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

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  • Kaur, S.
  • Pollitt, M. G.

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.

Suggested Citation

  • Kaur, S. & Pollitt, M. G., 2024. "Farmers preferences for incentives on solar pumps: Evidence from a choice experiment in Punjab," Cambridge Working Papers in Economics 2435, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2435
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    More about this item

    Keywords

    Renewable energy; solar pumps; feeder level solarization; energy water nexus; energy subsidies; irrigation water; electricity; groundwater depletion; Punjab;
    All these keywords.

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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