India’s Clean Energy Transition’s Biggest Potential Lies in Agriculture

Brief Context

Published on: 24th December, 2025 The agriculture sector in India holds untapped potential to drive green energy revolution with over half of India’s population dependent on farming and rural livelihoods.</p

Source Content

Syllabus: GS3/Agriculture; Renewable Energy

Context

• The agriculture sector in India holds untapped potential to drive green energy revolution with over half of India’s population dependent on farming and rural livelihoods.

About India’s Agriculture & Energy Transition

• The agriculture sector in India contributes nearly 18% to India’s GDP and employs over 42% of the workforce.
• According to India’s Energy Statistics India (2025), agriculture accounts for approximately 17% share of electricity use, particularly for irrigation.
  • In several states, it constitutes over 20% of total electricity consumption.

• The agriculture sector in India is both energy-intensive and energy-deficient, heavily on diesel-powered irrigation pumps, and post-harvest losses due to inadequate cold storage and high processing infrastructure.
  • Many states provide free or heavily subsidized electricity to farmers, which has led to overuse and inefficiencies, including groundwater depletion.
• According to the International Labour Organization (ILO), India’s renewable energy transition could create 3.7 million green jobs, many connected to agricultural systems.
  • Each solar-powered cold storage unit represents a local enterprise requiring technicians, operators, logistics personnel, and community managers.

Issues With Agriculture Sector in India

• Hidden Cost of Food Loss: India loses 30–40% of its fruits and vegetables after harvest, happen during transport, storage, and processing which depend on reliable power.
  • A cold storage unit without power is useless; so are processing centers and preservation systems dependent on erratic electricity or costly diesel generators.

• Policy Fragmentation: Energy and agriculture policies are often siloed, limiting cross-sectoral innovation.
  • Schemes like PM-KUSUM, the National Solar Mission, and the PM Surya Ghar Muft Bijli Yojana have expanded solar access in rural India, but their full potential remains untapped due to fragmented policy design.
• Awareness & Training: Many farmers remain unaware of DRE solutions or lack the skills to operate and maintain them.
• Financing Gaps: Smallholder farmers often lack access to affordable credit for renewable energy technologies.
• Other challenges include high upfront costs for solar pumps despite subsidies; maintenance challenges in remote rural areas; and water overuse risk with solar irrigation.

Utilising Clean Energy in Agriculture

• Decentralised Renewable Energy (DRE) Solutions: These systems such as solar mini-grids, rooftop panels, and hybrid units reduce dependence on unreliable grids and diesel, cut operating costs, and enable community ownership of energy assets.
  • DRE can make rural food systems both resilient and sustainable by localizing power.
  • DRE solutions generate employment along the food chain, enhancing both livelihoods and food security.
• Transitions in Energy and Digital Innovation: India’s rural transformation is being shaped by digital platforms like ITC MAARS, offering AI-driven crop advice and market intelligence.
  • But, digital tools alone cannot preserve crops or stabilize prices, as they need energy infrastructure to act on information.
  • When renewable energy powers cold storages, dryers, and processing units, farmers can convert digital insights into tangible outcomes.
  • Together, smart energy and smart advisory systems create a powerful engine for rural resilience.
• Local Innovation and Solutions: Across India, farmers are developing low-cost, context-specific energy innovations. These include:
  • Solar dryers made from local materials;
  • Converted refrigerated trucks used as mobile cold storages;
  • Community-run solar processing units;
• Bridging Policy Silos: Agriculture and energy are managed by separate ministries and financing channels, resulting in missed opportunities.
  • Linking renewable energy initiatives with agricultural value chains could help bridge rural infrastructure gaps and cut post-harvest losses.
  • Effective coordination between these sectors is key to achieving climate-smart agriculture.

Government Policy & Framework

• PM-KUSUM Scheme (MNRE): It aims to reduce farmers’ dependence on diesel and grid electricity, lower emissions, and provide additional income through surplus energy sales.
  • Component A: Installation of 10,000 MW of decentralized ground-mounted grid-connected renewable power plants on barren/fallow land.
  • Component B: Installation of 2 million standalone solar agriculture pumps.
  • Component C: Solarization of 1.5 million existing grid-connected agriculture pumps.
• Voluntary Carbon Market Framework (Ministry of Agriculture): It encourages climate-smart agriculture while creating new income streams.
  • Register GHG mitigation projects (eg, renewable energy use, sustainable practices).
  • Earn carbon credit certificates under the Carbon Credit Trading Scheme.
  • Monetize eco-friendly practices, especially beneficial for small and marginal farmers.
• Energy Data Management in Agriculture (NITI Aayog): It highlights the need for accurate energy consumption data to design effective clean energy interventions.
  • It recommends inter-ministerial coordination and data-driven policy planning, and emphasis on monitoring DRE deployment in rural areas.
• Other Policy Initiatives:
  • Clean Plant Programme (CPP): Promotes climate-resilient horticulture through disease-free planting material.
  • Support for climate-smart agriculture under various centrally sponsored schemes.
  • Incentives for renewable energy adoption in rural infrastructure and agri-processing.

Way Forward: Towards a Resilient, Net-Zero Future

• The NITI Aayog ‘Energy and Agriculture Nexus Report 2025’ outlines potential synergies:
  • Bioenergy from crop residues could generate 20 GW of power, helping reduce stubble burning.
  • Agro-voltaics (farming under solar panels) can enhance land productivity by 60%, as piloted in Rajasthan and Tamil Nadu.
  • Green hydrogen from biomass and waste-to-energy plants are emerging as next frontiers for agri-linked clean energy.
• As India advances toward its 2070 net-zero goal, linking renewable energy with food systems needs to become a national priority. Key actions include:
  • Expanding solar integration beyond irrigation to post-harvest systems;
  • Offering targeted credit for farmer collectives;
  • Encouraging public-private partnerships;
  • Investing in green skills training;

Source: BS