................... 38
4.4
Scenario 2 ......................................................................................... 39
4.5
Scenario 3 ......................................................................................... 40
Conclusion............................................................................................... 42
Bibliography ............................................................................................. 43
Appendix ................................................................................................. 46
7.1
7.3
7.3.2
7.3.3
7.3.4
7.3.5
LIST OF FIGURES
LIST OF TABLES
Introduction
10
The Indian Pump industry has more than 800 manufacturers with worker strength
of over 40,000 producing about 5 million pumps annually. Indian market for pump
is estimated to be Rs.5000 Crores growing at an annual rate of 8% significantly
higher than the global rate of 4% in FY 12. The Pumps industry in India is more
than seven decades old. Though it has a turnover of Rs 5000 crore the size is not
even 10 per cent of the size of USA market. The industry meets 95 per cent of the
domestic demand.
Year
FY 2012
FY 2013
5000 Cr
8375 Cr
8%
12%
800+
800+
95%
95%
11
Water is becoming increasingly scarce in many parts of the world and thereby
limiting agricultural development. The capacity of large countries like India to
efficiently develop and manage water resources is likely to be a key determinant
for global food security in the 21st century. (K Palanisami, 2011)
12
It is estimated that 80 per cent of the freshwater in India is used for agriculture and
a major portion (70%) of this is based on groundwater irrigation. Nearly 88 per
cent of the total minor irrigation schemes in India are pump-based (MoWR, 2013).
Though pump sets are important for livelihoods, they also contribute to the GHG
emissions since a significant percentage of them rely on diesel.
The first phase of market development for solar PV water pumping in India goes
back to 1993-94.The programme of the Ministry of New and Renewable Energy
(MNRE), then known as Ministry of Non-Conventional Energy Sources, aimed for
deployment of 50,000 solar PV water pumping systems for irrigation and drinking
water across the country. MNRE provided the financial assistance required for
subsidizing the capital and interest cost of the solar pumps. (GIZ, 2013)
14
Some years ago there were PVP models on the market that operated with
batteries and a conventional inverter. However it was soon realised that the cost
savings on the pump did not make up for the overall substandard efficiency and
the higher maintenance cost due to battery replacements. Instead it became clear
that it is more economical to rather store water in a reservoir than electricity in a
battery bank. (EmCON, 2006)
15
people are facing severe power cuts. Because of this insufficient power supply for
the agriculture sector, output of the crop is reducing every year. This scarcity of
the power is creating major problems in small scale industries which logistics are
totally depended on power.
Solar power is one of the best nonpolluting energy sources. India being at best
geographical location receives nearly 300 to 320 days good sunny days. Among
the solar power sources, solar Photovoltaic (PV) is one the matured power
systems. If the industry develops and spread the Solar PV power packs to be
installed at different places especially on buildings (commercial, public and
institutional), industries, and also on various barren lands like hilly slopes, and
desert areas. (Somasekhar. G, 2014)
16
16
14
12
10
8
6
4
2
0
2011
Solar PV
2013
2015
2017
Conventional Power
2019
2021
supplied in sufficient time (6-8 hour supplied to farmers in Rajasthan India), the
cost of conventional energy, government subsidy in solar pumping systems and
it is difficult to extend the electric grid to every location where it is needed for
every farmer. (Shiv Lal, 2013)
17
18
= market potential
= total number of potential consumers
= average selling price
= average annual consumption
= market share (%) of consumers buying from firm A
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
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
3 http://www.sjsu.edu/faculty/watkins/cba.htm
19
The objective of this study is to analyze market potential of solar water pumps.
To conduct a comparative cost benefit analysis among Diesel vs. Solar Water
Pump.
20
Literature review
21
22
Since 2000, however, all available evidence suggests that the regions ground
water economy has begun shrinking in response to a growing energy squeeze.
