PM KUSUM Scheme

In this article, we shall discuss the PM KUSUM scheme, its major objectives, its components, benefits for the farmers, implementation, significance of the scheme, challenges and a suitable way forward.

The agricultural sector consumes about 20 to 22% of the total electricity generated in India.

This pauses a major challenge before India’s commitment made at COP 26 summit, to have 50 percent of installed power generation capacity from non-fossil fuel sources by 2030.

PM KUSUM assumes significance in this context.

What is PM KUSUM?

The Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM KUSUM) Scheme was launched by the Ministry of New and, Renewable Energy (MNRE) in 2019. It was aimed at the installation of solar pumps and grid-connected solar and other renewable power plants in the country.

The PM-KUSUM scheme of the Government of India is one of the largest initiatives in the world to provide clean energy to more than 3.5 million farmers. This would be done by solarising their agriculture pumps. The scheme plans to set up 30.8 GW of solar capacity by December 31, 2022, through the financial assistance of INR 340.35 billion.

Major objectives of PM KUSUM

The objectives of PM-KUSUM include:

• De-dieselization of the farm sector
• providing water and energy security to farmers
• Increasing the income of farmers
• Curbing environmental pollution.

Features of the scheme

• In the beginning, the central government had a plan to distribute 1.75 million off-grid agricultural solar pumps.
• Barren lands of the farmers will be used to install about 10000 MW of solar pumps.
• Additional electricity generated from these pumps can be sold to the state electricity distribution companies called DISCOMs.
• The DISCOMs will be able to get subsidies to buy this electricity.
• The farmers will be able to get a subsidy of 60% for buying solar pumps. This amount will be transferred as a direct benefit transfer (DBT) to their respective bank accounts.
• The subsidy amount will be shared by the central and state governments.
• 30 % of the remaining amount will be given as a loan to the farmers.
• Thus, only 10% of the amount will have to be borne by the farmers.

Components of PM KUSUM

There are three components under the scheme. They are:

• Component A: 10,000 MW of Decentralized Ground Mounted Grid Connected Renewable Power Plants of individual plant size up to 2 MW.
• Component B: Installation of 17.50 lakh standalone Solar Powered Agriculture Pumps of individual pump capacity up to 7.5 HP.
• Component C: Solarisation of 10 Lakh Grid-connected Agriculture Pumps of individual pump capacity up to 7.5 HP.

Significance of PM KUSUM

• • Source of income: 
    • The scheme will open a stable and continuous source of income to the rural landowners for 25 years by utilisation of their dry or uncultivable land. It would also help increase the production of green energy and generate employment in the rural areas and would later provide for solarisation of tube-wells and lift irrigation projects of the government sector.
    • In case cultivated fields are chosen for setting up solar power projects, the farmers could continue to grow crops as the solar panels are to be set up above a minimum height.
  • Energy availability and security:
    • The scheme would ensure that sufficient local solar or other renewable energy-based power is available for feeding rural load centres and agriculture pump-set loads, which require power mostly during the daytime.
  • Less transmission losses:
    • As these power plants will be located closer to the agriculture loads or electrical substations in a decentralized manner, it will result in reduced Transmission losses for STUs and DISCOMs. Moreover, the scheme will also help the DISCOMs to achieve the RPO target.
  • Reduced expenditure: 
    • The solar pumps will save the expenditure incurred on diesel for running diesel pumps and provide the farmers with a reliable source of irrigation through solar pumps.
  • Bypass waiting list for connection:
    • In light of the long waiting list for electric grid connection, this scheme will benefit 17.5 lakh farmers over four years, without adding to the grid load.
  • Environment Friendly:
    • The scheme will help in preventing harmful pollution formed from running diesel pumps.
  • Achieve National Aim: 
    • It will help in India’s commitment to increase the share of installed capacity of electric power from non-fossil fuel sources to 50% by 2030.

Challenges in the implementation of PM KUSUM

• • Regulatory:
    • Only a handful of states have initiated tenders or commissioned projects for solar feeders or grid-connected pumps.
  • Operational and Technical:
    • DISCOMs often find utility-scale solar cheaper than distributed solar (under the scheme) due to the latter’s higher costs and the loss of locational advantage due to waived inter­-State transmission system (ISTS) charges.
    • Many farmers struggle to pay 30-­40% of upfront costs in compliance with scheme requirements.
  • Financial:
    • Current obstacles to their adoption include concerns about their economic viability in the presence of high farm subsidies and farmers’ potential unwillingness to feed in surplus power when selling water or irrigating extra land are more attractive prospects.
    • Further, many farmers cannot access bank loans without collateral.
  • Lack of trust:
    • The grid-connected model requires pumps to be metered and billed for accounting purposes but suffers from a lack of trust between farmers and DISCOMs.
  • Awareness:
    • Barriers to adoption include limited awareness about solar pumps and farmers’ inability to pay their upfront contribution.
  • COVID:
    • Pandemic-induced disruptions, limited buying from States, and implementation challenges have all affected the scheme’s roll­out.

Way Forward

• • Extend the scheme’s timelines:
    • Most Indian DISCOMs have a surplus of contracted generation capacity and are wary of procuring more power in the short term.
    • Extending PM ­KUSUM’s timelines beyond 2022 would allow DISCOMs to align the scheme with their power purchase planning.
  • Create a level playing field for distributed solar plants:
    • To tackle the bias against distributed solar, there is a need to address counter­party risks and grid unavailability risks at distribution substations. Also there is a need to standardize tariff determination to reflect the higher costs of distributed power plants, and do away with the waiver of ISTS charges for solar plants.
  • Streamline land regulations through inter-departmental coordination:
    • Doing so will help reduce delays in leasing or converting agricultural lands for non­agricultural purposes such as solar power generation.
  • Innovative Solutions:
    • Support innovative solutions for financing farmers’ contributions..
  • Smart solutions:
    • Adopting solutions like smart meters and smart transformers and engaging with farmers can build trust.

Article written by: Caroline Abraham