MNRE's New Clarifications for the KUSUM Solar Program

The Ministry of New and Renewable Energy (MNRE) has issued clarifications for three components of the Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan (PM-KUSUM) program.

The MNRE launched the guidelines for the KUSUM program in July last year and just announced the ramped up targets.`

The program was announced last year with three components-A, B, and C. While component A’s objectives have remained unchanged, component B now aims to install two million standalone solar-power agricultural pumps from its previous target of 1.75 million. Component C was also revised to install 1.5 million grid-connected agricultural pumps from one million earlier.

Component A


As per the ministry’s clarifications, solar power projects can also be installed on farmers’ pasture lands and marshlands. To support small farmers, solar projects smaller than 500 kW can be allowed by states based on their techno-commercial feasibility. The solar generator will have to complete the project within twelve months from the date of the issuance of the letter of award (LoA). Also, there will be no penalty for the generators for the shortfall in power generation from the minimum prescribed capacity utilization factor (CUF).

Previously, individual farmers, cooperatives, panchayats, farmer producer organizations (FPO) were permitted to install renewable power projects of 500 kW to 2 MW on their barren or cultivable lands. Also, the time for the completion of the project was set as nine months.

Component B 

For Component B of the program, MNRE will retain 33% of eligible service charges for nationwide information, education, and communication activities. The MNRE has further clarified that solar pumps to be set up and used by water user associations, farmer producer organizations, primary agriculture credit societies, or for cluster-based irrigation system, the central financial assistance (CFA) will be provided for capacity up to 5 HP for solar pumps that are above the 7.5 HP capacity.

Also, a manufacturer of solar modules, solar pumps, or solar pump controllers can participate in the bidding process. A joint venture of manufacturers and system integrators can also take part in the tender.

The ministry noted that the quantity equivalent to 10% of the total under the particular category would be allocated to the L1 bidder. Further, the option to match the lowest (L1) bidder will be provided to all bidders falling under L1+15%. In case the number of bidders is less than five, the same will be further extended to all bidders in ascending order of the price quoted by them until all bidders agree on the L1 price.

The test certificate for a particular model of solar pumping system can be used by other installers, given the fact that they have obtained permission from the owner of the test certificate.

There will be a separate bid price for the solar water pumping system with a universal solar pump controller (USPC). The subsidy will be granted for these pumps according to the benchmark price for solar pumps without USPC.

Component C              

The MNRE will release 50% of the service charges for the sanctioned quantity to state implementation agencies after the placement of the LoA for preparatory activities. For grid-connected solar pumps to be set up and used by water user associations, farmer producer organizations, primary agriculture credit societies, or for cluster-based irrigation systems, the central financial assistance will be provided for capacity up to 5 HP for solarization of pumps above the 7.5 HP capacity.

In September this year, MNRE issued new clarifications for the KUSUM program. According to the clarifications, for Component B and Component C of the program, the state share of subsidy will be a minimum of 30% of the applicable benchmark cost or the cost discovered in auctions, whichever is lower.

 

Image credit: Prabuddha Raj, CC BY-SA 4.0, via Wikimedia Commons