This energy squeeze is a combined outcome of three factors:
a) Progressive reduction in the quantity and quality of power supplied by
power utilities to agriculture as a desperate means to contain farm
power subsidies;
b) Growing difficulty and rising capital cost of acquiring new electricity
connections for tube wells; and
c) An eight-fold increase in the nominal price of diesel during 1990-2007
(a period during which the nominal rice price rose by less than 50 %).
(Shah T. , 2008)
Several studies have indicated that the capital cost of solar is significantly
more expensive than a diesel powered system but this is not the case. Solar
pumps tended to replace larger capacity submersible pump and generator of
comparable or greater cost. This is a result of a common tendency to oversize
generators and pumps, a bigger is better mentality which persists not just
within communities but also within District Water Offices and agencies who
supply the equipment.
costs for generators that are not required for solar. (Brian McSorley, 2011)
25
water
pumping
Solar
Photovoltaic
(SPV)
theoretically
has an
distribution costs of grid-power to this market and the competitive position with
respect to diesel has improved with the recent rising oil prices. A surface
pump powered with a 1.8 kWp PV array can deliver about 140,000 liters of water
on a clear sunny day from a total head of 10 meters. This quantity of water drawn
has been found to meet the irrigation requirement of 5-8 acres of land by
using improved techniques for water distribution. (Amit Jain, 2012)
In rural and/or undeveloped areas where there is no power grid and more water is
needed than what hand or foot pumps can deliver, the choices for powering
pumps are usually solar or a fuel driven engine, usually diesel. There are very
distinct differences between the two power sources in terms of cost and reliability.
26
The solar pump has a unique cost structure with very high capital investment and
near-zero marginal cost of pumping. This makes it very similar to electric pump
owners who face high flat tariff but unlimited use of power (when available) at zero
marginal cost. This cost structure will drive away small farmers who want to
irrigate only their own little field; but it is ideal for potential ISPs. A solar -pump
driven groundwater economy will also promote competitive groundwater markets
with highly beneficial outcomes for water buyers who will gain even more with
buried pipeline distribution networks such as those obtaining in central Gujarat
(Shah, 1993).
Solar pumps offer a clean and simple alternative to fuel-burning engines and
generators for domestic water, livestock and irrigation. They are most effective
during dry and sunny seasons. They require no fuel deliveries, and very little
maintenance. Solar pumps are powered by photovoltaic (solar electric) panels and
the flow rate is determined by the intensity of the sunlight. Solar panels have no
moving parts, and most have a warranty of at least 20 years. Most solar pumps
operate without the use of storage batteries. Solar pumps must be optimally
selected for the task at hand, in order to minimize the power required, and thus the
cost of the system. (lorentz, 2008)
27
Currently, the agriculture category which uses power for irrigation pumps
contributes around 20 percent of the total power demand of India. The grid
power tariff to agriculture segment is heavily subsidized. The power supply
is staggered and the network performance inefficient in most cases.
30
In India nearly 81 million (32.8 per cent) households do not have access to
electricity (Census of India, 2011). Around 74 million rural households lack access
to modern lighting services (TERI, 2013, p. 380) and a larger proportion of the
population (around 840 million) continue to be dependent on traditional biomass
energy sources (IEA, Octomber, 2011).
There are about 21 million irrigation pump sets in India, of which about 9 million
are run on diesel and the rest are grid based (Amit Jain, 2012).
