It is a Tragedy Of The Commons problem.
Solar just happens to be an enabling technology. Other technologies that brought cheap power to those areas would have done the same thing, e.g., wind or very cheap diesel (biodiesel?) would have the exact same effect if they happened to arrive first. Putting Solar in the headline and as the culprit is a truly cheap shot.
The real problem is that now that power is cheap, it is to everyone's individual advantage TODAY to pump more, but everyone's disadvantage tomorrow when the groundwater reserves run dry. Classic Commons problem, and it's screaming to the inevitable result. The only solution is some way to monitor and regulate the draw from the groundwater.
> The only solution
But is it really a problem, from everyone's perspective?
Because, if water is scarce, then, those with money become even more important and wealthy -- they're the only ones who could afford really deep pumps? And now they can sell the water, for more and more money. What's not to like about that?
None of this should be seen as a condemnation of solar power, says Balasubramanya. “The fundamental problem is not the solar technology itself.” Whatever the technology, “if the cost of pumping is zero, then people will pump unless some restriction is put on them.”
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The article also discusses that the panels are much cheaper to run than diesel and are subsidized by agencies and governments while the diesel pumps are not. So, yes, it’s not specifically about solar but about the economics of solar.
With solar, there's presumably less difference between "run the pump 24/7" and "only run the pump when cost efficient."
It's essentially the same argument in favor of solar power generation. Fossil fuel generation = plant-capital-cost + fuel-per-generated-unit. Solar generation = plant-capital-cost + negligible-wear-per-generated-unit.
So it's much more effective than solar is on the normal grid.
In practice you can't suck more than about 8 metres (in theory it's a bit more), and while there are ways you can force a ground-based pump to get water up from a deeper depth than that .. the economics work against you.
A submersible pump - DC-driven by solar typically - can sit at the bottom of your bore, and push 100 metres or more upwards. No sucking required, so they're relatively simple and efficient.
(My little 75mm x 500mm submersible solar pump, for example, is pushing about 5k litres per day through 600 metres of 50mm pipe, with a vertical (head) of ~40 metres from bore water level.)
The direct effect is lower cost of energy. That it gets used to then pump water continuously is a second-order effect.