MNRE planning Central scheme to offset 25-30% higher cost of AgriPV plants

New Delhi: The Ministry of New and Renewable Energy (MNRE) plans to launch a Central sector scheme to cover the extra cost of agri photo-voltaic (PV) plants. These plants cost 25-30 percent more to set up than conventional ground-mounted solar projects, MNRE Secretary Santosh Kumar Sarangi said on Monday.

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Agrivoltaics, also known as agri-photovoltaics or AgriPV, involves co-locating solar power generation and agricultural activities on the same land. Farmers can continue cultivating their fields while the panels above them generate electricity.

Sarangi was briefing reporters in the capital ahead of the AgriVoltaics World Conference 2026. He said the ministry is working out the details of the support scheme with the Ministry of Finance, including how states could be incentivised to develop different AgriPV models. One question is still open. The ministry has yet to decide whether the support will come as an upgrade under PM-KUSUM, the existing scheme for farm-level solarisation, or as a standalone initiative.

“To nudge all the states and to provide them with some kind of an initial incentive, we are planning for a central sector scheme which will support it. And hopefully, we’ll make it part of one of our existing schemes as and when those schemes are getting revised,” Sarangi said.

Civil works behind the 25-30% premium

The higher cost stems from how the plants are built. AgriPV combines solar power generation and agriculture. In such systems, solar panels are mounted three-to-five metres high on tall frames, leaving enough space underneath for farm work. That structure is what pushes up the bill, according to Sarangi.

“In AgriPV, due to the tilted structure, the additional cost is of the civil infrastructure. This makes projects 25-30 percent more costly as compared to conventional ground-mounted solar. So, our objective will be to meet this cost gap under AgriPV. The broad idea is to nudge the states to take it to scale so that it becomes competitive over time and tariffs become commercially more viable,” he said.

The gap also shows up in the price of power. Sarangi said electricity from AgriPV plants could cost an estimated Rs 3.20 to Rs 3.30 per unit. By comparison, a decentralised KUSUM installation produces power at Rs 2.80 to Rs 3.00 per unit, he said.

India’s AgriPV potential ranges between 1 terawatt and 2 terawatts. These plants, however, require 16 percent more land.

States key to 5 GW of capacity

Sarangi said around 5 GW of AgriPV capacity may be possible over the next three-to-four years. Whether that materialises will depend on how keen state governments are to notify feed-in tariffs for such plants, he said. Notified tariffs would give farmers and cooperatives weighing an investment greater certainty, which is why the states have a crucial role in scaling up the model.

Several states have already shown interest, he said, including Odisha, Madhya Pradesh and Maharashtra. Sarangi also said regions in moderate solar irradiance zones would be more receptive and better suited to AgriPV. He named Madhya Pradesh, Odisha, Chhattisgarh, West Bengal and Uttar Pradesh as examples. In these states, he said, energy can be generated without compromising food security requirements.

The plants need not be owned by a single type of investor. According to Sarangi, the model could be implemented through individual farmers, farmer-producer organisations (FPOs), cooperatives or groups of farmers. Private developers leasing agricultural land on a long-term basis are another option, he said.

Vegetables, fruits fare better under panels

The ministry has carried out multiple successful AgriPV pilots in different parts of the country with the Indian Agricultural Research Institute (IARI), Sarangi said. The goal, he said, is to ensure India’s food security and energy security needs can be effectively blended in future.

“Pilots done in association with IARI have carried out an exhaustive mapping of crop metrics which are suitable in different agro-climatic zones. We have identified what kind of crops are more suitable in these zones. Largely, fruits and leafy vegetables are responding very positively to AgriPV,” he said.

Staple crops appear to be a weaker fit. Sarangi said initial IARI assessments suggested vegetables, horticultural crops and floriculture were more suitable for cultivation under solar panels than rice, wheat and sugarcane. He was careful to call the findings preliminary.

“More research needs to be done, but initial results suggest that it is more suitable for vegetables, for horticultural crops, for floriculture,” he said.

Further studies are needed given India’s diverse agro-climatic conditions, he added. Building on IARI’s research, the ministry is also working on crop-specific recommendations.

Discom talks, policy document in the works

Procurement is the next piece. Sarangi said the ministry plans to discuss different policy options with distribution companies (discoms) to understand how they can facilitate buying power from farmers who run AgriPV plants. MNRE is already working on a policy document on the technology, he said.

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The ministry is also working with Germany on agrivoltaics, since the country was among the early adopters of the technology, Sarangi said. He added that it was too early to comment on a possible joint project with Japan.

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