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PM Kusum Scheme: Objectives, Components, Subsidy, Who will Apply

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PM Kusum Scheme

What is PM-KUSUM Scheme?

The PM-KUSUM or Pradhan Mantri Kisan Urja Suraksha Utthan Mahabhiyan scheme is an initiative launched by the Government of India under the aegis of the Ministry of New and Renewable energy (MNRE) in 2019. The scheme’s objective is to provide assistance installing off-grid solar pumps on village land (rural areas) and thus decrease their dependence on the grid. It is valid for grid-connected areas.

The idea is to increase farmers’ income by selling extra electricity generated and reducing the over-dependence of farmers on diesel. The scheme was launched by the Ministry of New and Renewable energy across the nation.

Name of Scheme

Kusum Yojana

Launched by

Former Finance Minister Arun Jaitley

Ministry

Ministry of Agriculture & Energy

Beneficiaries

Country farmers

Major Benefit

Providing Solar irrigation pump

Scheme Objective

Solar Irrigation pumps at Discounted prices

Scheme under

State Government

Name of State

Pan India

Post Category

Scheme/ Yojana

Aim of the KUSUM Scheme

Through this scheme, the government plans to add 25,750 MW of solar electricity by 2022. The Central government plans to infuse Rs. 34,422 crores in this scheme.

Objectives of the KUSUM Scheme

Under the scheme, farmers, cooperative societies, farmers-cooperative groups, and panchayats can apply to install solar pumps. The total cost incurred in implementing the project is so planned that the farmers’ financial burden is negligible. The overall cost is divided into three categories:

  • Government to provide a 60% subsidy directly to farmers
  • 30% will be provided through soft loans to farmers
  • 10% actual cost to be incurred by farmers.

Components of PM-KUSUM Scheme

There are three main components of the KUSUM scheme:

  • Component A – The scheme plans to add 10000 MW of Renewable power by establishing individual renewable power plants up-to 2 MW size. These power plants are to be decentralized, ground-mounted, and connected to the grid. These are to be set up on barren land and should come up within a 5km radius of the sub-station.
  • Component B – To install, 17.50 lakh standalone off the grid Solar Powered Agriculture Pumps with an individual capacity of the pump up-to 7.5 HP. It is meant to replace existing diesel pumps already in use. A farmer can install a higher capacity pump, but the financial assistance will only be granted to a 7.5 HP agriculture pump. 
  • Component C – To solarize 10 lakh on-grid or grid-connected agriculture pumps with individual pump capacity up-to 7.5 HP. The excess electricity generated from these plants will be sold to the respective DISCOMS on pre-fixed tariff bases.

How to implement the KUSUM scheme?

For implementing the KUSUM scheme, the State Nodal Agencies of MNRE will coordinate with respective States/UTs, Discoms, and farmers.

The components A and C under the scheme are to be implemented only in Pilot mode until 31st December 2019. On successful implementation of the Pilot project, the two components of the scheme will be further scaled up, after receiving necessary approvals.

Component B of the scheme, an ongoing sub-program is to be implemented in its entirety without any requirement of a Pilot project.

Implementation

Component A:

  •  Individual farmers, farmer groups, panchayats, cooperative societies, or farmer producer organizations can set up renewable power plants with 500 KW to 2 MW capacity. In case of failure to arrange funds, the above entities can collaborate with interested developers or with local DISCOMS to establish renewable power plants.
  • Once operational, the DISCOMS will notify regarding sub-station wise surplus power that can be fed to the grid through these renewable projects.
  • The surplus renewable power thus generated will be purchased on a feed-in tariff basis by local DISCOMS. The tariff is to be determined and fixed by the State Electricity Regulatory Commission.
  • The DISCOMS are eligible for Procurement Based Incentive (PBI) @ 40 paise per kWh or Rs 6.60 lakh per MW installed capacity per year, whichever is lower for five years.

