PM KUSUM Yojana

PM Kusum Yojana was introduced by the Government of India to increase the income of farmers as well as provide them solar agriculture pump sets for irrigation on subsidy. 

PM-KUSUM Yojana was granted its approval from the administrative side in March 2019. The scheme was announced by the Ministry of New and Renewable Energy (MNRE) to enable the construction of solar pumps as well as other renewable power sources across the country. 

PM Kusum Yojana Subsidy – A No Cost Solar Pump Scheme

 

Solar

As part of the PM Kusum Yojana, the Government will supply solar-powered pump sets to farmers on subsidy. The main goal for Kusum Yojana 2021 is to provide farmers with the latest technology to generate electricity. These solar pumps offer two advantages, they help farmers with irrigation as well as allow them to create electricity.

Under the PM Kusum Yojana, farmers will receive subsidies on more efficient and higher-quality solar-powered pumps. The farmers will need to pay only 10 percent of the total amount to set up the solar pump. 60 percent of the total cost will be borne by Government, while the banks will pay the other 30 percent as credit/loan.

In the Kusum Yojana, farmers who run solar-powered pumps using solar energy can sell their power back to power distribution units of states and earn additional income from it.

Although the scheme was in place in the past, but it was not implemented until now. Ministry of Renewal under the Central Government plans to extend the scheme to 2021-22 by 2022-22. The central Government believes that the PM Kusum Yojana could increase the amount of money farmers earn. In the current Union Budget 2021-22, the Government of India has allotted an amount of Rs.1,000 crore to the Kusum Yojana.

Objectives of PM KUSUM Yojana

Under the PM KUSUM Yojana farmers, groups of farmers, panchayats, and cooperative societies may apply for solar pumps. The total cost for the scheme is split into three categories where the Government will assist farmers. The Government will offer 60 percent of the subsidy to farmers. The Government will pay the remaining 30 percent of the cost by way of loans. Farmers need only pay 10 percent of the costs to the solar pump project. The farmers can further sell the electricity produced by the solar panel. The farmers could use the profits made from selling the solar electricity to start a new venture.

Benefits of PM KUSUM Yojana 

In the Union Budget, the Central Government of India has allotted an amount of Rs.1,000 crore to ensure the smooth implementation of Prime Minister Kusum Yojana. The benefits of the scheme for PM Kusum Yojana includes:

  • It offers a risk-free source of income to farmers.
  • The yojana provides an uninterrupted power supply to farmers and will reduce the farmer’s burden for farm power.
  • It provides an ability to monitor the overexploitation of groundwater.
  • It will help in reducing the carbon footprints from agriculture.

Apply Online for Kusum Yojana

The Government has been encouraging farmers to adopt solar power by launching a variety of schemes. Registration for the PM KUSUM scheme of the Central Government has been launched in several states. The scheme intends to provide 90 percent of the subsidies to solar energy pumps for agricultural use.

To be eligible for a free solar pump through PM Kusum Yojana, farmers need to fill out an application online through the official website mnre.gov.in

Components of the PM KUSUM Yojana

The scheme is split into three components. Take a look.

Component A

Features:

  • Under this program, the workers will build 10,000 MW of renewable energy power stations connected to grids on empty land.
  • Cooperatives will set up the grids, farmers, and groups of farmers panchayats, Water User Associations (WUA), and Farmer Producer Organizations (FPOs).
  • Power projects will be constructed within 5 km from the sub-station.

In this section, solar or other renewable energy powered power stations (REPP) with capacities ranging from 500 kW – 2 MW, will be set up by private farmers or groups of cooperatives/farmers or panchayats/ Farmer producer Organizations (FPO)/Water User associations (WUA) in the future referred to as Renewable Power Generator (RPG). 

However, states/DISCOMs can permit installation for solar and other renewable energy-based power plants with a capacity smaller than 500 kW in certain circumstances. The REPP should be placed within a radius of five kilometers of the substations to minimize the high costs of sub-transmission lines and transmission losses.

The scheme’s renewable energy-based power plants (REPP) will be mainly implemented on Barren and uncultivated land. Agriculture-related land is also permissible under the scheme, provided that solar panels are erected in an exemplary manner. An elevated structure to allow for the installation of Solar panels, with sufficient space between rows of panels to ensure that agriculture is not restricted. 

The Renewable Power Generator (RPG) could choose any renewable technology or energy source while responding to the offer. However, in the case of land suitable for cultivation with solar panels, these can be erected on stilts to ensure that farmers can work the land and reap the benefits from lease rental. 

In such a scenario, DISCOM can also offer bids, in the case of substations with specifics, where the setting up of solar power projects on stilts could be mandatory required and bids for energy tariffs solicited accordingly.

Component B

Features:

  • Under Kusum Yojana, farmers will be assisted in setting up 17.50 Lakh Stand-alone Solar Pumps.
  • The power of the pumps could be as high as 7.5 HP to allow for the replacement of the agricultural diesel pumps.
  • The capacity may be greater than 7.5 HP; however, financial assistance is only available up to 7.5 HP capacity.

