PM-KUSUM: Focus shifts from pump to agri feeder

The Centre has now introduced modifications to an existing component of the PM-KUSUM scheme – a farmer income support and a de-dieseling scheme – so as to channelise its focus on solarising agricultural feeders instead of pumps. This move would obviate the need for farmers to replace every existing pump in a village with a solar pump.

It will now bear 30 per cent of the cost of building a small solar plant to supply electricity to the agricultural feeder, which essentially supplies electricity to all the pumps in a village. Hitherto, under component C – which has now been changed – of the PM-KUSUM scheme, farmers were being provided 30 per cent subsidy from the Centre and another 30 per cent from their State government to replace their existing grid connected agricultural pumps with grid connected solar pumps.

“Now it was being felt that since farmers are not charged for the electricity supplied to agricultural pumps, being asked to pay 40 per cent of the cost of a solar pump was still not attractive enough for them, despite the offer of selling unused solar electricity generated by the pump to distribution companies,” said an official at the Ministry of New and Renewable Energy

Under this new sub-scheme, the Centre will bear 30 per cent of the cost of building a small solar plant to supply electricity to the feeder, eliminating the need to replace every existing pump with a solar pump.

State-owned discoms are expected to pay the balance 70 per cent of the cost. “Discoms currently procure power at about ₹6 per unit. The solar plant at feeder level will bring this down approximately to ₹2 per unit. So discoms will be able to recover their investment in 4.5 years,” the official said.

If State governments are reluctant to foot the bill, they would be able to avail loans from NABARD or they can even launch tenders for these proposed solar plants and sign PPAs with winning developers.

The new sub-scheme has witnessed major interest, receiving responses from State governments for solarising 36 lakh pumps this way, while the ministry’s sanctioned capacity is for 15 lakh pumps. “A few States are still sending in their proposals,” the official added.

Slow blooming KUSUM

Launched in July 2019, the PM-KUSUM scheme has failed to meet its targets mainly due to Covid-19 lockdown, the official said. “At many places, villagers did not allow the vendors enter the village during the pandemic,” the official added.

Further, State governments gave the go-ahead for only about one-third of the capacity that was sanctioned and tendered by the Centre, which disrupted the economies of scale that winning manufacturers had expected, the official added.

When the impact of Covid-19 began subsiding, floods in China affected the solar glass supply chains and drove up prices, while aluminium prices also shot up. These resulted in rising cost of solar module procurement and further dampened the scheme, the official said.

However, uptake of the scheme is expected to accelerate, the official said. The new tender by EESL in January for manufacturing about 3,00,000 solar pumps has received bids for three times the tendered amount. States have also ramped up activity as their pandemic-hit finances have improved. For instance, the Rajasthan government has approved the budget for 50,000 pumps under component B of the scheme.

COMMENT NOW