For the empowerment of social entrepreneurs, a five-point agenda
The Union Minister of Power, New and Renewable Energy recently reviewed the progress of the PM-KUSUM scheme and reaffirmed the government’s commitment to accelerating solar pump adoption.
The pandemic-induced disruptions, limited buy-in from States, and implementation challenges have affected the scheme’s policies. Patchy and delayed monsoons have hit kharif crops in most of the country.
In these times, PM-KUSUM Scheme can play a vital role for the farmers to increase its significance.
PM-KUSUM Scheme
Ministry of New and Renewable Energy launched the (PM KUSUM) Scheme in 2019 for farmers, for the installation of solar pumps and grid connected solar and other renewable power plants in the country. Its aim is to help farmers day-time solar power for irrigation, reduce power subsidies, and decarbonize agriculture.
Scheme Components
- 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.
Barriers Pertaining to PM-KUSUM:
Limited awareness about Solar Pumps
- The scheme provides farmers with incentives to install solar power pumps and plants in their fields.
- They can use one of three deployment models:
- off-grid solar pumps, solarized agricultural feeders, grid-connected pumps.
- Nearly 2,80,000 systems deployed fall far short of the scheme’s target of two million by 2022.
- The farmers are unable to pay their upfront contribution.
Financial and Technical Challenges
- Progress on the other two models has been poor due to regulatory, financial, operational, and technical challenges.
- Only a handful of States have commissioned projects for solar feeders or grid-connected pumps,
- Both models are worth scaling up as they allow farmers to earn additional income by selling solar power to distribution companies.
Suggestions
1. Extend the Timeline of the Scheme:
- Most Indian distribution companies have a surplus of contracted generation capacity and procure more power in the short term.
- Extending the timelines beyond 2022 would allow companies to align the scheme with their power purchase planning.
2. Create Equal Opportunity for Distribution of Solar Plants.
- Selling surplus power to companies is one of the main attractions of grid-connected models.
- The companies find utility-scale solar cheaper than distributed solar due to the latter’s higher costs.
- They face a loss of locational advantage due to inter-State transmission system (ISTS) charges.
3. Streamline Land Regulations:
- Streamline land regulations through inter-departmental coordination.
- It will reduce delays in converting agricultural lands for non-agricultural purposes such as solar power generation.
4. Innovative Solution for Farmers:
- Support innovative solutions are much needed for financing farmers contribution.
- Many farmers struggle to pay 30-40% of upfront costs in compliance with scheme requirements.
- They are unable to access the facility of bank loans without collateral.
5. Grid-Connected Solar Pumps:
- The focus should on adopting grid-connected solar pumps.
- Its adoption includes concerns about their economic viability in the presence of high farm subsidies.
- The model requires pumps to be metered and billed for accounting purposes but suffers from a lack of trust between farmers and distribution companies.
Road ahead
- There is a need to address counter-party and grid-unavailability risks at distribution substations.
- Standardize tariff determination must be included to reflect the higher costs of distributed power plants.
- States should constitute steering committees comprising members from all relevant departments to streamline the land regulations.
- To ease the financial burden on farmers, we need out-of-the-box solutions.
Example
- Karnataka’s farmer-developer special-purpose vehicle to help farmers install solar power plants on their farms.
- A community-owned model in Chhattisgarh and Jharkhand, which could help marginalised farmers own and access off-grid pumps with limited upfront contributions.
- Adopting solutions like smart meters and smart transformers and engaging with farmers can build trust and address some operational challenges.
The measures along with other agriculture schemes and intensive awareness campaigns, could give a much-needed boost to PM-KUSUM. If successful, the scheme can generate hundreds of thousands of jobs, vastly reduce the carbon footprint of Indian agriculture, and result in oil import savings.
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