With an eye on the distressed agricultural sector of the country, the central government has now approved the launch of the Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) program for farmers. This program is aimed at helping the farmers install solar pumps and grid-connected solar power projects, which in turn would provide financial and water security to farmers.
The program aims to add a solar capacity of 25,750 MW by 2022.
The program has three components;
Component-A: 10,000 MW of decentralized ground mounted grid-connected solar PV projects,
Component-B: Installation of 1.75 million standalone solar powered agriculture pumps
Component-C: Solarization of 1 million grid-connected solar powered agriculture pumps.
According to a notification issued by the Ministry of New and Renewable Energy (MNRE), component-A and component-C will be implemented on pilot mode until December 2019. The pilot will be for 1,000 MW of ground-mounted solar or other projects based on renewable energy source and solarization of 100,000 grid-connected agriculture pumps and will be scaled after the success of the pilot run.
Component-B will be implemented in a full-fledged manner from the beginning, according to MNRE.
- Under component A, solar PV projects of capacity 500 kW to 2 MW will be set up by individual farmers, cooperatives, panchayats, or farmer producer organizations (FPO).
- For component A projects, DISCOMs can allow setting-up of solar or other renewable energy-based power projects of capacity less than 500 kW in specific cases.
- For component A projects, the power generated will be purchased by DISCOMs at a feed-in-tariff (FiT) determined by respective State Electricity Regulatory Commission (SERC) for which power purchase agreement (PPA) will be signed by DISCOMs for a period of 25 years.
- For component A if the aggregate capacity offered by applicants is more than notified capacity for a sub-station, bidding will be done, and in such cases, the FiT will be the ceiling tariff for bidding.
- For component A, projects can be implemented on any land, including agricultural land where solar projects will be installed in stilt fashion and with adequate spacing between panel rows for ensuring that farming activity is not affected.
- For procurement from component A projects, the central government will provide a procurement-based incentive (PBI) to DISCOMs at the rate of ₹0.40 (~$0.0057)/kWh or ₹660,000 (~$9387.33)/MW/year, whichever is lower, for five years.
- For projects under component A, state nodal agencies (SNAs) will be eligible to get service charge of ₹25,000 (~$355.58)/MW after commissioning of the projects.
- DISCOMs can use these projects to meet renewable purchase obligations (RPO).
- Under component B, individual farmers will be supported to install standalone solar pumps of capacity up to 7.5 HP to replace existing diesel pump sets in areas where there is no source of power for irrigation. Pumps of capacity higher than 7.5 HP can be allowed, but Central Financial Assistance (CFA) will be limited to the pump of 7.5 HP.
- Under component B, CFA of 30 percent of the benchmark cost or the tender cost, whichever is lower, of the standalone solar pump will be provided. The state government will give financial support of 30 percent, and the remaining 40 percent will be provided by the farmer. Bank finance will be made available for 30 percent of farmer’s contribution, so that farmer initially pays only 10 percent of the cost.
- Under component B, in northeastern states, Sikkim, Jammu & Kashmir, Himachal Pradesh, and Uttarakhand, Lakshadweep, and Andaman and the Nicobar Islands, CFA of 50 percent of the benchmark cost or the tender cost, whichever is lower, will be provided.
- For component B, implementing agencies must create a remote monitoring system to monitor the performance of the systems post-installation.
- Under component C, individual farmers having grid-connected agricultural pump will be supported to solarize pumps. Solar PV capacity up to two times of pump capacity in kW will be allowed.
- Under component C, CFA of 30 percent of the benchmark cost or the tender cost, whichever is lower, of the solar PV component will be provided. The state government will give financial support of 30 percent, and the remaining 40 percent will be provided by the farmer. Bank finance will be made available for 30 percent of the farmer’s contribution, so the farmer initially pays only 10 percent of the cost.
- Under component C, in northeastern states, Sikkim, Jammu & Kashmir, Himachal Pradesh, and Uttarakhand, Lakshadweep, and Andaman and the Nicobar Islands, CFA of 50 percent of the benchmark cost or the tender cost, whichever is lower, will be provided.
Solar power is one of the most versatile forms of energy, with boundless potential and can be a game changer for the agricultural sector, saving precious water resources, reducing dependency on the grid, and even becoming an additional revenue stream for farmers.
In February 2019, Cabinet Committee on Economic Affairs (CCEA) approved the launch of KUSUM.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.