Change everything so that (almost) nothing changes? Investigating the territorial distribution of solar energy subsidies in rural India

ABSTRACT

The current massive rollout of solar energy in India is primarily driven by private investments, with the federal and state governments facilitating sectoral investments with subsidies, preferential licensing and clearances, and corollary investments in transmission infrastructure. In this article, we draw on extensive fieldwork in the states of Rajasthan and Bihar to analytically characterise the solar rollout in contemporary India and advance the existing understanding of the territorial distribution of public solar energy funding. By attending to the multi-scalar modalities of resource allocation in the solar energy sector, our study contributes to an analysis of how public intervention has evolved in rural areas and in the power sector in a context of neoliberalisation and generates insights on the dynamics of distributive politics in contemporary India.

KEYWORDS:

• Solar energy
• India
• rural development
• distributive politics
• neoliberalism
• agricultural subsidies

Since the early 2010s, the Government of India has set itself ambitious renewable energy targets, such as 100 gigawatts (GW) of solar energy by 2022. Despite falling well short, the low-carbon transition in energy sources for its massive electricity sector has accelerated impressively. The latest target ambitiously aims for 500 GW installed renewable energy capacity by 2030, with solar to constitute 280 GW. Installed solar capacity has swollen from 6.7 GW in 2015/2016 to over 60 GW in 2023, primarily driven by private investments. The Indian federal and state governments have facilitated sectoral investments through various direct and indirect subsidies, preferential licensing and clearances, and corollary investments, notably in transmission grid expansion and to a lesser extent in distribution grid enhancement. The solar sector thus features massive financial flows. According to IISD and CEEW (2021, 31), India ‘has mobilized USD 42 billion in renewables since 2014’, whereas ‘an additional USD 500 billion will be needed by 2030’. This implies a dozen-fold increase in financing intensity within a comparable eight-year period, albeit in a mature and economically highly competitive sector. Moreover, these numbers continue to grow, based on media and industry reports about solar project investments. In this context, this paper aims to analytically characterise the solar rollout in contemporary India and to advance the existing understanding of the territorial distribution of public solar energy funding, by attending to the multi-scalar modalities of resource allocation in rural areas. While doing so, we generate insights on emergent forms and impacts of state interventions in rural India and in the energy sector in a context of neoliberalisation and massive deployment of renewable energy sources.

India is host to major, long-standing rural distress, anchored in a deep-seated agrarian crisis. Power subsidies have historically served as key state interventions in rural areas in India, to the tune of billions of dollars per annum. Solar photovoltaics (PV), long considered a ‘rural’ technology to provide unelectrified households basic temporary off-grid access to electricity while awaiting grid extension, has undergone dramatic cost declines and quality improvement in recent decades. Correspondingly, its perception has evolved to include large-scale solar parks – including ‘ultra mega power plants’ or UMPPs that were earlier only linked to coal thermal projects in India – and diverse grid-connected and so-called ‘open access’ solar projects, as well as captive solar plants based on power purchase agreements (PPAs). Solar power is now routinely posited as a potential long-term solution to some of rural India’s most pressing economic issues (Rahman, Agrawal, and Jain 2021). As other scholars have underlined, renewable energy sources are particularly well adapted to neoliberal governmentality, due to their modularity and reliance on common resources such as wind and sun (Degani, Chalfin, and Cross 2020). The electricity sector and current solar rollout policies thus combine to constitute a pertinent point of departure to analyse the evolution of public rural interventions, and more generally, the dynamics of distributive politics in a context of neoliberalisation in contemporary India (Kale 2014).

To do so, we analyse public funding schemes for solar rollout from multiple vantage points at multiple scales. We combine a top-down approach informed by grey literature and interviews with federal and state decision-makers and practitioners of solar policies, with a more ethnographic study of everyday allocations of these policies and funding schemes at the local level. This dual approach aids an understanding of the roles that different actors play to determine allocation and its social and political consequences. Our study draws on fieldwork conducted in two chronically impoverished states in Northern India – Rajasthan and Bihar – between 2016 and 2023. This includes over 200 interviews and dozens of observation visits to sites of solar plants and electricity infrastructure and governance, from which we draw narrowly for the specific thematic purposes of this paper. We focus on two case studies, which correspond to the main areas of public investment in solar energy in rural India. The first case addresses the development of large solar parks in Rajasthan. The second case concerns subsidies for off-grid solar agricultural pumps in both states.

This article comprises six sections. The next section introduces the context of India and the role of solar as an amplifier and a disrupter of existing dynamics in Indian rural areas and in the energy sector. The subsequent section presents our theoretical framework, which brings together two strands of literature, one on neoliberalism and its shape in contemporary India and one on the solar energy transition. We then offer a brief overview of our methodology and research methods. In the two following sections, we present and analyse each case study in detail. The last section discusses the combined implications of these analyses at multiple scales, providing insight into how the evolution of public intervention in rural areas and in the power sector impacts distributive politics in contemporary India.

Solar energy as a disrupting force?