Under this component, individual farmers will be able to install solar agriculture pumps that can reach 7.5 HP to replace the existing diesel agriculture pumps or irrigation systems in areas that have grid service not accessible. Installing new pumps will be allowed under this program, except for zones of darkness. Pumps with capacities greater than 7.5 HP could be permitted, but the CFA applies only to pumps of 7.5 HP. 

Water User Associations and communities/cluster irrigation systems are also included in this section. But, priority will be given to marginal and small farmers. To minimize use of water for irrigation purposes, priority will be given to farmers who are using micro-irrigation systems or who are covered by Micro-irrigation schemes or opt for micro-irrigation systems. 

The size of the pump will be chosen based on the size of the water table area, the covered land, and the amount of water needed to be used for irrigation. The solar PV power in kW for pump capacity in HP will be allowed in accordance with MNRE requirements under the scheme. 

It is mandatory to utilize locally-made solar panels that have indigenous solar modules and cells. In addition, the motor pump set controller and the balance of the system must be made in-house. The manufacturer must disclose the list of imported components used in the production of the solar water pumping system.

Component C

Features:

  • This yojana is for the solarisation of 10 lakh grid-connected agriculture pumps. Individual farmers will receive support to convert their pumps to solar energy if they have grid-connected pumps.
  • The extra solar power will be sold directly to Distribution Companies of India (DISCOMs) at a fixed rate.
  • The farmer’s need for irrigation will be fulfilled by the generated solar energy.

Under this component, all farmers with grid-connected agriculture pumps will be assisted by the solarisation of pumps. Solar PV capacities as high as two times pump power in kW are permitted under the program. However, the State can specify less solar PV power in kW. In all cases, it must not be lower than the capacity of the pump HP, e.g., for a 2 HP pump, it should not be less than 2kW. 

The farmer can utilize the generated solar power to fulfill the requirements for irrigation, and any excess sunlight generated will also be transferred to DISCOMs. This section will also cover water User Associations as well as community/cluster irrigation systems. But, priority would be given to marginal and small farmers. 

To minimize water use for irrigation purposes, the preference will be given to farmers who use micro-irrigation systems or those covered under micro-irrigation schemes.

Implementation of KUSUM Yojana

  • The first thing to be done is to implement the trial run of Component A and Component C to have a capacity of 1000 milliwatts or 1 million pumps.
  • Following the successful execution of a pilot program of Components C and A, these components are expected to increase capacity and pumps.
  • Based on received requests, capacity will be approved by various State Government Agencies.
  • In Components A and C, allocation or tender will be handled by the organization nominated by State Govts to administer each component.

Financial Assistance

Component A

To purchase the electricity from farmers, Procurement Based Incentive (PBI) at 40 paise/kWh or the equivalent of Rs. 6.60 lakh/MW/year, or lesser, shall be offered for the first five years by MNRE in exchange for Distribution Companies of India (DISCOMs).

Component B & C

  • The financial assistance of 30 percent of the benchmark cost or the tender price, whichever is lower.
  • State Subsidy from the Government is 30 percent
  • Rest 40% goes to the farmer

Central Finance Assistance for farmers in states such as J&K, Himachal Pradesh, Uttrakhand, North Eastern States, Sikkim, Lakshadweep, and Andaman Nicobar Islands of 50 percent, State Government subsidy 30 percent, and the rest of the 20% will be bear by the farmer.

Frequently Asked Questions on PM KUSUM Yojana

Q1. When was the PM Kusum Yojana introduced?

Answer: The PM KUSUM scheme was introduced by the Government of India in July 2019 under the Ministry of New and Renewable Energy.

Q2. What is the subsidy applicant farmers can take advantage of from the PM Kusum Yojana?

Answer: The maximum amount of subsidy available in this scheme is up to 60% for farmers. A further 30 percent of the cost is offered as loans. Thus, farmers will need to submit just 10 percent of the total cost.

Q3. Do banks offer loans to farmers applying under Kusum Yojana?

Answer: Yes, most financial institutions, including public and private sector banks, RRBs (Regional Rural Banks), also offer loans to farmers for Kusum Yojana.

Q4. How to apply for the PM Kusum Yojana?

Answer: To apply under PM KUSUM Yojana, you can register at the official website of KUSUM Yojana. After filling out the yojana application form online, you will be required to submit the necessary information, like an Aadhaar card or land-related documents, like Khasra Khatauni and an application form for declaration, a bank account passbook, and so on. After all the required forms and supporting, documents are accepted, you will be registered under the PM Kusum Yojana.

Q5. How do I get MNRE’s Certificate?

Answer: The Ministry of New and Renewable Energy (MNRE) is a government agency involved in all aspects of renewable energy. The MNRE certificate is accessible following MNRE registration through the official website. In other cases, applicants may visit the nearest bank that provides credit under the scheme. They will need to fill out and submit the application for a loan along with the required documents, as specified by the lender or the bank.

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