Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM)

The Ministry of New and Renewable Energy (MNRE) launched the Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM-KUSUM) scheme in 2019 to help the farmers with the installation of solar pumps, grid-connected solar and other renewable power plants across the country. 

The PM-KUSUM scheme aims to ensure energy security for the farmers in India. It also intends to honour India’s commitment to raising the share of installed electric power capacity from non-fossil fuel sources to 40% as part of Intended Nationally Determined Contributions (INDCs) by 2030. 

The PM-KUSUM scheme intends to add solar and other renewable capacities of 25,750 MW by 2022 with the central financial support of Rs.34,422 crore, including service charges to the implementing agencies. This scheme is valid till 31 December 2022.

Components of the PM-KUSUM scheme

The PM-KUSUM scheme consists of the following three components:

Component A: Consists of 10,000 MW of decentralised ground-mounted grid-connected renewable power plants of individual plant size up to 2 MW.

Component B: This component consists of the installation of 17.50 lakh standalone solar-powered agriculture pumps of up to 7.5 HP individual pump capacity.

Component C: Consists of the solarisation of 10 Lakh grid-connected agriculture pumps of individual pump capacity up to 7.5 HP.

PM-KUSUM Scheme Benefits

The PM-KUSUM scheme will provide a continuous and stable source of income to the rural landowners by utilisation of their dry or uncultivable land. Further, if cultivated fields are selected to set up solar power projects, the farmers can continue to grow their crops as the solar panels will be set up above a minimum height.

The PM-KUSUM scheme will ensure that sufficient solar or other renewable energy-based power is available for feeding agriculture pump-set loads and rural load centres that require power primarily during the daytime. Since these power plants will be located near the agriculture loads or electrical substations in a decentralised manner, they would reduce transmission losses for STUs and Discoms.

The PM-KUSUM scheme will also help the Discoms to achieve the Renewable Purchase Obligation (RPO) target. The solar pumps will save the expenses incurred on diesel for running diesel pumps. It will provide the farmers with a reliable source of irrigation through solar pumps and prevent harmful pollution from running diesel pumps. 

Implementation of PM-KUSUM

The State Nodal Agencies (SNAs) of MNRE will coordinate with States/UTs, farmers, and Discoms to implement the scheme. 

The implementation of component A of the scheme is as follows:

• Individual farmers, groups of farmers, cooperatives, panchayats or Farmer Producer Organisations (FPO) will set up renewable power projects of 500 kW to 2 MW capacity. 
• When the above-specified entities cannot arrange the required equity for setting up the renewable power projects, they can choose to develop the projects through developers or through the local Discom, which will be considered Renewable Power Generation (RPG) in this case.
• The Discoms will notify the sub-station wise surplus capacity that can be fed from renewable energy (RE) power plants to the grid. They will invite applications from interested parties/beneficiaries for setting up the RE plants.
• The Discoms will purchase the renewable power generated at a feed-in-tariff (FiT) determined by the respective State Electricity Regulatory Commission (SERC).
• Discoms are eligible to get a Procurement Based Incentive (PBI) at Rs.6.6 lakh per MW of capacity installed or Rs.0.40 per unit purchased, whichever is less, for five years from the Commercial Operation Date (COD).

The implementation of component B of the scheme is as follows:

• Individual farmers will receive financial support to install standalone solar agriculture pumps of up to 7.5 HP capacity.
• The central government will provide the Central Financial Assistance (CFA) of 30% of the tender or benchmark cost, whichever is lower, of the standalone solar agriculture pumps. The respective state governments will grant a subsidy of 30%, and the farmer has to provide the remaining 40% of the standalone solar agriculture pumps cost. 
• Bank finance is available for the farmer’s contribution. Thus, the farmer has to pay only 10% of the cost initially, and the remaining 30% will be a loan.
• The Central Government will provide the CFA of 50% of the tender or benchmark cost, whichever is lower, of the standalone solar pump in the North-Eastern states, Himachal Pradesh, Sikkim, Uttarakhand, Jammu and Kashmir, Lakshadweep and Andaman and the Nicobar Islands. 
• The respective state governments will grant a subsidy of 30%, and the farmer has to provide the remaining 20% of the standalone solar agriculture pumps cost for the states mentioned above. 
• In the states mentioned above, bank finance is available for the farmer’s contribution. Thus, the farmer has to initially pay only 10% of the cost, and the remaining 10% will be a loan.

The implementation of component C of the scheme is as follows:

• Individual farmers having grid-connected agriculture pumps will receive support to solarise pumps. Solar PV capacity up to twice the pump capacity in kW is allowed under this scheme.
• The farmers can use the generated solar power to meet their irrigation needs and sell the excess solar power to the Discoms.
• The Central Government will provide a CFA of 30% of the tender or benchmark cost, whichever is lower, of the solar PV component. The respective state governments will grant a subsidy of 30%, and the farmer has to provide the remaining 40% of the solar PV component.  
• Bank finance is available for the farmer’s contribution. Thus, the farmer has to pay only 10% of the cost initially, and the remaining 30% will be a loan.
• The Central Government will provide the CFA of 50% of the tender or benchmark cost, whichever is lower, of the standalone solar pump in the North-Eastern states, Himachal Pradesh, Sikkim, Uttarakhand, Jammu and Kashmir, Lakshadweep and Andaman and the Nicobar Islands. 
• The respective state governments will grant a subsidy of 30%, and the farmer has to provide the remaining 20% of the solar PV component for the states mentioned above. 
• In the states mentioned above, bank finance is available for the farmer’s contribution. Thus, the farmer has to initially pay only 10% of the cost, and the remaining 10% will be a loan.

Implementing Agencies of the PM-KUSUM Scheme

The implantation agencies for different components of the PM-KUSUM scheme are as follows:

• For Component A – Discoms are implementation agencies.
• For Component B – Discoms, the agricultural department, minor irrigation department or any other department designated by the state government will be the implementing agencies.
• For Component C – Discoms, Power Generating Companies (GENCO) or any other department designated by the state government will be the implementing agencies.
• Every state will nominate the implementation agency in their respective state for each of the three components.

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