India’s constitution defines electricity as a concurrent subject, which means that authority over the sector is shared between the federal and state governments. This has led Indian states to have very different paths to electrification and to power sector reforms (Dubash, Kale, and Bhavirkar 2018; Kale 2014). Rural electrification has, in particular, been historically uneven across India, as it was often heavily dependent upon states’ political economies and the extent to which agrarian interests were prioritized in the states’ development agendas (Kale 2014). These disparities have however narrowed somewhat from 2017 onwards, due to the Saubhagya programme launched and primarily funded by the federal government. According to official statistics, 32 out of the 33 Indian states have now reached 100% household electrification.¹

As Dubash, Swain and Bhatia (2019) underline, the strong connection between the electricity sector and India’s political economy is also related to its enmeshment with India’s welfare system and redistributive politics. Providing cheap electricity has long been a cornerstone of regional populist politics in India, especially with regard to farmers, as power subsidies have historically represented a major form of financial support from the states to the agricultural sector. As Kale (2014) describes, renewed interest in rural electrification in the 1960s, followed by the launch and implementation of the Green Revolution – which undergirded demand for water-intensive crops like wheat and rice – led most Indian states to offer extensive electricity subsidies to farmers to power irrigation pumps. These subsidies contributed to the mounting financial losses of the state electricity boards which justified power sector reforms in the 1990s and early 2000s (Kale 2014; Kumar 2022). These reforms led to increased participation of the private sector in electricity generation, the unbundling of state electricity boards into separate entities, the transfer of some of their activities to the private sector, and attempts to disconnect the electricity sector from regional politics. Yet, subsidies to the agricultural sector were never really challenged. Thus, according to a note prepared for the Indian Finance Commission (Ramaswami 2019), using data spanning 2015 to 2019, federal and state subsidies to the agricultural sector amounted annually to around 2,360 billion Indian rupees (28.75 billion USD), of which approximatively 900 billion Indian rupees (10.97 billion USD), i.e. more than 38%, comprised power subsidies. For more recent years, estimates are even higher. IISD (2021) calculates for instance that, for 2019, agriculture represented 75% of total electricity subsidies nationwide, or 19.3 billion USD. These agricultural electricity subsidies have often been partly cross-subsidized by industrial and commercial consumers at the state level (Dubash, Swain, and Bhatia 2019).

This significant flow of public money to the agricultural sector must be placed into the context of the important economic distress of rural India. The share of India’s agriculture in the national income has declined faster than its share in employment (Ramaswami 2019); tellingly, as rural households’ expenditure decreased by 8.8% during 2012–2018, it increased by 2% in urban areas (Jaffrelot and Thakker 2021). In a context where the need for irrigation and the use of groundwater have increased manifold due to the Green Revolution, power subsidies (as well as subsidies for fertilizers) are crucial to maintaining the agrarian economy. The number of irrigation pumps in India is estimated at 30 million, of which 70% are grid electrified (Thouthang and Kumar 2019). Power subsidies have however been criticized, as they mostly benefit rich farmers, who are connected to the conventional grid and can invest in tube wells (Le Mons Walker 2009).

With regard to India’s solar rollout, it is mostly driven by the federal government, which sets ambitious targets and defines the main subsidy schemes. These include schemes to promote large solar parks, rooftop solar on residential buildings and diverse solar solutions in rural areas (Table 1). Implementation is delegated to the states, leading to very diverse installed solar capacity across states: as of June 2023, Rajasthan had installed 17.8 gigawatts (GW) of solar, while installed solar capacity in Bihar was 203 megawatts (MW). Most of this capacity has been installed by private players, ranging from large conglomerates to small local vendors. This double dynamic of centralization (understood here as the increasing role of the central government in shaping the electricity sector at the state level) and increased private sector participation corresponds to the more general trajectory of the Indian power sector since the early 1990s (Dubash, Swain, and Bhatia 2019).

Table 1. Largest ongoing direct subsidy federal schemes for solar energy in India (2022).

Scheme	Objectives	Central government’s financial support
Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM-KUSUM)	Developing solar in rural areas (solar pumps, solarization of feeders, small solar plants)	340.35 billion INR (4.3 billion USD)
Residential Solar Rooftop Scheme (2019–2022)	Developing grid-connected solar rooftops in the residential sector and supporting distribution companies	118.14 billion INR (1.5 billion USD)
Solar Park and Ultra Mega Solar Power Projects Scheme	Developing large utility-scale solar parks	81 billion INR (1.03 billion USD)

Though the solar policy of the Indian government is to develop solar energy at different scales, in Rajasthan – as in India in general – solar rollout is mostly driven by large solar parks. This scalar bias, though not specific to India, is fostered by the political impetus to reach targets in a time bound manner (Sareen et al. 2023). Several policies at both federal and state levels facilitate the development of these large ground-mounted solar plants that cover huge swathes of land. As we will see, these policies include diverse tax exemptions and land allotment facilitations. The bias towards large-scale solar is also driven by state distribution companies, which consider some distributed solar solutions – such as rooftop solar plants – a potential threat to their financial stability and to cross-subsidization (Chatterjee 2022; Sareen and Kale 2018). High-paying consumers, such as wealthy urban households and commercial and industrial customers, are now indeed able to drastically reduce their electricity bills by installing off-grid or grid-connected rooftop solar. Distributed solutions for the agricultural sector, such as solar pumps, are conversely much more positively regarded by state distribution companies, and a cost-benefit analysis suggests long-term gains from agricultural household adoption (Muniyoor 2020). As with centralization and privatization, the dominant tendency for gigantism fits into the large history of the Indian power sector (Dubash, Swain, and Bhatia 2019).

