In a country where agriculture is the backbone of the economy, ensuring the welfare of farmers is of paramount importance. The Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) is an initiative launched by the Indian government in 2019 to revolutionise the agricultural sector. By harnessing the power of solar energy, the scheme aims to address key challenges faced by farmers, such as escalating energy costs, unreliable electricity supply and over-reliance on fossil fuels. With its implementation, the scheme endeavours to pave the way for a sustainable and resilient future for agriculture. According to the Ministry of New and Renewable Energy (MNRE), with a total central financial support of Rs 344.22 billion, including service charges to the implementing agencies, the scheme has set ambitious goals of adding 30,800 MW of solar capacity by 2022.
Current status of PM-KUSUM components
At the heart of the PM-KUSUM scheme lie three distinct components, each tailored to tackle specific challenges.
Component A: Installation of grid-connected solar power plants
The first component encourages farmers to set up grid-connected solar power plants on their barren or fallow lands. The excess power generated can also be fed back into the grid. This not only empowers farmers to earn additional income through electricity sales, but also contributes to the national goal of increasing renewable energy capacity. Component A aims to install 10,000 MW of solar capacity by constructing small power plants with capacities of up to 2 MW each. However, as of June 30, 2023, only 113.08 MW of solar capacity has been installed under this component out of a sanctioned capacity of 4,716 MW, according to the Ministry of New and Renewable Energy (MNRE). Under this component, the distribution companies (discoms) will be eligible to receive a procurement-based incentive of Re 0.40 per unit purchased, or Rs 660,000 per MW of capacity installed, whichever is lower, for a duration of five years from the commercial operation date.
Component B: Installation of standalone solar-powered agricultural pumps
This component addresses a critical issue faced by farmers – the exorbitant costs of operating diesel- or electricity-powered irrigation pumps. Through financial assistance, the scheme enables farmers to replace these traditional pumps with solar-powered pumps. This not only reduces operational expenses but also promotes sustainable irrigation practices, benefiting both farmers and the environment. Component B aims to install 2 million standalone solar-powered agricultural pumps. According to the MNRE, as of June 30, 2023, only around 244,373 pumps have been installed under this component, out of a total of 947,991 pumps sanctioned. Under Component B, central financial assistance (CFA) of 30 per cent of the benchmark cost or the tender cost, whichever is lower, will be provided for the installation of standalone solar agricultural pumps. The state government will also offer a subsidy of at least 30 per cent, and the remaining 40 per cent will be borne by the farmer.
Component C: Solarisation of grid-connected agricultural pumps
In an effort to making agriculture more energy efficient, Component C focuses on converting existing grid-connected agricultural pumps into solar-powered ones. By utilising solar energy, farmers can significantly reduce their electricity consumption, making agricultural operations more cost-effective and environmentally friendly. Component C of the scheme is dedicated to the solarisation of 1.5 million grid-connected agricultural pumps. However, it is worth noting that out of the 121,930 pumps sanctioned, only 1,519 individual pumps have been installed as of June 30, 2023, according to the MNRE. Under Component C, CFA of 30 per cent of the benchmark cost or the tender cost, whichever is lower, will be provided for the installation of stand alone solar agricultural pumps. The state government will also offer a subsidy of at least 30 per cent, and the remaining 40 per cent will be borne by the farmer.
Recent amendments
The PM-KUSUM scheme has undergone significant amendments to enhance its implementation and benefits. According to the information given by the Union Minister of Power and New and Renewable Energy in the Lok Sabha in March 2023, the scheme has been extended until March 31, 2026, and a feeder-level solarisation component has been introduced. Farmers can now install solar power plants not only on barren, fallow and agricultural land, but also on pasturelands and marshlands. Small farms can benefit, since solar power installations smaller than 500 kW may be permitted, depending on feasibility. In addition, the penalty for shortfalls in solar power generation under Component A has been removed.
Furthermore, CFA is available for pump capacities up to 15 HP (increased from 7.5 HP) for individual farmers in the north-eastern states, Jammu & Kashmir, Ladakh, Uttarakhand, Himachal Pradesh, and the Andaman & Nicobar and Lakshadweep Islands, as well as for cluster/community irrigation projects in high water table areas. Solar pumps can now be set up and used by water user associations, farmer producer organisations, primary agriculture credit societies and cluster-based irrigation systems, with CFA for higher capacities. Moreover, state-level tenders are now allowed for the procurement of standalone solar pumps, and the implementation period has been extended to 24 months from the initial sanction. The domestic content requirement for solar cells has been waived for feeder solarisation projects awarded to implementing companies by June 20, 2023. In addition, the requirement for performance bank guarantees under Component A and Component C has been relaxed.
Additionally, under feeder-level solarisation, installing meters with agricultural electricity connections for farmers is now optional. To expand the installer base and hasten the scheme’s benefits, the tender guidelines have been changed. Regular revisions to solar pump specifications and testing procedures ensure the promotion of installation quality. These amendments aim to streamline PM-KUSUM implementation and make it more accessible and effective for farmers across India.
Expected outcomes
The expected outcomes of PM-KUSUM are multifold and promising:
- The scheme aims to provide daytime reliable power for irrigation, easing farmers’ lives, and preventing water and power wastage.
- By replacing diesel pumps with cost-effective solar pumps, the farm sector will undergo de-dieselisation, leading to significant savings in operational costs.
- PM-KUSUM is designed to enhance farmers’ income by replacing high-cost diesel with more affordable solar energy, and enabling them to sell surplus power to discoms.
- The scheme seeks to reduce the agriculture electricity subsidy burden on states, contributing to the financial health of discoms. Furthermore, implementing PM-KUSUM will lower India’s petroleum import bill by significantly reducing diesel consumption.
- The scheme’s impact on climate change will be noteworthy, as it aims to reduce carbon emissions by a substantial amount, benefiting the environment and creating a pollution-free ecosystem for farming.
- The PM-KUSUM scheme addresses India’s ambitious targets in renewable energy capacity addition, particularly in solar power. By mandating the use of domestically produced solar cells and modules, the scheme will boost domestic solar manufacturing, aligning with the nation’s strategic objectives in the renewable energy sector. With these transformative outcomes, PM-KUSUM will pave the way for a sustainable and prosperous future for Indian agriculture.
The way forward
The PM-KUSUM scheme has the potential to revolutionise Indian agriculture by promoting the use of solar energy and addressing the challenges faced by farmers. However, the scheme has encountered several obstacles related to the high cost of solar pumps, which discourages its uptake even after the provision of CFA. This also leads to the key issue of farmers not being able to access finance for solar pumps and small solar projects. This issue was highlighted by the 33rd report of the Standing Committee on Energy 2022-23. In response, the MNRE has stated that initiatives have been taken to facilitate financing for farmers through various banks, making the process more accessible and efficient. The creation of a dedicated web page in the PM-KUSUM portal for loan applications has further streamlined the process, expediting the implementation of Component A of the scheme. The committee’s report had recommended that the payment of the farmers’ share of funds be allowed through the Members of Parliament Local Area Development Scheme. The MNRE had stated that it is working on this suggestion.
Overall, the efforts made by the government to address the challenges faced by farmers and improve the status of implementation of the PM-KUSUM scheme are laudable. By providing financial assistance and promoting solar energy adoption, the scheme has the potential to uplift the agricultural sector and benefit farmers across the country. With continued collaboration and diligent implementation, PM-KUSUM can pave the way for a sustainable and prosperous future for the country’s farmers.
By Anusshka Duggal
