Energy in farming: Unit economics
What it really costs to lift water onto a field
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.For a farmer, energy cost is mostly diesel, pumping electricity and fertiliser. In India, farm electricity is heavily subsidised, which removes the incentive to buy efficient pumps; solar pumps replace fuel cost with upfront capital.
Key costs
| Measure | Value | Note |
|---|---|---|
| Indian farm pump electricity | About 170 billion kWh a year (about 18% of national use, 2016 estimate)5 | From about 20.27 million electrified pump sets |
| Savings if all pumps were replaced | About 56 billion kWh and Rs 240 billion per year (estimate)6 | For about 21 million pump sets |
| Diesel share of irrigation pumping energy (world) | 74% share (2022)2 | Diesel dominates where grids are absent |
| Solar water pumps | 1.1 GW worldwide (2023), 94% in India; under PM-KUSUM 574,324 standalone solar pumps installed against 1.30 million sanctioned and 86,364 grid pumps solarised by November 2024 GW and number of pumps21516 | By late 2025 the scheme had reached about 27% of its 34,800 MW overall target |
| Energy use in ammonia for fertiliser | About 6 (calculated: 70% of 8.6 EJ) EJ a year (2020)4 | Ammonia uses about 2% of world final energy |
| Emissions from energy use in agriculture, forestry and fisheries | About 0.52 direct, 1.03 including electricity Gt CO2-equivalent (2019)23 | The paper's narrower on-farm total is 0.96 Gt; REN21 gives 0.9 Gt (12% of on-farm emissions) with a different scope |
Where the money goes
| Item | Share or amount |
|---|---|
| Electricity in agriculture's final energy (world, 2022) | 30.7%2 |
| Agrifood energy used after the farm gate | About 70%1 |
Worked example, cost to lift 1 cubic metre of water by 10 m (needs 0.027 kWh, calculated). Diesel: at an assumed Rs 90 per litre, about 10 kWh per litre and 13% set efficiency (assumed for a small, worn set), one litre lifts about 48 cubic metres, so about Rs 1.9 per cubic metre (calculated). Electric: at an assumed unsubsidised Rs 7 per kWh, an old 27% pump set costs about Rs 0.70 per cubic metre and a 55% star-rated set about Rs 0.35 (calculated). Solar: no fuel cost; the price is the panels and pump paid upfront. Because many Indian farmers pay a flat or zero tariff, the savings from efficient pumps go to the utility and state budget rather than the farmer, which is why replacement programmes are run by agencies such as EESL.
The FAO figure that agrifood systems use about 30% of the world's energy and REN21's 2.5% for agriculture do not conflict: the first covers the whole chain, including processing, transport, retail and household cooking, while the second counts only fuel and electricity used on farms.
Sources
- Energy: facts and figures FAO, 2025
- Renewables 2025 Global Status Report: Agriculture REN21, 2025
- Emissions of greenhouse gases from energy use in agriculture, forestry and fisheries: 1970-2019 (Flammini et al., Earth System Science Data 14, 811) Copernicus Publications (FAO authors), 2022
- Ammonia Technology Roadmap IEA, 2021
- Agricultural Demand Side Management (Ag-DSM) Program in India: Adopting technologies to boost efficiencies (white paper) (2016 data) ICF International, 2016
- Adding value: improving the cost economics and energy efficiency of pumps Indian Infrastructure, 2021
- Lok Sabha starred question 234 (PM-KUSUM progress, answered 11 December 2024, Annexure I) Ministry of New and Renewable Energy, Government of India, 2024
- With sunset date looming, PM-KUSUM meets only 27% of target Mercom India, 2025