With regard to overall investment, existing grey literature underlines a non-linear and complex process of transfer of public subsidies from fossil fuels to renewable energy sources (IISD and CEEW 2021). Very large subsidies for oil and gas, as well as for coal, indeed persist, while subsidies for renewable energy sources have doubled since 2014, yet are reducing or stagnating compared to 2017–2019. This is mostly due to the falling costs of renewable energy sources. Direct subsidies are provided by specific federal schemes (Table 1). Indirect subsidies and incentives, more difficult to map, include diverse tax exemptions and benefits (accelerated depreciation, lifting of interstate transmission charges, etc.) and financing and building of transmission and other infrastructures. States have their own policies and financial incentives, including allotment of government land. Some federal schemes also include mandatory financial participation from the states.

We argue that solar acts as both an amplifier and a disrupter of existing dynamics in the Indian power and agrarian sectors (Dubash, Swain, and Bhatia 2019). On the one hand, as we have underlined above, it contributes to further the centralization, privatization and tendency towards gigantism of the power sector. Large solar parks drive dynamics of land and resource dispossession that have historically affected the rural poor and have accelerated since the 1990s and the liberalization of the Indian economy (Le Mons Walker 2009). On the other hand, solar subsidies are disrupting state intervention in rural areas. Due to solar PV’s dramatic cost declines and quality improvement in the past two decades, the central and state governments now indeed consider solar energy a potential win-win solution that could provide financial relief to Indian farmers and increase investments in rural areas, while helping to phase out agrarian power subsidies. The policies implemented towards these objectives are led by the central government and embedded in the general evolution of the Indian state towards neoliberalism. As with any government interventions, there is a risk of reproducing socioeconomic inequalities if schemes are not carefully framed and implemented to ensure widespread access to the potential benefits. While public investments are mostly conceived to facilitate private investments, subsidy schemes in rural areas are based on individualization and increased surveillance of both beneficiaries and state agents (Mathur 2016), as we explore.

Neoliberalism and solar energy deployment

Our research straddles two strands of the literature: one on neoliberalism and its shape in contemporary India, and the other on various aspects of the solar transition. This combined literature helps us further the argument presented above. We first argue that the current neoliberal rationality prevalent in India is shaping the rollout of solar, by informing the conception and implementation of support policies and subsidy schemes. Second, we contend that the specificities of solar PV, including its modularity and simultaneous development with digital technologies for real-time communication across electrifying sectors and also given the current rapid decline in energy storage costs, open new avenues for the neoliberal transformation of the power and agrarian sectors.

Rather than a simple retreat of the state in the neoliberal area, neoliberalism leads to a diffusion of market values to all areas of life (Mathur 2016, citing Brown 2005; King and Le Galès 2011). The state remains a central actor in the economy, but now acts primarily as a ‘facilitator’ of private investments. We understand neoliberalism as a ‘pervasive form of political rationality’ (Collier and Ong 2007, 17; Mathur 2016) and a ‘mobile technology’, which does not correspond to a ‘fixed set of attributes with predetermined outcomes’ (…) but rather to ‘a logic of governing that migrates and is selectively taken up in diverse political contexts’ (Ong 2007, 3). It is therefore necessary to study the specific shape neoliberalism takes in the Indian context and to remain attentive to its potentially diverse forms across time, scales, and sectors.

Thus, as the anthropology of bureaucracy in India has shown, the changes brought to the state by the liberalization reforms of the 1990s and the advent of neoliberalism have been much more pronounced at the central level than at the state and local scales in India (Girard 2023; Gupta 2012; Mathur 2016). With regard to time, Nielsen and Nilsen (2022) propose a useful periodization of Indian neoliberalization, distinguishing between three main periods. The period between 1991 and 2004 was characterized by incremental rollback reforms, whereas the following period, from 2004 to 2014, was characterized by contradictory pulls between further rollback of the state (epitomized by the introduction of the Special Economic Zones Act in 2005) and rollout neoliberalism, illustrated by acts such as the Right-to-Information Act (2005) and the National Rural Employment Guarantee Act (2005). Akhtar (2022) thus proposes the term ‘redistributive neoliberalism’ to understand how the neoliberal state prevents farmers’ protests through subsidies and other forms of state support. As Nielsen and Nilsen (2022) and Akhtar (2022) show, in the current period from 2014 onwards, the neoliberal project has become deeply intertwined with the Hindu nationalist agenda of the current government. For Nielsen and Nilsen (2022), this period is also characterized by a more confrontational approach to protests and crony capitalism, to the benefit of large Indian private conglomerates (Jaffrelot 2018). Regarding the implementation of redistributive programs, existing scholarship underlines increasing distrust in the state bureaucracy throughout the different periods. The bureaucracy is widely considered inefficient and corrupt (Mathur 2016). Thus, calls for increased flexibility, accountability, efficiency, and transparency multiply (Mathur 2016; Qureshi 2018). Answers to these calls take several forms, such as strict timelines for implementation, diverse forms of surveillance, and novel data production mandates to ensure transparency (Mathur 2016; Girard 2023).

