Climate change could make solar irrigation more costly in Sub Saharan Africa

Key message: Solar-powered irrigation could help African farmers adapt to climate change by improving access to reliable water while reducing reliance on diesel. But new research finds that climate change may also make solar irrigation more expensive, as farmers may need larger systems to meet changing water and energy demands. Although this could narrow solar’s cost advantage over diesel, the impact is expected to be relatively modest. Continued declines in solar technology prices could outweigh these added costs, reinforcing the case for climate-informed investment, financing, and system design.

A new study by Hua Xie and Claudia Ringler of the International Food Policy Research Institute (IFPRI), supported by CGIAR Climate Action, examines how climate change could affect the economics of solar-powered irrigation in Sub-Saharan Africa. While the technology is increasingly promoted as an alternative to diesel-powered pumping, its performance is sensitive to changing climate conditions. 

Across much of Sub-Saharan Africa, the analysis suggests that climate change is likely to slightly increase the amount of solar capacity required to irrigate crops, raising the upfront investment required. At the same time, solar irrigation becomes less cost-competitive with diesel-powered pumps. In other words, farmers may need larger, more expensive solar systems than they would under current climate conditions, narrowing the cost advantage of solar-powered over diesel-powered water pumps.   

The reduced cost efficiency of solar, however, is unlikely to overturn the broader case for solar irrigation. In most places, the added costs are relatively modest and may well be eclipsed by the continuing decline in the price of solar technology. 

With only about four percent of cropland in Sub-Saharan Africa currently irrigated, expanding irrigation could support increased and more stable food production, but it also creates demand for more energy to pump water. This energy is, however, not currently available in most rural areas of the region. As a result, farmers mostly resort to diesel- or petrol-powered pumps. However, over the last 10 years, an alternative, breakthrough technology has become available: solar-powered electricity generation for irrigation, which is now cheap enough for better-off farmers. But the technology’s effectiveness is itself affected by climate change. 

Climate change increases the need for solar irrigation but reduces its economic advantage 

At first glance, the finding seems counterintuitive: Solar-powered irrigation has been identified as a key agricultural adaptation and mitigation strategy, and one that farmers want to pay for out of pocket given growing climate risks. Given the technology’s combined adaptation and mitigation benefits, carbon avoidance credits and other financial incentives are increasingly being developed across the region by governments, financial institutions and technology providers to help farmers overcome the initial investment costs.  

But the new paper finds that climate change reduces the cost effectiveness of solar-powered irrigation, while diesel-powered pumping fares better. 

Climate change can shift rainfall and crop water needs, altering both the amount of irrigation water that must be pumped and therefore the energy required for pumping. Meanwhile, heat, sunlight, and wind can affect the performance of photovoltaic panels. Climate change affects both sides of the solar irrigation equation: how much water farmers need to pump and how much electricity solar panels can produce. By considering both effects together, the study goes beyond earlier research that has largely focused on climate change’s effects on solar power generation alone.  

The researchers modeled groundwater-fed solar and diesel-powered irrigation across Sub-Saharan Africa under 15 climate projections for average conditions between 2050 and 2070. They focused on two measures: the solar capacity required to meet irrigation demand, a proxy for investment needs, and the “breakeven installed cost”, the maximum upfront cost at which a solar system remains cost-competitive with a diesel-powered system over its lifecycle. 

In most places, more solar capacity will be needed 

Across most of Sub-Saharan Africa, and under most climate scenarios, irrigation is projected to require more solar capacity, between nil to 30 percent across countries, driven by combinations of rising energy needs for pumping and declining solar-panel productivity. 

But the regional picture is far from uniform. Some countries in West and Central Africa see relatively sharp increases under certain projections, while parts of Eastern and Southern Africa, including Kenya and Mozambique, see declines in some scenarios. The increases also tend to be larger under higher-emissions pathways. 

That unevenness is worth flagging. Climate change does not affect solar-powered irrigation in a single, predictable way; its effects depend on local rainfall, crop water needs, aquifer conditions, and the climate trajectory itself. Investment decisions therefore need to consider how climate, water and cropping conditions interact in a particular location rather than relying on a single regional estimate. 

More solar capacity means a larger upfront investment. But cost at the point of purchase is only part of the equation. The other issue is whether solar still retains its economic advantage over diesel across the life of the system. 

The study finds that climate change generally reduces the cost advantage of solar irrigation relative to diesel. In most countries, it lowers the maximum installed cost per watt at which solar remains more cost-efficient than diesel. This means that actual solar installation costs would need to fall further for solar to retain its economic advantage. At the country level, changes in this breakeven threshold are usually within about 10 percent in either direction, although some places and climate scenarios see larger reductions. 

The challenge is greater when this is considered alongside changes in system size.  Across most of the modeled irrigable area, climate change increases the amount of solar capacity required while also lowering the cost at which solar pumps need to be on the market to compete with diesel over their productive lifespans. In practical terms, farmers would need larger solar systems that are also cheaper for solar irrigation to retain its cost advantage. 

This has implications for governments and development programs that provide financial incentives to help farmers acquire solar pumps. Upfront cost is already one of the main obstacles to adoption. Even a modest decline in solar pump performance could therefore have an outsized effect: fewer farmers will be reached as carbon markets and other investors will need to factor performance reduction into their credit schemes, increasing prices of solar pumps.  

Declines in solar panel prices to the rescue 

The study does not conclude that climate change makes solar irrigation uncompetitive. Rather, it suggests that the climate can no longer be treated as a fixed backdrop to investment decisions. Systems designed to operate for decades will have to account for the conditions they are likely to encounter, not simply those of the past. 

Even then, the projected decline in cost efficiency is generally modest. Solar technology itself has become dramatically cheaper. Global solar-PV costs fell by about 80 percent between 2010 and 2019. If that decline continues, lower equipment prices could more than offset the additional investment required under a changing climate. In other words, climate change may make solar somewhat less cost-efficient than it otherwise would have been, but continued global PV cost declines should more than offset climate change induced performance declines.  

As a next step, the researchers plan to engage carbon-market and other green-energy investors, exploring how these shifts in cost-effectiveness should shape credit schemes for solar-powered irrigation to ensure that both adaptation and mitigation benefits of irrigation can be maximized. 

Accounting for these shifts can help governments, investors and development programs make more realistic decisions about system sizing, financing and where solar irrigation is likely to remain most competitive. 

This work is carried out with support from the CGIAR Climate Action Program. We would like to thank all funders who supported this research through their contributions to the CGIAR Trust Fund: https://www.cgiar.org/funders/