PM Kusum Yojana: Empowering Farmers with solar energy for sustainability

India is a country that depends on agriculture for its economic strength and has evolved. Farmers face challenges related to irrigation, energy access environmental sustainability, and new agricultural methods.

In response to this, the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM Kusum Yojana) has been launched by the Indian government to empower farmers through the adoption of solar energy for irrigation and power generation. 

It is one of the initiatives to promote renewable energy in rural areas to reduce farmer’s reliance on traditional sources of energy and promote sustainable energy solutions.

In this blog, we will talk about the Yojana, its benefits and application processes, subsidy structure, and much more

What is PM Kusum Yojana?

It is a government initiative that provides solar pumps and solar power systems to farmers ensuring energy security for farmers in India.

It aims at increasing the share of installed capacity of electric power from non-fossil fuels sources to 40% by 2030 as part of Intended Nationally Determined Contributions. 

Key Features of PM Kusum Yojana

The components of the Kusum Yojana scheme are:

• Component A: The government aims to establish 10,000MW of decentralized Grid-Connected Renewable Energy Power Plants on barren land. 
  1. They will have a capacity of 500kW to 2 MW which will be set up by individual farmers/groups of farmers/cooperatives/panchayats/Farmer Producer Organisations/Water User Associations on barren land. 
  2. They plan to install this project in the proximity within 5 km of the substations to avoid the high cost of sub-transmission lines.
  3. The State Electricity Regulatory Commission will determine the feed-in tariff for the solar power generated which will be purchased by DISCOMs.
  4. The DISCOM will be entitled to receive PBI at a rate of Rs. 0.40 per unit purchased or Rs. 6.6 lakh per MW of installed capacity, whichever is lower, for five years starting from the Commercial Operation Date (COD).

• Component B: To install 17.50 lakh stand-alone solar agricultural pumps. 
  1. The farmers will be provided with standalone solar agriculture pumps of capacity up to 7.5 HP in replacement of existing diesel agriculture pumps/irrigation systems in off-grid areas, where there is non-availability of grid supply.
  2. The state government will provide at least a subsidy of 30% to the farmers and the remaining at-most 40% will be provided by farmers. Under this component, a CFA of 30% of the benchmark cost of the stand-alone solar agriculture pump will be provided. By doing this, bank finance can be used by farmers where they initially pay only 10% of the cost and the remaining 30% of the cost is loan.
  3. For the North Eastern States, the CFA of 50% of the benchmark costs would be lower if the stand-alone solar pump is provided. In this case, the state government will give at least a subsidy of 30% and the remaining 20% will be provided by the farmer.
• Component C- Part 1- Individual Pump Solarisation– Under this component, the scheme aims for the solarisation of 10 lakh Grid Connected Agriculture Pumps. 
  1. This will help farmers generate solar power to meet irrigation needs and the excess solar power will be sold at a fixed tariff to DISCOMs.
  2. In this case, a CFA of 30% of the benchmark cost which is lower than the solar PV component will be provided. The farmer will be provided with at most 40% of the subsidy and the state government will give at least a subsidy of 30%. By doing this, bank finance can be used by farmers where they initially pay only 10% of the cost, and the remaining up to 30% of the cost is a loan.
  3. For the North Eastern States, the CFA of 50% of the benchmark costs would be lower if the stand-alone solar pump is provided. In this case, the state government will give at least a subsidy of 30% and the remaining 20% will be provided by the farmer.

• Component C- Part 2- Feeder Level Solarisation– Guidelines for solarisation of agricultural feeders were issued in 2020 where agricultural feeders are not separated, loan for feeder separation may be taken from NABARD or PFC/REC.
  1. Solar plants with the capacity to meet the agricultural load requirements of the selected feeder can be installed through either the CAPEX or RESCO mode, with a project duration of 25 years. A 30% CFA on the installation cost of the solar power plant (up to Rs. 1.05 Cr/MW) will be provided. 
  2. However, for the North Eastern States, Sikkim, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Lakshadweep, and A&N Islands, a 50% subsidy is available. Farmers will receive reliable day-time power for irrigation at no cost or a tariff determined by their respective state.

How to avail the financial assistance for these components

• Component A– In this component, if the farmers or cooperatives are not able to arrange the equity required for setting up the SEPP, they can choose to develop the SEPP through developers or even through local DISCOM. The land owner will get the lease rent as a part of a mutual agreement between the parties.