With regard to the power sector, Kumar (2022) proposes the term ‘fossil neoliberalism’ to describe the advent of market-based governance in the coal sector in India. The deployment of market mechanisms is aimed at expanding fossil fuel extraction, while producing revenues to maintain extensive electricity subsidies to the agrarian sector. To that end, the state often uses managerial innovations such as Special Purpose Vehicles to attract and derisk investments, as well as to depoliticise development (Kumar 2021). As research on global oil assemblages shows, contemporary extractive systems rely on a complex constellation of actors, with different interests and logics, which invites us to undertake a multi-scalar and precise analysis of the dynamics at hand in the energy sector (Kumar 2021; Watts 2021). Other scholars have proposed terminologies such as ‘new developmentalism’ or ‘neoliberal developmentalism’ (Adaman, Arsel, and Akbulut 2018; Chatterjee 2022), to describe a hybrid model, which assembles the values and rhetoric of neoliberalism (i.e. centrality of the market, efficiency, fiscal responsibility) and the objectives and dynamics of developmentalism (i.e. prioritized industrial and infrastructural development, gigantism, and centralization of power and control). We argue that neoliberal developmentalism in the Indian power sector plays out through a combination of four discernable, synergistic trends: (1) an increasing share of electricity production by private players, (2) a state which acts mostly as a facilitator, easing regulations and creating an investor-friendly context, (3) the growing influence of large private conglomerates over policy making, and (4) a tendency towards gigantism which harks back to the early years of Independent India.

The solar transition takes place in recursive relation with these trends. Existing scholarship has underlined the suitability of renewable energy sources to the neoliberal project (Degani, Chalfin, and Cross 2020), due to their modularity and reliance on common resources. This characteristic means that they can be deployed in a large range of places relatively regardless of context, which runs the risk of a race to the bottom in terms of unjust socioecological effects in the absence of adequate standards that safeguard existing land use practices and biodiversity. The current massive deployment of solar energy can be ascribed to cost reduction and technology improvements, supported by permissive solar policies and ambitious rollout targets. Scholars and practitioners have long been enthusiastic about the modularity and scalability of solar energy, due to its potential to reconfigure the spatial logic of energy systems towards decentralised production with ecologically and economically positive impacts (D’Souza 2019; Lovins 1976; Rumpala 2015). This would go along with an increased use of digital technologies to monitor energy production and usage. However, emerging scholarship shows a scalar bias towards utility-scale solar (Sareen and Haarstad 2021; Sareen et al. 2023). Numerous reasons explain this bias: economies of scale, the undue influence of incumbent powers, infrastructural path dependence, and legacies of embodied knowledge. In India, political discourses of ‘Solar India’ (Stock 2020) justify this scalar bias, promoting visions of grandeur with massive solar parks over more inclusive visions of distributed solar plants proximate to and co-owned by households and communities.

Utility-scale solar has been proven to lead to weaker socio-ecological benefits than decentralised solar energy (Sareen et al. 2023; Stock and Birkenholtz 2019), due to adverse impacts related to land dispossession, extractivism, and negative effects on local fauna and flora (Stock and Birkenholtz 2019; Yenneti, Day, and Golubchikov 2016). However, spatial concentration and large-scale clearances are more time-efficient to achieve ambitious solar rollout targets. Mindful of these dynamics, we consider both utility-scale and decentralised solar energy rollout in this paper. Next, we provide a brief overview of our methodology and research methods. Thereafter, two sections first examine large solar parks in the state of Rajasthan and then off-grid solar pumps in the states of Rajasthan and Bihar respectively. The sections also justify these choices of case studies.

Methodology and research methods

Our research draws on over 200 semi-structured interviews, conducted during 2016–2023 across numerous research projects and a plethora of diverse relevant actors. Fieldwork in both states was based on institutional attribution with anonymised interviewee identities, and exempt from approval based on applicable national ethics guidelines. Fieldwork featured a consistent focus on the political economy of solar energy, with attention to related aspects such as energy practices, social inclusion and equity, energy infrastructure, decision-making processes, and the multiple spatial scales of solar deployment. While we cannot detail all interview details here, and not all were equally relevant to this paper’s focus, this long-term, broad engagement informs our background understanding, choice of topic, and in-depth analysis within the narrower scope of featured case studies. We note that the actors we interviewed included public officials in electricity utilities and renewable energy agencies in both states, solar plant developers, investors and operators, energy sector regulators, representatives of solar energy associations, high-level and mid-level managers of major energy sector institutions, various citizen interest groups, non-governmental organisations, and energy consultancies, as well as residents and political representatives of diverse localities. We also undertook extensive desk study, which includes policy analysis, and ranges from coverage of peer reviewed literature to familiarity with considerable grey literature such as national and state solar energy policies, and broader developments in electricity generation and end-use.

Interviews varied from half an hour to three hours in length, with most about an hour long. We probed broad themes related to solar development, naturally modulating the focus based on particular expertise of interviewees and focus areas of research projects which ranged from solar energy transition politics to electricity distribution and energy access issues. These methods were complemented by numerous site visits in both states, including to the world’s largest solar park in Bhadla, Rajasthan. We also supplemented our contextual understanding through many informal interactions and discussions, also aided by both authors having spent several decades of cumulative time in India, both in and beyond the studied states, enabling deeper insights.

