Solar Irrigation Pumps (SIPs) are used to pump (ground and surface) water to irrigate farm lands. In a country with a historical mismatch of energy supply and demand, and almost 120 million families dependent on earnings from agriculture (Prachi Salve, 2014), SIPs offer great prospects. Unlike electric and diesel pumps – dominating the market till today – SIPs have almost zero marginal costs. This leads to extra crop production at negligible costs and also generation of electricity when not being used for pumping. Due to almost zero emissions, it simultaneously addresses the issue of climate change hence bringing prosperity to the population at all levels.SIPs are a new phenomenon in India and due to the comparatively1 high capital costs, SIPs require subsidies to make them affordable for a farmer. Support in the form of subsidies has been given to around 15,000 farms in the whole country. By introducing solar pumps on a subsidy scheme in 2009-2010, Rajasthan has become the pioneer state of India. Since then numerous solar pumps have been deployed and farmers have gained experience with their usage. These farmers appear to be happy with the functioning of the pumps; 95% of the farmers, who gained enough knowledge to answer the question, say that the pump works better than their diesel or electric pump. A surprising finding is that the project cost per pump is getting higher while the pumps are getting cheaper. This means that the government is using more money to run the project. To find the reasons for the rising project costs and to find a way to decrease them, further research is needed. If the project cost could be decreased more pumps could be supplied with the same amount of subsidy.It was also found that the SIPs were not successful in replacing the electric and diesel pumps. The diesel and electric pumps had more horse power (hp) so were able to pump more water resulting in irrigation of more land in the same amount of time. Farmers expressed they could fully switch to SIPs when more powerful pumps were supplied.Because the present SIPs are off grid systems, it is not possible to sell the excess electricity that is not needed for pumping water. Because there are no marginal costs, there is no incentive for switching off the machines either. The consequence is excessive pumping of water leading to groundwater depletion. An important improvement would be to connect these pumps to the electricity grid. The possibility to earn some money with delivering energy would probably be a good reason to stop needless pumping.The subsidy program that was in place in Rajasthan had an 86% capital subsidy (the farmer had to pay only 14% of the price of SIP). With the available money only 10,000 pumps per year could be supplied (Dr. Dinesh Kumar Goyal, 2013). When the subsidy per pump is decreased more pumps could be deployed and it was shown that even with a lower subsidy getting a SIP will still be attractive.One of the points of improvement for a quick roll out of SIPs might be found in the way these pumps are financed. Pumps have a high capital cost and are currently financed by 70-90% capital subsidies of the government. The amount of total subsidy is limited and so with a high percentage of subsidy a small amount of pumps are deployed by this subsidy. These subsidies could be dramatically reduced when a loan/lease product would be put in place. Without a bank loan farmers are unable to pay the major part of the capital cost of the pump. Offering a bank loan is a win-win situation for the farmers and the people of India, represented by the government. With these pumps farmers are able to sell electricity to the grid and earn extra income or they can sell water to other farmers for a price below the price of current diesel pumping. With this income they could pay off the loan in 7 years and earn a reasonable income. The people of India will not only benefit by having to pay less for subsidies, they will also benefit from less greenhouse gas emissions as solar has almost zero emissions compared to mainly coal based electricity pumps and diesel pumps.SIPs supplying electricity can have a big effect on grid stability. Hence, in chapter 6 the question of grid stability was raised. Under what conditions can the Indian grid deal with a large amount of electricity injected from SIPs. India currently has 70% of the electricity produced from coal power plants while 3% comes from Nuclear power plants (Trading Economics, 2011a). These sources have a response time of several hours which is not quick enough to respond to fluctuations in the demand of energy by for example households, or a change in production by other sources, for example solar. The present sources should be partly replaced by quick response sources like the renewable sources and gas turbines. Currently 6% of the installed capacity is a gas power plant (Central Electricity Authority, 2015) but this percentage should be increased. Also other solutions should be implemented, such as developing storage of energy and more interconnections between grids of states and other countries.Since the idea is that SIPs would not use electricity from the grid anymore unlike electric pumps, 25% of electricity currently used from the grid by agriculture will be less. The current electric pumps only get electricity for certain hours a day and are used to balance the grid, only at times of low electricity use of other users, farmers will get electricity. When the electric pumps are replaced by SIPs that do not use electricity from the grid the balancing function that the electric pumps currently fulfil will no longer be present. Having no experience with SIPs connected to the grid so far, it will be difficult for the state load dispatch centres, which manage the grid, to schedule the expected load. Hence, pilots should be set up to find out how these pumps are used throughout the day so that in the future these loads can be predicted. In Gujarat the solar installed capacity could easily be a fivefold without having to invest in extra capacity of quick responsive sources, since enough installed capacity of gas turbines is already in place but currently not used. Extra investment would be needed in the grid in order to be able to transmit so much electricity over the grid from the (distributed) solar plants.Solar irrigation pumps, when implemented correctly, can not only lead to much cheaper irrigation for farmers but also less groundwater depletion and a source of extra income. Solar pumps can lead the way to more prosperity for the Indian people, but new guidelines and plans have to be made by the government to realise this potential. Without policy changes as described in this thesis SIPs benefit a small number of lucky farmers at the expense of the larger whole (wasting public money and groundwater).