Component B:

  • For standalone power pumps with 7.5 HP capacity, central financial assistance would be 30% of the tender cost or benchmark cost. The State government will provide a 30% subsidy, and another 30% will be arranged for farmers through Banks in the form of loans. Farmers will chip in with only 10% of the actual cost of the project.
  • In the North East, Himachal Pradesh, Uttarakhand, J&K, Andaman and Nicobar Islands, the Central assistance will be 50% of the tender cost or the benchmark cost, while 30% will be in the form of subsidy provided by State government. The rest 20% will be arranged by the farmer with loans up to 10% by banks and farmers, putting in 10% of the actual cost.

Component C:

  • The financial assistance provided to farmers in this grid-connected agriculture pump will be similar to component B. 30% cost will be CFA. In comparison, another 30% by the respective State government and out of rest 40%, Banks will provide loans for 30%, and the farmer has to arrange only 10% of the project’s cost.
  • For North-east, Himachal, Uttarakhand, Andaman & Nicobar Islands, 50% project cost will be funded by Central government, rest 30 % by State, and 10% cost is to be given as loan by banks. The farmers have to bear only 10% of the project cost.

Beneficiary

The scheme aims to provide stable and continuous income to farmers or rural landowners for 25 years. It will be put to good use of the barren or uncultivated land. In the case of cultivated land,  solar panels are installed at a height that doesn’t disrupt farming.

While providing a regular supply of electricity during the day to agricultural land, the close vicinity of the projects to sub-stations ensures low transmission loss to DISCOMS. It will wean away farmers from using diesel, another positive or win-win situation for the environment and the economy.

To increase farmer’s income and reduce their over-dependence on diesel, the KUSUM scheme was launched. The scheme puts to use the barren land in rural areas and cultivable fields for producing renewable energy. With the government’s financial assistance, both State and Central, the farmers’ financial burden is kept to the minimum. The KUSUM scheme can transform the rural economy for the better and improve the economic conditions of the farmers substantially.

Component wise Details of sanctions &State Implementing Agencies (2020-2021)

State

Component-A

Component-B

Component-C

Implementing Agency

Sanc. Capacity

Implementing
Agency

Sanc. Quantity

Implementing
Agency

Sanc. Quantity

(MW)

(No.)

(No.)

Chhattisgarh

No Demand

Chhattisgarh
Ren
ewableenergy
Devp. agency (CREDA)

20000

No Demand

Delhi

BSES Rajdhani Power Ltd.

10

No Demand

No Demand

BSES Yamuna Power Ltd.

Tata Power Delhi
Distribution Limited

Haryana

Uttar Haryana bijli
vitran nigam limited, (UHBVN)

25

Department of New and
Renewable Energy
, (DNRE), Haryana

15000

Department of New and
Renewable Energy
, (DNRE), Haryana

468

Dakshin Haryana bijli
vitran nigam limited,(DHBVN)

Himachal Pradesh

HP govt. Energy
Development Agency
, (HIMURJA)

10

Department of Agriculture, Govt. of HP

550

No Demand

Jharkhand

Jharkhand bijli Vitran
Nigam L
td. (JBVNL)

10

Jharkhand Renewable
Energy Dev
p. Agency (JREDA)

10000

Jharkhand Renewable
Energy Dev
p.
Agency (JREDA)

500

Gujarat

Gujarat Energy
Development
agency (GEDA)

40

Gujarat UrjaVikas
Nigam Limited
, (GUVNL)

4000

No Demand

Karnataka

Bangalore ElectricitySupplyCompany, (BESCOM)

50

Karnataka Renewable
Energy
Development
L
td. (KREDL)

6000

No Demand

Hubli Electricity Supply
Company
, (HESCOM)

Mangalore ElectricitySupplyCompany, (MESCOM)

Chamundeshwari ElectricitySupply Corporation Ltd. (CESC)

Kerala

Kerala StateElectricity
Board
, (KSEB) Ltd

10

 

TBD

5200

Madhya
Pradesh

Madhya Pradesh
Urja
Vikas
Nigam
, (MPUVN)

100

Madhya Pradesh
Urja
Vikas Nigam
Limited
, (MPUVNL)

25000

Madhya Pradesh
Urja
Vikas Nigam
Limited
,(MPUVNL)

15000

Maharashtra 

Maharashtra StateElectricityDistribution
company ltd. (MSEDCL)

300

Maharashtra Energy
Development
agency, (MEDA)

30000

Maharashtra StateElectricity
Distribution Company
L
td. (MSEDCL)