Case study 1: large solar parks in Rajasthan

In Rajasthan, large solar parks are primarily being developed in ‘left-behind areas’. By this term, we understand desert areas in Western and Northern Rajasthan, around the cities of Jaisalmer and Bikaner. Until the deployment of large solar parks, these areas had not been the object of much public or private investments, and were considered, as an interviewee described, ‘dark areas’. However, due to their ‘suitability’ for the development of large solar parks, they have become hot spots for public and private investments in recent years. As several interviewees remarked, the high solar irradiation rates and large amounts of currently unmonetised lands imply high scope for large solar developments in these tracts, where they can out-compete other parts of the state in terms of the value propositions for solar developers, provided continued government support in the form of solar licenses, land lease approvals, water access, and investment in transmission infrastructure.

Within these areas, the development of public or private large solar parks often takes place on land considered as ‘barren’, ‘un-cultivable’, or classified as ‘wasteland’ by the government (Baka 2013). These terms usually indicate land that is not being used for agriculture. It can be either government-owned or owned by private parties. Their characterization as barren or wasteland, however, does not mean that they are not being used. Recent work has underlined how government land is used by marginal farmers and pastoral populations, who are thus dispossessed of land and access to a diversity of resources (Stock and Birkenholtz 2019). During one of our field visits, residents complained that the boundary wall installed to secure the solar plant impeded the flow of a small stream, thus leading to the depletion of a lake to which local inhabitants used to bring their livestock. On other field visits, the disruptive effects of large cordoned off areas on established patterns of land use were visible as well – e.g. grazing land for camels (Figure 1).

Figure 1. Fence surrounding a solar park in Khimsar, Rajasthan (June 2022).

A fence in front of solar panels in Rajasthan.

In the case of private land, the massive deployment of solar parks leads to a disruption of the local economy by transforming the value of land and furthering the power of locally dominant actors who become enforcers of land dispossession (Singh 2022). A solar developer in Jaipur active in these western reaches of the state (June 2022) waxed eloquent that one needed to hire local groups of men to ‘go around on motorcycles at night’ to ensure that solar plants were not tampered with, juxtaposing the value-generating nature of this land enclosure as separate from its immediate context of poverty and implied potential lawlessness. A senior solar researcher and a land rights activist in Jodhpur both independently voiced similar assessments (July 2023), noting the systematic nature of large solar developers having bought up local strongmen near remotely located solar plants. A distribution company official in Jaipur, concerned with regulatory affairs (June 2022), offered the complementary observation that without securing the cooperation of local administration and locally powerful actors within a given locality, one could not expect to succeed with a profitable energy operation in rural Rajasthan. These observations point to the alienation of local populations from spaces of production owned and run from elsewhere.

Our fieldwork moreover shows how the benefits promised to local populations, such as better electricity supply or increased employment opportunities, often fail to materialize (also see Stock and Birkenholtz 2019). Solar parks indeed usually run with a very limited workforce. The electricity produced is mostly transmitted to load centres in Eastern and Southern Rajasthan, and largely sold inter-state, thus transferring benefits outside the local context, especially given the low tariffs that make solar competitive. A representative at the Rajasthan Electricity Regulatory Commission explained that the state distribution companies only procure adequate solar power to fulfil their renewable purchase obligation (RPO), with the majority of the 17 GW of solar energy installed statewide being sold to other clients, primarily outside the state. We thus observe a double dynamic, of both increased interest in previously ‘left-behind’ areas, and within these areas, on land that until now was mostly considered ‘barren’, and of extractivism, the exploitation of local resources (solar irradiation and land), with only marginal benefits in the form of corporate social responsibility schemes to local population groups. As a land rights activist remarked (July 2023), government postings to these western reaches of the state, once unpopular, are now in high demand, given the flood of investments and scope for lucrative bribes to government officials in charge of processing approvals.

What role do the central and state governments play in these dynamics? Both governments promote these large solar parks through various direct and indirect subsidies. The federal government’s scheme for Solar Park and Ultra Mega Solar Power Projects includes a subsidy of up to 2 million INR per MW, or 30% of the project cost. In the ‘plug and play’ model, public agencies or joint ventures are charged with acquiring the land, getting the clearances, and developing connectivity, transmission and other basic infrastructure (e.g. water and road access) (Stock 2020). The federal government has also waived inter-state transmission charges for renewable energy projects. This promotes the uneven territorial development of large solar parks, pushing developers towards areas of high irradiation and high land ‘availability’ as in Northern/Western Rajasthan. Other indirect subsidies include tax benefits for solar developers and non-financial measures, such as waived environmental regulations (no mandated impact assessments) and the development of transmission infrastructure. Rajasthan also supports this development through a reform of its bureaucratic process towards greater flexibility for developers (single-window clearance), easy procedures for the allotment of government land (including a project to develop a database of available land, and exemption from land ceiling act provisions for power producers) and, in some cases, customized packages for investors. The state’s lack of interest in buying the electricity produced by these large solar parks, and even its lack of facilitation of electricity acquisition by local private players, furthers the dynamic of extractivism. A state that struggled to produce enough electricity to meet its own demand some years ago has become a major inter-state power exporter, but ironically, the benefits of these developments primarily accrue to solar investors based elsewhere.

