Industrial and Commercial Consumers to Pay for Solar Pumps for Farmers in Maharashtra

Industrial and commercial consumers of electricity will help realize the installation of solar pumps across Maharashtra. The State government has imposed an electricity surcharge of 10 paise (~$0.0014)/kWh on industrial and commercial consumers to finance its scheme to provide 25,000 solar pumps to farmers, a Press Trust of India (PTI) report quoted a government official as saying.

The PTI report quoted Arvind Singh, Principal Secretary, State Energy Department as saying that the total expense of the program is Rs. 8.25 billion (~$0.11 billion) and since the state doesn’t have enough resources to spend on the scheme, they have decided to collect funds by applying a surcharge on consumers.

When contacted by Mercom, an official at Maharashtra State Electricity Distribution Company Limited (MSEDCL) said, “Since November 1, 2018, the MSEDCL has been levying this surcharge of 10 paise (~$0.0014)/kWh on commercial and industrial consumers.”

When asked about whether there has been any protest from these group of consumers, so far; the MSEDCL official said, “In Maharashtra, industrial consumers know that their electricity supply is sometimes reduced to allow for supply to rural areas as irrigation is highly power intensive in the state. There is an understanding amongst the consumers that this levy of surcharge now, will result in better power supply in the future as solar pumps will reduce the load on the grid drastically.”

State Energy Minister, Chandrashekhar Bawankule, had recently announced that farmers would be provided 100,000 solar pumps in three phases between 2019 and 2021, of which 25,000 would be distributed in the first phase.

In the first phase, the government will provide solar pumps having a capacity of 3 to 5 horsepower (hp) to farmers. The price of a 3 hp pump operating on alternate current (AC) and direct current (DC) supply is Rs. 240,000 (~$3,288) and Rs. 255,000 (~$3,493) respectively, an official from the Power Ministry said. The cost of a 5 hp AC pump is Rs. 325,000 (~$4452) whereas the price of 5 hp DC pump is Rs. 385,000 (~$5274).

The MSEDCL official further said, “MSEDCL’s resources are already strained, we are already falling behind in making payments to power generators from whom we procure. In such a scenario had we waited for money to execute solar pump program, the program would have been delayed and resulted in more accrued cost for the company eventually.”

“This move to levy surcharge is the right one as residential consumers will not be affected and in general commercial and industrial consumers won’t flinch at such a small spike in cost when it guarantees uninterrupted supply in the future. We must not forget that extra electricity generated can be fed back to the grid by farmers,” added the MSEDCL official.

Mercom had previously reported that at present power required for the agricultural sector is either free or priced nominally, which doesn’t reflect the true cost of power. This puts an extra subsidy burden on state governments and respective distribution companies (DISCOMs). Solar Pumps have great potential to mitigate this issue.

Addressing recent initiatives undertaken by the government on solar pumps, India’s Minister for Power, R. K. Singh, said in the Lok Sabha, “During the financial year (FY) 2017-18, a total of 96,376 solar pumps were sanctioned in various states for both irrigation and drinking water purposes, and 10 percent of the pumps were sanctioned to the states to be utilized for drinking water purposes.”