31
Barriers
Market
Related
Barriers
Regularity
Issues
Potential Solutions
Awareness Campaigns
Danger of Theft
Restricted Financial
Engineering
Single-Window Approach
Technology
Quality Assurance
Related
Lack of Local Manufactures
Barriers
Promotion of Local
Manufacturing
32
Research Methodology
33
35
250
250
250
250
250
500
1000
2000
63
63
63
63
1.7
1.7
1.7
1.7
10
10
10
10
26775
53550
107100
214200
Maintena
nce Cost
(C)
SWP
Cumulative
Cost W/O
Subsidy
(A+B+C)
SWP
Cumulative
Cost With
30% Subsidy
(D+B+C)
2500
491900
345080
2500
494400
347580
2500
496900
350080
2500
499400
352580
2500
501900
355080
2500
504400
357580
2500
506900
360080
2500
509400
362580
2500
511900
365080
10
2500
514400
367580
Year
Capital
Cost
Without
Subsidy (A)
Capital
Cost
With 30%
Subsidy (D)
Operating
Cost (B)
489400
342580
http://www.mypetrolprice.com/10/Diesel-price-in-Ahmedabad
36
4.2 Scenario 0
5hp Diesel Pump Costing (Scenario 0)
Diesel
Pump
Cumulative
Cost
Capital
Cost
(A)
Operating
Cost (B)
Maintenance
Cost (C)
30000
26775
5000
61775
61775
491900
345080
29453
5000
34453
96228
494400
347580
32398
5000
37398
133625
496900
350080
35638
5000
40638
174263
499400
352580
39201
5000
44201
218464
501900
355080
43121
5000
48121
266585
504400
357580
47434
5000
52434
319019
506900
360080
52177
5000
57177
376196
509400
362580
57395
5000
62395
511900
365080
10
63134
5000
68134
506725
438590
506725
514400
367580
Year
Total
Cost
(A+B+C)
Total
SWP Cost
Without
Subsidy
SWP Cost
With 30%
Subsidy
600000
500000
400000
300000
Diesel Pump
SWP without Subsidy
200000
100000
0
1
10
4.3 Scenario 1
5hp Diesel Pump Costing (Scenario 1)
Diesel
SWP Cost SWP Cost
Pump
Without
With 30%
Cumulative
Subsidy
Subsidy
Cost
88550
491900
345080
Capital
Cost
(A)
Operating
Cost (B)
Maintenance
Cost (C)
30000
53550
5000
88550
58905
5000
63905
152455
494400
347580
64795.5
5000
69796
222251
496900
350080
71275.05
5000
76275
298526
499400
352580
78402.56
5000
83403
381928
501900
355080
86242.81
5000
91243
473171
504400
357580
94867.09
5000
99867
573038
506900
360080
104353.8
5000
109354
682392
509400
362580
114789.2
5000
119789
802181
511900
365080
10
126268.1
5000
131268
933449
514400
367580
Year
Total
Cost
(A+B+C)
Total
933449
1000000
900000
800000
700000
600000
500000
Diesel Pump
400000
300000
200000
100000
0
1
10
4.4
Scenario 2
5hp Diesel Pump Costing (Scenario 2)
Diesel
Pump
Cumulative
Cost
Capital
Cost
(A)
Operating
Cost (B)
Maintenance
Cost (C)
30000
107100
5000
142100
142100
491900
345080
117810
5000
122810
264910
494400
347580
129591
5000
134591
399501
496900
350080
142550.1
5000
147550
547051
499400
352580
156805.1
5000
161805
708856
501900
355080
172485.6
5000
177486
886342
504400
357580
189734.2
5000
194734
1081076
506900
360080
208707.6
5000
213708
1294784
509400
362580
229578.4
5000
234578
1529362
511900
365080
10
252536.2
5000
257536
1786898
514400
367580
Year
Total
Cost
(A+B+C)
Total
SWP Cost
Without
Subsidy
SWP Cost
With 30%
Subsidy
1786898
2000000
1800000
1600000
Axis Title
1400000
1200000
1000000
Diesel Pump
800000
600000
400000
200000
0
1
10
4.5 Scenario 3
5hp Diesel Pump Costing (Scenario 3)
Operating
Cost (B)
Maintenance
Cost (C)
30000
214200
5000
249200
249200
491900
345080
235620
5000
240620
489820
494400
347580
259182
5000
264182
754002
496900
350080
285100.2
5000
290100
1044102
499400
352580
313610.2
5000
318610
1362712
501900
355080
344971.2
5000
349971
1712684
504400
357580
379468.4
5000
384468
2097152
506900
360080
417415.2
5000
422415
2519567
509400
362580
459156.7
5000
464157
2983724
511900
365080
10
505072.4
5000
510072
3493796
514400
367580
Year
Total
Total
Cost
(A+B+C)
Diesel
Pump
Cumulative
Cost
Capital
Cost
(A)
SWP Cost
Without
Subsidy
SWP Cost
With 30%
Subsidy
3493796
4000000
3500000
3000000
2500000
2000000
Diesel Pump
1500000
1000000
500000
0
1
10
Particular
250
250
250
250
250 Hour
500 Hour
1000 Hour
2000 Hour
10 Year
Year
Year
Year
Year
Year
2 Year
Year
41
Conclusion
From the cost benefit analysis of diesel vs. solar water pump, Conclusion is that if
your daily water usage is ranging from 1-2-4-8 hours than respective break even
time period is approximately 10-6-4-2 year for Without subsidy and with 30%
Central Government Subsidy it is 7.5 - 4.5 - 2.5 - 1.5 year as shown in Table 9.
