PM KUSUM - Helping farmers boost agriculture with solar power

9 min read
PM KUSUM - Helping farmers boost agriculture with solar power

PM KUSUM (Pradhan Mantri Kisan Urja Suraksha Evam Utthan Mahabhiyan) Yojana

PM KUSUM is a significant initiative by the Government of India and the Ministry of New and Renewable Energy (MNRE) with two primary objectives: promoting the use of solar power and providing support to farmers. The PM-KUSUM scheme stands as one of the world's largest initiatives, aiming to deliver clean energy to over 35 lakh farmers by solarizing their agriculture pumps under components B and C.

The scheme encourages farmers to adopt solar energy by installing solar water pumps on their agricultural lands. These solar pumps replace conventional diesel or electric pumps, which can be costly to operate and have environmental impacts.

The government provides financial assistance to farmers to facilitate the installation of these solar water pumps. This financial support includes a combination of subsidies from both the central and state governments, as well as low-interest loans.

PM kusum yojana Vission

Components Of PM Kusum Yojana

The PM-KUSUM Yojana is a comprehensive initiative that supports three different kinds of installations known as three different components of the scheme, each aimed at promoting renewable energy adoption and empowering farmers in India:

Component-A: It focuses on the establishment of decentralized ground or stilt-mounted grid-connected solar power plants, as well as other renewable energy-based power plants with a capacity of up to 2 MW. These power plants are distributed across various locations and connected to the national grid

Component-B: It is centered around installing 20 Lakh stand-alone solar agriculture pumps up to 7.5 HP capacity. These solar pumps are designed to operate independently and are not connected to the grid. They provide a reliable and renewable source of power for irrigation purposes in remote and off-grid areas.

Component-C: Solarizing 15 lakh existing grid-connected agriculture pumps up to 7.5 HP capacity through individual pump installations and also through feeder-level Solarization. By converting traditional pumps into solar-powered ones, farmers can significantly reduce their dependence on grid electricity and adopt a more sustainable and eco-friendly approach to irrigation.

These components aim to promote renewable energy adoption, empower farmers, and enhance agricultural practices while contributing to India's energy sustainability.

What is the difference between Individual pump Solarization and Feeder Level Solarization?

Individual pump Solarization- a single grid-connected pump is converted to run on solar power by installing solar panels and connecting them to the pump for power supply.

Feeder level Solarization- all grid-connected pumps linked to a specific feeder can be solarized by utilizing a single, larger capacity aggregate solar power plant. This solar power plant will be installed close to the respective substation. Its main responsibility will be to supply electricity to the agriculture pumps through the feeder.

Can Farmer Get Financing Facility For Solar Power Plant and Solar Water Pumps

Indeed, you can secure a loan to install a solar power plant on your land through Component A of the PM Kusum Yojana Scheme. Banks provide loans for solar panels in compliance with the priority sector lending guidelines of the Reserve Bank of India (RBI).

For the installation of solar water pumps under Component B, farmers can get loans to cover their balance contribution. 30% of the total amount can be financed through the loan, while the farmer will need to make an upfront contribution of 10%

Subsidy Benefits On PM Kusum Yojana Scheme

Subsidy benefit is applicable on Component B and Component C of the scheme. In most states, except for North-eastern States, Hill States/Union Territories (UTs), and Island UTs, the government will provide a subsidy of 30%. Both the Central and State Governments will contribute to this subsidy, and the farmer will invest the remaining 40% for installing a solar pump. The subsidy percentage is calculated based on the benchmark cost or the tender cost, whichever is lower.

For North-eastern States, Himachal Pradesh, Uttarakhand, Jammu and Kashmir / Ladakh, and Island UTs, the government will provide a higher subsidy of 50% from the Central Government, and the State Government will contribute at least 30%. The farmer must invest the remaining 20% for installing the solar pump. 

Calculation of assessment:

SNO

WORKING VARIABLES

COMP-B (Rs)

COMP-C (Rs)

1

Cost of project

325000

450000

2

30% SUBSIFDY FROM Cent. GOV

97500

135000

3

30% SUBSIDY FROM SG

97500

135000

4

30% Bank Finance 

97500

135000

5

10% Farmers’ Contribution

32500

45000


No subsidy is provided under Component A of the PM Kusum Yojana Scheme.The responsibility of arranging the capital for installing the plants lies with the RPGs themselves.

