Objective
PM-KUSUM is the scheme of Ministry of New and Renewable Energy (MNRE), Government of India which aims to provide clean energy and water security to farmers and enhance their income through setting up of subsidised solar pumps and decentralised solar power plants. The Scheme aims to add a solar capacity of 30.80 GW with total central financial outlay of Rs. 34,422 crore including service charges to the implementing agencies. The Scheme consists of three components: Component A: 10,000 MW of solar capacity through installation of small Solar Power Plants of individual plants of capacity upto 2 MW. Component B: Installation of 20 lakh standalone Solar Powered Agriculture Pumps. Component C: Solarisation of 15 Lakh Grid-connected Agriculture Pumps. Under Component-C, apart from solarizing individual agriculture pumps, solarisation of complete agriculture feeder is also allowed The timeline for implementation of the Scheme has been extended till 31.03.2026.
Features
It provides financial support to the farmers for installation of standalone solar pumps and solarization of existing grid-connected agriculture pumps, and also provides the farmers an opportunity to become solar entrepreneurs by installing solar power plants on their land. Subsidy is provided by Central and State Government under Components B and C of the scheme for installing standalone solar agriculture pump and solarisation of grid connected agriculture pumps and no subsidy is available under Component A. After State’s and Central Government’s subsidy share, the beneficiary is required to pay only the balance amount. The beneficiaries can easily avail loans as RBI has included PM-KUSUM under priority sector lending.
Component-A: Decentralized Grid Connected Solar Power Plants
Small solar power plants of capacity upto 2MW can be set-up by eligible Renewable Power Generators (RPGs) such as individual farmers, groups of farmers, cooperatives, panchayats, / Farmer Producer Organisations (FPOs), and Water User Associations on their barren or cultivable lands. No subsidy support is available under Component A. The RPGs are required to arrange the capital for installing the plants on their own, and if they are unable to arrange the required capital, they can either take a loan from the financial institutions or opt for developing the solar power plant through the developer(s) or local DISCOM, where one can lease his land to the developer or DISCOM and get lease rent. In this case, the DISCOM, or developer, will be termed the power generator. Power generated from solar plants will be purchased by the Distribution companies (DISCOMs) at tariffs determined by the respective State Electricity Regulatory Commissions (SERCs). The plant can be installed by the farmer or he can provide his land on lease to a developer, who will install the plant. DISCOMs /GENCO/ any other Department designated by State Government will be the implementing agencies for Component A.
Component-B: Installation of Standalone Solar Powered Agriculture Pumps
Under this component, individual farmers can replace their existing diesel pumps with solar pumps in off-grid areas where there is no source of electric power for irrigation. The replacement of existing diesel pumps with solar pumps will not only reduce irrigation costs but also lead to a reduction in pollution and increase the farmer’s income and living conditions. Group of farmers, such as Farmer Producer Organisations (FPO), Water User Associations and community/cluster-based irrigation systems will also be covered under this component. However, priority will be given to small and marginal farmers. Subsidy is available for installing solar agriculture pump under the scheme Central Financial Assistance (CFA) of 30% of the benchmark cost or the tender cost, whichever is lower, of the standalone solar pump will be provided. The State Government will give a subsidy of 30%; and the remaining 40% will be provided by the farmer. Bank finance up to 30% out of 40% share can be availed by the farmer, so that farmer has to initially pay only 10% of the total cost of the pump. However, in North Eastern States, Sikkim, Himachal Pradesh, Uttarakhand, Jammu & Kashmir, Ladakh, Lakshadweep and A&N Islands, higher CFA of 50% of the benchmark cost or the tender cost, whichever is lower, of the standalone solar pump will be provided. Selected vendors for installation of solar pump and panel will mandatorily provide repair & maintenance for a period of 5 years from the date of commissioning of the pump One can contact the State Implementing Agency or apply online at the portal of the State Implementing Agency for solar agriculture pumps.
Component – C: Solarisation of Grid-connected Agriculture Pumps & Solarisation of Agriculture Feeders
Individual Pump Solarisation (IPS): Under this component, Individual farmers having grid connected agriculture pumps will be supported to solarise pumps. Solar PV capacity upto two times of pump capacity in kW is allowed. The following are eligible for individual pump solarisation: • Individual farmers, • Water User Associations, • Farmer Producer Organisations (FPO), • Primary Agriculture Credit Societies (PACS) • Community/cluster-based irrigation system Subsidy is available for solarisation of individual grid connected agriculture pumps, which is similar to that of Component B of the scheme. CFA of 30% of the benchmark cost or the tender cost, whichever is lower, of the solar PV component will be provided. The State Government will give a subsidy of 30%; and the remaining 40% will be provided by the farmer. A farmer can take loan for balance amount after subsidy contribution from State and Central Government for installing solar panels for solarisation of grid connected agriculture Bank finance up to 30% out of 40% share can be availed by the farmer, so that farmer has to initially pay only 10% of the cost. However, in North Eastern States, Sikkim, Himachal Pradesh, Uttarakhand, Jammu & Kashmir, Ladakh, Lakshadweep and A&N Islands, higher CFA of 50% of the benchmark cost or the tender cost, whichever is lower, of the solar PV component will be provided. The State Government will give a subsidy of 30%; and the remaining 20% will be provided by the farmer. Feeder-level Solarisation: Instead of the individual solar pumps the states can solarise the agriculture feeders. Guidelines for this were issued on 04.12.2020. Where feeders have already been separated for agricultural purposes, the feeders may be solarised by installing solar power plants and where they are not separated, loan for feeder separation may be taken from NABARD/PFC/REC. Further, assistance for feeder separation may be availed from the Revamped Distribution Sector Scheme (RDSS) of the Ministry of Power. However, mixed can also be solarised. Solar Plants of sufficient capacity that can take agriculture load of the selected feeder can be installed through CAPEX/RESCO Mode for a project period of 25 years. The following are eligible for feeder level solarisation: • RESCO developer • DISCOMs Government of India will provide 30% subsidy for solarisation of agricultural feeders and there is no mandatory requirement of state/farmer’s share. CFA of 30% on the cost of installation of solar power plant (50% in case of NE States, hilly states/UTs and Island UTs) will be provided for CAPEX/RESCO Mode by Central Government and balance will be met through loan from NABARD/PFC/REC. This will lower the cost of capital and cost of power. Farmer will not have to depend on electricity supply for irrigation during daytime
Benefits
One can benefit in several ways under respective components of the scheme: • Day time power availability to farmer • Steady Source of Income by selling power to DISCOM at a pre-determined tariff in case of Component C – Individual Pump Solarisation and incentives against energy conservation savings in case of Component C – Feeder level solarisation & lease revenue in case farmer decides to lease land and develop solar power plant through a developer or DISCOM under Component – A • No recurring costs of electricity or fuel as solar water pumps do not require any fuel (diesel/kerosene) or electricity to operate. The farmers will get cheaper and more reliable power for irrigation resulting savings in diesel cost. • Solar water pumps are easier to operate and maintain than diesel pumps (Comp B & Comp C – Individual Pump Solarisation) • Due to reliable access to irrigation, a farmer can choose to harvest additional crops thus resulting in extra incomes • Reducing The Agriculture Electricity Subsidy Burden on States And Improving The Financial Health of DISCOMS