So, Daily around 8 hour of 5hp solar water pump usage for 250 days per year led
to recover cost in 2 year with comparison of 5hp diesel pump. Higher usage of
water will reduce break even time period. Now, if your usage is less than 8 hour
per day than you can recover SWP cost by other ways. Like selling water to others
and use solar panel for getting electricity for home lighting and other home
appliances.
During primary research in discussion with solar water pump user, one reason why
farmer buy solar water pump. And this reason will not able to found in any kind of
secondary research. Normally, Farmer buy solar water pump mainly because of
two things.
diesel. The reason is 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 fathers land and fathers 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.
42
Bibliography
44
45
Appendix
46
File No.
&
Issue Date
0837/11/CSC/
SEC/Pump
27.12.2011
0861/11/CSC/
SEC/Pump
8.6.2012
43/2012/CSC/
SEC/Pump
8.6.2012
44/2012/CSC/
SEC/Pump
8.6.2012
93/2012/CSC/
SEC/Pump
8.6.2012
95/2012/CSC/
SEC/Pump
15.06.2012
115/201213/CSC/SEC/
Pump
11.07.2012
Pump submitted by
Pump
system
PV array
M/s Groundfos
Submersible
3HP DC
pump, Head
30 meter
M/s Rotomag
Centrifugal 2
HP DC surface
pump, Head 10
meter
M/s Groundfos
M/s Surana
Telecom &
Power Ltd,
Hyderabad
Submersible 0.5
HP DC pump,
Head 30 meter
M/s Groundfos
Model: SQF
8A-5
M/s PV Power
Technologies
Pvt. Ltd.,
Mumbai
Submersible DC
pump, Head 30
meter
M/s Sun
Pump, USA
M/s Moserbaer
(I) Ltd.
Submersible DC
Pump, Head 30
meter 2 HP
M/s Lorentz
Pump Model:
PS 1800
SJ8-7
M/s WAREE
Energies (P)
Ltd.
Submersible
2HP DC
Pump, Head
30 meter
M/s Lorentz
Pump
M/s Central
Electronics
Limited
Submersible DC
Pump, Head 30
meter 4.6 HP
47
113/201213/CSC/SEC/
Pump
08.08.2012
247/201213/CSC/SEC/
Pump
8.11.2012
10
244/201213/CSC/SEC/
Pump
9/11/2012
11
226/201213/CSC/SEC/
Pump
9/11/2012
12
248/201213/CSC/SEC/
Pump
27/11/2012
13
243/201213/CSC/SEC/
Pump
29/11/2012
14
249/201213/CSC/SEC/
Pump
M/s Lorentz
Pump
Model:PS1800
CSJ5-12
M/s WAREE
Energies (P)
Ltd.