Large private developers and investors are the main beneficiaries of such policies. This can probably be partly explained by the increasing influence of some of India’s largest private conglomerates on energy policy (Jaffrelot 2018) to the detriment of smaller private players who get entangled in complex bureaucratic procedures (Sareen and Kale 2018). We are thus in a ‘classic’ neoliberal perspective of the role of the state, where public investments aim to facilitate private investments (Shokrgozar and Girard 2024). This is accompanied by land and resource dispossession for the rural poor and by the grabbing of green funding by very large private players – thus leading to a regressive allocation of public subsidies.

Case study 2: off-grid solar pumps in Rajasthan and Bihar

As we have underlined above, power subsidies represent an important part of state support to the agricultural sector and weigh heavily on state distribution companies’ finances. In a context of deep-seated agrarian crisis, and more generally, rural distress, these subsidies are difficult to reform or phase out. The PM KUSUM scheme, which promotes and subsidizes solar plants, solar pumps and solarization of electric agricultural feeders in rural areas, is promoted as a potential solution to both rural distress and state distribution companies’ financial difficulties. Launched in 2019 by the central government, with a budget of more than 340 billion Indian rupees (approx. 4.3 billion US dollars), it has three objectives. First, it aims to promote solar rollout in rural areas and in the agrarian sector, and to simultaneously expand irrigated areas (IISD 2021). Second, it aims to lower costs for farmers (as they would not have to pay for electricity or diesel anymore) and to provide them with potential new sources of revenue (as they would be able to sell the surplus electricity produced by their solar plants or pumps). Third, it envisages reducing financial pressure on state governments, as ‘state governments are expected to reduce their agriculture power subsidy bills’ (Rahman, Agrawal, and Jain 2021). Some studies estimate that the PM KUSUM scheme could lead to a ‘total saving of US$7.6bn in subsidies’ (Shah 2021).

Whereas power subsidies for agriculture are mostly borne by the states, the PM KUSUM scheme is based on an important financial investment by the federal government. Thus, in the medium term, the scheme could lead to a transfer of direct subsidies in the power sector away from subsidized electricity tariffs and towards the deployment of solar (i.e. ‘swapping’) and to the transfer of some of the financial burden to the central government (IISD 2021). In the long term, the scheme could lead to a re-balancing of power subsidies between different economic sectors and thus to reduced tariffs for the commercial and industrial sectors, which traditionally cross-subsidize lower agrarian and domestic tariffs. India’s solar pump deployment has attracted attention in research for its promise based on initial rates (Lefore, Closas, and Schmitter 2021). In this paper, we focus specifically on component B of the PM KUSUM scheme, which concerns the installation of two million off-grid solar pumps in non-electrified fields all over India. It follows previous schemes for off-grid solar pumps, such as one we observed during fieldwork in Bihar (four field stays of ten to fifteen days each, conducted between November 2018 and September 2019).

These field stays provided the opportunity to liaise with a team from the State Renewable Energy Development Agency. Working at the district level, their mission included promoting subsidized solar pumps for the agricultural sector within a scheme called Bihar Saur Kranti Sinchai Yojna (BSKSY) and overseeing the implementation of subsidized projects. The team, comprising a graduate engineer (usually in charge of two or three districts), a junior engineer (in charge of the district) and two technicians, was under heavy pressure to meet quantified targets (number of pumps installed per year). They however had access to very limited funds to attain these objectives. For instance, they had a very limited budget for travel in the district, which prevented them from organizing regular public events in villages. As such, they tended to improvise solutions to meet targets. This would include contacting farmers that they already knew, or making their colleagues benefit from the scheme. In the end, they installed a very limited number of pumps per year (17 in 2016–2017 for instance) (Figure 2) (Durga et al. 2016).

Figure 2. Inauguration of a solar pump in Bihar (December 2018).

People sitting and standing in a agricultural field in front of a solar pump which is being inaugurated.

Our fieldwork in Rajasthan in 2022 confirmed this rather slow development of solar pumps before PM KUSUM. According to one interviewee from the department of horticulture, around 40,000 off-grid solar pumps were installed in Rajasthan between 2008 and 2019. This number has doubled since PM Kusum launched in 2019, albeit installations under the scheme in Rajasthan only began in 2021. In Rajasthan, PM Kusum component B had led to the installation of 23,844 pumps by end-November 2021, representing a budget of around 4.2 billion Indian Rupees (53 million USD), equally shared by the federal and state governments (Interview, 09/06/2022).

Despite this success and important subsidies, the price of the solar pumps often remains beyond the financial capacity of many small or marginal farmers. This was confirmed by the central Ministry for New and Renewable Energy, which indicated working on solutions with banks and farmers’ cooperatives. Depending on the wattage of the pump, farmers have to pay a share between 72,000 and 269,000 INR (912–3,407 USD). Rajasthan offers an additional subsidy for farmers from Scheduled Castes or Tribes, which reduces the farmer share to 27,000 INR (342 USD) for the smallest capacity pump (Interview, 09/06/2022). However, the department of horticulture, which oversees scheme implementation in Rajasthan, admitted that they still have difficulty reaching farmers from these marginalized groups. Reports have also indicated that women farmers have more difficulty accessing the scheme, as they often do not own the land (IISD 2021). In Bihar, interviewees mentioned that the predecessor scheme primarily benefitted larger landowning farmers who had access to loans. A study conducted by the Shakti Sustainable Energy Foundation (2018) indicated that marginal farmers represented only 16% of the beneficiaries of the former off-grid solar pump program, despite constituting a large majority of all farmers in the state. The same study concluded that Rajasthan was fairing much better, as 72% of beneficiaries were small and marginal farmers, while they represent around 58% of all farmers in the state (Shakti Sustainable Energy Foundation 2018). An interlocutor from the Horticulture Department of Rajasthan indicated that 50 to 60% of applications of PM Kusum component B emanated from small and marginal farmers. Additionally, in Rajasthan, given free annual supply of 2,000 units of electricity to farmers as of 2023, many lack a reason to invest in lowering their electricity bill, an instance of low policy coherence, flagged by an expert at the Central Arid Zone Research Institute in Jodhpur.