Incentives Under Component A Of PM Kusum Yojana

The renewable power that is produced will be bought by DISCOMs (distribution companies) at a fixed rate. The agreement to buy the power will last for 25 years from when the project starts operating commercially. Additionally, DISCOMs will receive a bonus of 40 paisa (0.40 rupees) for every unit of electricity they purchase or Rs. 6.6 lakh per MW (mega-watt) per year, whichever is less. This incentive will be given for a duration of five years.

Farmers can earn lease income by leasing their land under PM Kusum Yojana Component A, a government scheme promoting solar energy in agriculture.

Who Are Eligible Beneficiaries To Apply For The Scheme

The PM Kusum Yojana scheme targets specific groups of individuals who are eligible to apply as beneficiaries. Eligible beneficiaries for the PM-KUSUM Yojana scheme include 

  • Individual farmers , 
  • Groups of farmers,
  • Cooperatives and Panchayats, 
  • Farmer Producer Organisations (FPO)  
  • Water User Associations (WUA). 
  • Primary Agriculture Credit Societies (PACS)
  • Community/cluster-based irrigation system
  • RESCO developer (Feeder level solarisation - Component-C)
  • DISCOMs (Feeder Level Solarisation - Component-C)

    Under component A 

    • The eligible capacity for ground-mounted solar power plants is between 500 kW to 2 MW.
    • The land designated for the project installation must be located within 5 km from the nearest electricity sub-station.
    • The applicant is required to provide evidence of adequate funds to establish the solar power plant. Based on an estimated installation cost of 4 Crores per MW, the applicant should demonstrate possession of funds amounting to at least 30% of the applied capacity's total cost.

      Steps To Apply For PM Kusum Yojana Scheme

      To apply for the PM-KUSUM scheme, individuals can submit their applications through the office of the State implementing agency responsible for the specific component of the scheme.

      Step 1 - Apply for the scheme

      • Visit the state portal links from official PM Kusum Yojana website https://pmkusum.mnre.gov.in/landing.html.
      • On the homepage, click on the "Online Registration" option.
      • Fill out the application form with necessary details, including Name, Address, Aadhaar number, and Mobile Number.
      • Upload the required documents, such as a scanned copy of the Aadhaar Card Number and a scanned copy of a nationalized bank document.
      • Review the application form for accuracy and make any necessary corrections.
      • Finally, click the "Submit" button to complete the application process for the PM Kusum Yojana.

      Step-2: Once Aadhar Authentication is completed, the application is accepted, and the initial farmer contribution is submitted.

      Step-3: The farmer has the flexibility to choose from MNRE empanelled vendors. Additionally, vendors can also assist in filling out the application on the farmer's behalf.

      Step-4: After the State Implementing Agency verifies the submitted documents, the pump capacity is approved. Subsequently, the selected vendor will proceed to install the pump at the designated farmer's site.

      Documents Required To Apply For Solar Water Pump

      • Photograph of the applicant/applicants.
      • Copy of AADHAAR CARD.
      • Copy of Scheduled Caste Certificate (Only for SC Farmers).
      • Certificate of Patwari for required land at a place in the village or affidavit / self attested certificate of farmer to this effect.
      • PSPCL Certificate for no power connection (agriculture motor) for irrigation or affidavit / self attested certificate of farmer to this effect.
      • Certificate for Micro Irrigation system in the land or affidavit.
      • Self attested Certificate of farmer (only for Micro irrigation farmers for preference in allocation of solar pumps )
      • Photograph of the pond / water tank site.
      • Upload customer copy of challan if payment deposited through RTGS / NEFT

        Advantages Of The PM Kusum Yojana Scheme

        Now, under the Kusum Yojana, the farmers who currently operate their irrigation pumps using diesel or petrol will be able to run those pumps with solar energy. 

        Reduced Electricity Expenses: By adopting solar-powered pumps, farmers can significantly reduce their dependence on conventional electricity sources, leading to lower electricity bills and reduced financial burden.

        Increased Income: Farmers can generate surplus solar energy and sell it back to the grid, providing them with an additional source of income.

        Energy Independence: With solar-powered pumps, farmers become less reliant on non-renewable energy sources, ensuring a more stable and self-sustained energy supply.

        Improved Irrigation: Solar pumps can ensure a steady and reliable water supply for irrigation, even in remote areas with limited access to traditional electricity.

        Diversification of Income: Apart from agriculture, farmers can now venture into renewable energy generation, expanding their income streams.

        Government Subsidies: The scheme offers financial support through government subsidies, making it more accessible and affordable for farmers to adopt solar technology.