Further, to avail of the PBI, the implementing agencies are required to submit their claims for the projects with a one-year completion period of 5 years from COD along with the signed copy of the Joint Metering report and Receipt of lease rent paid to the beneficiaries.

• Component B and C (IPS)– In this component, under the MNRE scheme, they will issue state-wise allocations for solar pumps and solarisation of existing grid-connected pumps after approval by a Screening Committee. 

Post-implementation agencies accept the allocation and submit their detailed proposal, the final sanction will be issued by MNRE. For this, the projects must be completed within 24 months of sanction by the Group Head and up to 6 months by the Secretary, MNRE, upon valid justification from the implementing agency.

Once the letter of award is issued to vendors, an advance of up to 40% of the applicable CFA will be released to the implementing agency.

The remaining CFA, along with service charges, will be provided upon receipt of the Project Completion Report, Utilization Certificates, and other required documents. Both MNRE’s CFA and state government subsidies will be deducted from the system cost, and the beneficiary will only need to pay the remaining balance.

• Component C (FLS)–  Under the FLS, the CFA will be released as follows for CAPEX and RESCO modes:

CAPEX: An advance CFA of up to 40% of the total eligible CFA will be released to DISCOMs after completing the tendering process and signing the work agreement with the EPC contractor for solar plant installation. The remaining CFA will be released once the solar power plant is successfully commissioned and starts supplying power to the agriculture feeder(s).

RESCO: No advance CFA will be provided for this. Instead, up to 100% of the total eligible CFA will be released to the RESCO developer through DISCOM upon successful commissioning and declaration of the Commercial Operation Date (COD) of the solar power plant.

Benefits of PM Kusum Yojana

The scheme is specifically designed for farmers to reduce their dependence on grid electricity and traditional fuel sources. Let’s look at the other benefits of the scheme-

1. Reduction in Energy Costs– The Kusum Yojana scheme helps farmers reduce their energy bills significantly by using solar-powered pumps and leads to major long-term savings.
2. Income generation through solar power– Farmers can generate additional income by selling excess solar energy back to the grid.
3. Sustainability in agriculture: The Kusum Yojana scheme promotes sustainable agriculture by encouraging the use of renewable solar energy.

Kusum Yojana Application Process

The application procedure for the PM Kusum Yojana is simple and user-friendly. Follow the below steps-

1. Visit the official website which is the MNRE website or the state-specific Kusum Yojana portal.
2. Farmers need to initiate registration by creating an account to begin the process.
3. Provide necessary information such as name, address, contact, and land details and they must specify the type of power or pump they are interested in.
4. Submit the required documents along with the application form and once submitted, it will be reviewed.
5. Once the application is approved, the subsidy will be granted and the installation process will begin at the farmer’s location.

Kusum Yojana Status and Updates

Once the application is submitted for the Kusum Yojana, farmers can check their application status through the official website by simply logging in with their application number. 

Regular updates about Kusum Yojana Rajasthan—one of the most successful states in adopting this scheme—are also available on these portals.

Rajasthan has made significant progress in implementing Kusum Yojana. The state has already installed numerous solar-powered pumps, benefitting farmers by reducing their electricity bills and benefitting farmers by generating additional income.

Challenges in the Implementation of PM Kusum Yojana

Although it is beneficial for farmers, the Kusum Yojana scheme does face some challenges such as:

1. Lack of Awareness- Farmers residing in rural areas or remote areas are not fully aware of the scheme.
2. High Initial Costs- There are subsidies provided to farmers but they still find it difficult to afford the installation costs.

The government is addressing these challenges through campaigns, awareness drives, partnerships with financial institutions, and improving their infrastructure.

Conclusion

The PM Kusum Yojana is a great initiative by the government that can significantly benefit Indian farmers. 

Promoting the use of solar pumps and solar power generation helps farmers with cost reduction, promotes sustainable agriculture, and helps generate additional revenue. 

There are three components of the scheme to understand the infrastructure to be provided to the farmers. The Kusum Yojana Subsidy ensures that solar energy becomes an affordable option for farmers which would help reduce dependency on other sources of energy.

The future of this scheme looks promising and as we move towards a more sustainable energy future, the PM Kusum Yojana plays an important role in the energy transition.

If you are a farmer or associated with farmers, you must avail the benefits of PM Kusum Yojana by visiting its official website. Apply for solar pumps or solar power systems and don’t miss out on any opportunities to reduce energy consumption and generate additional income.