The difficult access of less well-off farmers and farmers from marginalized groups to the scheme was further reinforced by the application process, which requires active engagement from potential beneficiaries. Farmers must submit applications through an online portal, which requires digital literacy and internet access. The use of online applications is justified by a need to increase ‘transparency’ on the subsidy allocation process. This is also visible in the intricate inspection process implemented in Rajasthan, which includes a visit by two or three employees of the government, in the presence of the farmer and of a representative of the company which installed the pump. A picture of the farmer next to the pump needs to be uploaded, as well as a report signed by all participants. Only then are 90% of the funds released to the company. After a month of the pump running successfully, the remaining 10% is released to the company. This imperative of transparency also impacts the farmers. The subsidized solar pumps have a remote monitoring system, which shares data with the state and federal governments, such as location, energy production, and water discharge. Our interviewees explained that the data sharing system is required to monitor scheme implementation, ensure that the pump is working correctly, and that it is not sold on by the farmer within a statutory period. It has nonetheless created a new mode of state surveillance down to the farm pump level. These layers of bureaucracy also introduce scope for delayed payments from the government, and delayed implementation when approvals are pending, which can make beneficiaries and intermediaries more skeptical. A local bureaucrat charged with implementing the scheme at the district level in Rajasthan thus indicated that, due to vacant posts in his department, he was solely in charge of meeting an annual target of several thousand off-grid solar pumps per year in his district.

In both the PM Kusum Component B and the BSKSY schemes, the central Ministry for New and Renewable Energy is charged with empaneling companies for each state. Thus, farmers are not free to choose the brand of their solar pumps, but rather must choose from a limited number of private actors. Scholarship shows that this can lead to problems in after-sales services and to a concentration of the market in the hands of a few players (Durga et al. 2016). It also leads other non-empaneled vendors to bypass the scheme, by convincing farmers to invest in a solar pump without applying for the subsidy. According to the farmers we interviewed, different arguments were used to convince them not to apply and thus pay the full market price, such as delays in implementation, and talk of corruption. One of our interlocutors from the state implementing agency in Rajasthan also indicated that empaneled vendors were reluctant to install pumps in northern and western parts of the state, as the cost of transportation reduced their margins.

Finally, off-grid solar pumps are installed in fields that have not been electrified. In electrified fields, the PM KUSUM scheme provides for the solarization of existing pumps or of feeders. Durga et al. (2016) observe that off-grid solar pumps are often used as ‘back-up’ pumps, thus not displacing the use of diesel. We can hypothesize that as richer, more dominant farmers in areas where fields are not electrified move toward off-grid solar pumps, the pressure on the distribution company to electrify agricultural fields reduces, as off-grid solar pumps are considered a long-term solution to the absence of grid connection. This could weaken the position of less well-off farmers, who remain dependent on very expensive and polluting diesel pumps or on the sale of water by well owners. There is thus a potential dynamic of regressive individualization of state intervention to the detriment of households that need it the most.

As we have seen with large solar parks, we observe an unequal allocation of green funding, which here primarily benefits larger landowning farmers to the detriment of less well-off farmers, farmers from marginalized groups and/or farmers situated in peripheral areas. We observe similarly ‘classic’ yet different elements of neoliberal policies: promotion of fiscal responsibility by ‘swapping’ subsidies, increased surveillance of both beneficiaries and state agents, and a strong emphasis on ‘transparency’ without contextual sensitivity to the intricacies of implementation (Mathur 2016).

Change everything so that (almost) nothing changes

What can these two case studies tell us on the evolutions of public intervention in rural areas and in the power sector and on the dynamics of distributive politics in India? First, our paper contributes novel insights on how the rollout of solar PV amplifies existing dynamics in the Indian energy sector at different scales in a context of neoliberalisation. We can underline three major trends based on the preceding empirical analysis. First, the rollout is modulated by and in turn strengthens a thrust towards centralization, understood here as the increasing role of the central government in shaping the electricity sector at the state level. The urgency of climate change has led to very ambitious renewable energy targets defined by the federal government, which also provides the main source of funding to attain these objectives. Its involvement goes well beyond the promotion of large solar parks, extending to large amounts of public subsidies for distributed solar energy systems in rural areas, such as solar pumps, and in the residential sector, which are disrupting the finances of the state electricity distribution companies. Second, the scalar bias towards utility-scale solar amplifies the historical dynamics of the power sector in India towards extractivism from ‘left-behind areas’ and gigantism. ‘Left-behind areas’ that have been the object of little or no investment, such as the desert areas near the cities of Jaisalmer and Bikaner, have now become hotspots for public and private investments. These investments are able to ride roughshod over informal or unrecognized land uses that draw upon, e.g. usufruct rights. In states like Rajasthan, fauna and flora, such as the khejri tree, provide important ecosystem services and play emergency support functions in famines and droughts. Land use changes brought about by the development of large solar parks, and their correlated adverse impact on biodiversity, can have unforeseen and calamitous consequences for local inhabitants. Third, we note a trend towards increased privatization. Historically, the private sector has played an important role in electricity production in India. In the solar sector, the importance of the private sector is attaining historical proportions. This primarily benefits very large private players, to the detriment of smaller and mid-sized players, especially where utility-scale solar is concerned, as projects run into hundreds of MW to be competitive under political economic realities. The state remains very present, but public investments are conceived to facilitate private investments. This development is reinforced by the increased influence of large private actors over policymaking in the energy sector (Jaffrelot 2018).