Submersible
2HP DC
Pump, Head
30 meter
M/s Lorentz
Pump
M/s Jain
Irrigation
Systems Ltd.
M/s Shakti
Pumps (India)
Ltd.
M/s PV Power
Technologies
Pvt. Ltd.
Submersible
5HP AC deep
well monoblock pump,
Head 50 meter
M/s Kirlosker
Brothers Ltd
Submersible
3HP AC deep
well monoblock pump,
Head 50 meter
M/s Mono
Pumps Ltd.
M/s Topsun
Energy Ltd.
Centrifugal 3HP
DC Submersible
Deep Well
pump, Head :50
meters
M/s Bright
Solar Pvt. Ltd.
M/s Green
Brilliance
Energy Pvt. Ltd.
3HP DC
Submersible
mono-block
pump, Head 50
meter
M/s Duke
Plasto
Technique Pvt.
Ltd.
M/sPV
Powertech
Centrifugal 5HP
AC Submersible
Deep Well
Pump, Head :50
meters,
48
15
253/201213/CSC/SEC/
Pump
M/s Shroffs
Engineering
Ltd
Submersible
Deep well
pump, 3HP AC
Pump, Head: 50
Meters
29/11/2012
16
257/201213/CSC/SEC
/Pump
30/11/2012
M/s Grundfos,
Denmark
Centrifugal
Submersible 1HP
DC pump, Head:
30 Meters
17
115/201213/CSC/SEC/
Pump
24/12/2012
M/s Rotomag
M/s Central
Electronics
Limited
18
252/201213/CSC/SEC/
Pump
M/s Shakti
Pumps (I) Ltd.
Centrifugal
2HP DC
Surface
mono-block
pump, 10
Meters
Submersible
3HP AC
Pump,
50 Meters
M/s Lorentz
Pump
26/12/2012
19
247/201213/CSC/SEC/
Pump
04.02.2013
20
316/2013/CSC/
SEC/Pump
21.02.2013
21
254/201213/CSC/SEC/
Pump
M/s Jain
Irrigation
Systems Ltd.
M/s Rajasthan
Electronics &
Instruments Limited, 2,
Kanakpura Industrial
Area, Jaipur-3 02012,
Rajasthan
M/s Rotomag
M/s Rajasthan
Electronics &
Instruments
Limited
M/s Bright
Solar Pvt. Ltd
M/s Alpex
Exports Pvt.
Ltd.
Submersibl
e 2HP DC
pump,
50 Meters
Shallow well
3HP DC Pump
Head :20
Meters
Submersible
2HP DC
Pump,
30 Meters
49
309/201213/CSC/SEC/
Pump
05.03.2012
23
315/2013/CSC/
SEC/Pump
20.03.2012
24
276/2013/CSC/
SEC/Pump
07/03/2013
25
324/2013/CSC/
SEC/Pump
21/03/2013
M/s Lorentz
M/s Jain
Irrigation Pvt.
Ltd.
Submersibl
e 3HP DC
pump,
20 Meters
M/s Grundfos
Submersible 1
HP DC Deep
Well pump , 30
Meters
M/s Bright
Solar
Pvt.
Ltd.
M/s
Waaree
Energies
Pvt. Ltd.
Submersible
3HP DC, Deep
Well pump , 50
Meters
M/s
PUMPMAN
M/s
Waaree
Energies
Pvt. Ltd.
Submersible 5
HP DC Deep
Well pump , 50
Meters
50
51
52
53
54
55
Figure 9 Site location of Solar Water Pump User (1) near Hirapur Chokdi
56
Figure 10 Site location of Solar Water Pump User (2) near Hirapur Chokdi
57
Figure 11 Site location of Solar Water Pump User (3) near Hirapur Chokdi
58
Figure 12 Site location of Solar Water Pump User (4) near Palanpur
59
Figure 13 Site location of Solar Water Pump User (5) near Ghamij Village
___________
60