Financial viability assessment of agrophotovoltaic systems in India

The feasibility of Agrophotovoltaics (APV) has been studied by several researchers in terms of, design considerations, and implementation with different crops. However, the economic feasibility of the installation of elevated solar photovoltaic panels in diverse crops in India needs to be assessed for wider adoption. Hence, in the current study, the financial implication of APV by growers/farmers through cash flow analysis, and calculation of financial indicators like Internal Rate of Return (IRR), Debt Service Coverage Ratio (DSCR), and Net Present Value (NPV) were assessed. The input data for the analysis was collected during 2024 using the past two years’ average numbers for India from the Economic Survey published by the Ministry of Finance, Government of India. Findings inferred that the financial performance of APV projects is dependent on several variables such as the effect on the yield, coverage of solar panels, feed-in tariff, cost of debt, etc. Therefore, sensitivity analysis with these variables has been conducted to highlight the areas where intervention will be most effective in facilitating large-scale implementation in India. The results demonstrate that the concept is financially viable and can potentially help in the income diversification of various segments of the farmers. However, the major challenge may be the high upfront equity investment, and also financial performance is highly sensitive to the price of power that is exported to the grid.