Second, our paper generates insights on emergent forms and impacts of state interventions in rural India, in contexts where solar PV is increasingly promoted as a technological solution to the agrarian crisis and rural distress. As we have shown, the disruptive potential of solar PV on redistributive politics in India is evident, be it in terms of actors, spaces, or financial flows. Despite this potential, in its current mode of implementation, solar PV amplifies, rather than disrupts, existing social and economic inequalities in rural areas. Public funding for decentralised solar solutions targeted at farmers tends to be less accessible to farmers from marginalized groups and peripheral areas, while ironically, it is peripheral areas that utility-scale solar parks are taking over through long-term leases, often involving agricultural land leased for up to 30 years at low cost with non-disclosure agreements written into the contracts as per our own field observations in Rajasthan. As mentioned earlier, these inequalities have also been demonstrated with respect to power subsidies. This is a missed opportunity to provide more socially equitable state support to the agrarian sector. Solar subsidy schemes are moreover embedded in the general evolution of the state in India towards neoliberalism. The systematic promotion of solar pumps as fiscally responsible in the medium- to long-term is based on individualization and increased surveillance of both beneficiaries and state agents (Mathur 2016). This is facilitated by the advent of digital technologies that allow the sharing of a large amount of data on the allocation process and the subsidized items with the state and central governments. When it comes to support policies for large solar, they undergird land grabbing (Levien 2018) and the acquisition of ‘green’ funding and incentives by large private actors.

Existing work has underlined potential solutions to this unequal allocation of funding in the solar energy sector, such as reinstituting inter-state transmission charges for renewable energy sources (Rahman, Agrawal, and Jain 2021) and promoting alternative models of ownership for solar pumps (solarized feeders, and collective ownership) (IISD 2021; Thouthang and Kumar 2019). While such alternatives are worth espousing, our empirical analysis points to the troubling reality that it is difficult to build equity into solar rollout in contexts that are characterized by numerous inequalities and a neoliberal trend. Despite the promise that solar energy holds for a multi-scalar, decentralized energy system with wider ownership and benefit flows, the rollout in poor rural India emulates the chief characteristics of its historical energy system: one with centralized control where benefits accrue to elite groups even as marginalized local inhabitants haplessly yield to dominant players of the day. The advent of competitive solar energy has shuffled who these players are in the energy sector going forward, while leaving the underlying logic of neoliberal developmentalism relatively untouched. The result is a low-carbon transition that is singularly non-transformative in terms of distributive politics, wherein elites coopt the benefits of solar subsidies and incentives. This is not to decry the progress that has been made – indeed there is some scope for cheer – but to caution against uninformed optimism that solar rollout will address problems of inequity.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The authors are grateful for funding from the Research Council of Norway (project grant 314022, Accountable Solar Energy TransitionS, ASSET), the European Union’s Horizon 2020 programme (grant agreement 101032239) and the Agence Nationale de la Recherche (project grant ANR-17-CE05-0002, Hybridelec).

Notes on contributors

Bérénice Girard

Bérénice Girard is a researcher with the French National Research Institute for Sustainable Development (Institut de Recherche pour le Développement, IRD) and a member of the Centre d’études en sciences sociales sur les mondes africains, américains et asiatiques (CESSMA). Her research sits at the crossroad of environmental sociology, sociology of the State and South Asian Studies. Her work has focused on the management of the Ganges River, on energy changes in urban and urbanizing localities of Northern India and on the transition to solar energy in India. ORCiD: 0000-0002-7932-394X

Siddharth Sareen

Siddharth Sareen is a Professor in Energy and Environment at the Department of Media and Social Sciences, University of Stavanger, and a Professor II at the Centre for Climate and Energy Transformation, University of Bergen. He coordinates the Sustainability Transformation programme area at the Faculty of Social Sciences in Stavanger, with a portfolio of research projects worth over €12 million. His research focuses on the governance of energy transitions at multiple scales, in diverse contexts, and within and across a range of sectors, such as resource extraction, electricity generation, distribution and end-use, and urban transport. He teaches on a Master programme in Energy, Environment and Society, is a member of the Young Academy of Norway, and serves on the Empowered Futures Research School Board. ORCiD: 0000-0002-0826-7311

Notes

1. According to the Saubhagya dashboard, the state of Chhattisgarh has a household electrification rate of 99.67%. Other sources, such as the National Family Health Survey, indicate a lower rate of household electrification at the national level (around 96.8% in 2020/2021).