        Rural Development: The widespread adoption of solar pumps can contribute to the development of rural areas, promoting modernization and access to clean energy infrastructure.

        Long-Term Savings: Solar-powered pumps have a longer lifespan and require less maintenance, resulting in cost savings over time for farmers.

        Overall, the PM-KUSUM Yojana empowers farmers by providing them with sustainable and environmentally friendly energy solutions while boosting their income and improving agricultural productivity.

        Associated Concerns With PM Kusum Yojana Scheme

        Financial and Logistics Challenges:

        Setting up solar power projects can be costly, making it difficult for some farmers to access the necessary financing. Moreover, the availability of solar pumps remains an issue, despite domestic suppliers readily offering other types of pumps.

        Depleting Water Tables:

        Due to power subsidies, electricity costs are low for farmers, leading to excessive pumping of water, resulting in a decline in the water table. Upgrading to higher capacity pumps in solar installations becomes more challenging as it involves the addition of expensive new solar panels when the water table falls.

        Exclusion of Small and Marginal Farmers:

        The scheme's primary focus on pumps with capacities of 3 HP and higher has led to the exclusion of small and marginal farmers. As a result, the majority of farmers, approximately 85% of them, who fall into this category, are unable to access solar pumps through the scheme. Additionally, the prevalence of low water tables, particularly in North India and parts of South India, further restricts the suitability of small-sized pumps for these farmers.

        Regulatory Barriers and Stability Concerns:

        Implementing solar power projects may face regulatory hurdles, particularly when it comes to connecting them to the grid. Integrating decentralized solar power projects into the grid can also pose technical challenges and stability issues that require careful consideration and resolution.

        Expected improvements From PM Kusum Yojana Scheme

        The PM-KUSUM Yojana is expected to bring about several significant improvements:

        Day-time Reliable Power for Irrigation: Currently, farmers face inconveniences and water wastage due to receiving power for irrigation at night. By installing solar panels for irrigation, PM-KUSUM will provide reliable day-time power, making irrigation easier and more efficient.

        De-Dieselization of Farm Sector: Replacing costly diesel pumps with solar pumps and panels will offer farmers cheaper and more reliable power for irrigation, resulting in savings in diesel costs.

        Enhancing Farmers' Income: PM-KUSUM will contribute to increasing farmers' income by replacing high-cost diesel with less expensive solar energy under Component-B. Additionally, farmers can sell surplus solar power to DISCOMS under Component-C, generating additional revenue.

        Reducing Agriculture Electricity Subsidy Burden: The scheme aims to reduce subsidy requirements from states for electricity supply to agriculture. The annual subsidy can be used to repay loans, making solar power available for free in five to six years and improving the financial health of DISCOMS.

        Curbing Climate Change: Implementing PM-KUSUM will lead to a significant reduction in carbon emissions by replacing diesel pumps with solar ones. This contributes to mitigating climate change and creates a pollution-free environment for farmers.

        Boosting Domestic Solar Manufacturing: The mandatory requirement for domestically produced solar cells and modules will stimulate domestic solar manufacturing, reducing reliance on imports and supporting the growth of the solar industry.

        Import billReducing Import Bill: PM-KUSUM's implementation will lead to a reduction in diesel consumption, resulting in a lower import bill for petroleum products. Enhanced domestic solar manufacturing will further reduce import expenses.

        Overall, PM-KUSUM is expected to bring about positive changes by promoting sustainable energy practices, increasing farmers' income, and contributing to India's renewable energy goals. It also benefits the environment by curbing emissions and supports the growth of the domestic solar industry while reducing the nation's dependence on imports.

        Conclusion 

        In conclusion, the PM Kusum Yojana Scheme offers a multitude of benefits that significantly contribute to the transformation of India's agricultural landscape and renewable energy sector. By providing financial support to farmers for the installation of solar water pumps and power plants, the scheme facilitates enhanced irrigation, leading to increased agricultural productivity and income. Additionally, the promotion of solar power generation on barren lands not only generates renewable energy but also enables farmers to earn extra income by selling surplus power to the grid. 

        The scheme's emphasis on decentralized renewable energy systems empowers farmers and rural communities by reducing their dependency on traditional energy sources and fostering sustainable development. Moreover, through its environmental impact, the PM Kusum Yojana plays a crucial role in mitigating greenhouse gas emissions and combating climate change. As a comprehensive and forward-thinking initiative, the PM Kusum Yojana Scheme serves as a significant step towards achieving India's clean energy goals while uplifting the livelihoods of farmers and fostering a greener and more prosperous future for the nation.

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