9000

Manipur

No Demand

Manipur Renewable EnergyDevp.agency (MANIREDA)

20

Manipur Renewable
Energy Dev
p.
Agency, (MANIREDA)

80

Meghalaya

TBD

10

TBD

1700

TBD

60

Odisha

No Demand

Orissa RenewableEnergy
Development Agency
,(OREDA)

2500

No Demand

Punjab

Punjab Energy
Dev
p. Agency, (PEDA)


30

Punjab Energy
Dev
p. Agency, (PEDA)


4500

Punjab Energy
Dev
p. Agency, (PEDA)

3900

Rajasthan

Rajasthan Urja
Vikas
Nigam Limited, (RUVNL)

325

Horticulture Department
Govt. of Rajasthan

25000

Jaipur VidyutVitran
Nigam Limited
, (JVVNL)

12500

Tamil
Nadu

No Demand

Agricultural Engineering
Department(AED),Govt. of TN

17500

TamilNadu Energy
Development Agency
,(TEDA)

20000

Tripura

Tripura StateElectricity
Corporation Limited
, (TSECL)

5

Tripura RenewableEnergyDevelopment Agency, (TREDA)

1300

Tripura RenewableEnergy
Development Agency
, (TREDA)

1300

Uttar
Pradesh

Uttar Pradesh New and
RenewableEnergy

Development Agency (UPNEDA)

75

Agricultural Department
Govt. of UP

8000

Uttar Pradesh
Power Corporation
L
td. (UPPCL)

1000

Total

 

1000

 

171070

 

69008

What is the cost distribution to establish a solar plant?

The cost distribution is as follows;

Central and State Government

60% subsidy

Banks

30% as loans to farmers

Farmers

10% of the actual cost

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KUSUM scheme FAQs:

1. When was the Kusum scheme launched?

The scheme was launched in 2019. Although two components (A and C) of the scheme were Pilot based projects initially, Component B was operational and is further ramped up by the agencies.

2. How can I avail of the benefit of the Kusum scheme?

By entering the details and filling the form online at the official Kusum yojna website, you can apply and, after that, avail the benefit of the scheme. You can download the Kusum form from – https://mnre.gov.in/solar/schemes/

3. What is the off-grid solar system?

The off-grid solar system is a standalone project. It includes not only solar panels but also requires other components such as batteries, inverter, grid box, accessories, etc. Here the generated electricity is stored and can be used as per requirement.

4. When was KUSUM scheme launched?

In July 2019, the guidelines for PM-KUSUM yojna were framed and subsequently the scheme was launched. MNRE-Ministry of New and Renewable Energy launched it for installing solar pumps and renewable power plants across the country.

5. What are the main components of Kusum scheme 2021?

The different components of Kusum scheme are:  Solar pump distribution – the first phase of the Kusum scheme includes distribution of the solar-powered pumps.  Establishment of Solar power factory – Government of India wants to encourage the establishment of Solar power plants in India.  Setting up of Solar-powered tube wells – To construct tubewells powered by solar power instead of diesel Genset.  By Modernization of Tube wells – By modernization of current tubewells by replacing old pumps with new pumps that are solar-powered.

6. How to check the list containing registered applications under Kusum scheme?

By following the given simple steps – Step 1 – Firstly visit Kusum Yojna official website. On the website, check the option – List of registered Kusum applications. Step 2 – Once you open the link, a list containing selected applications appear. You can check your name on the list.

7. How is Kusum scheme beneficial to Farmers?

Under the Kusum scheme, a farmer can solarize present grid-connected agricultural pump up to capacity 7.5HP. Solar PV capacity twice the pump’s capacity in KW is thereby allowed as per the scheme; however, states can determine the PV capacity. The solar power generated can be utilized for agriculture while the excess power can be sold to the electricity grid.

8. Who will be covered under Component B of the Kusum scheme?

Under component B of the Kusum scheme, People covered are:  Individual farmers  Water user associations  Community/Cluster-based irrigation system

9. Can farmers lease their agricultural land to interested parties for the establishment of the solar power plant?

Yes individual farmers under Component A of the Kusum scheme can lease/rent their land to a developer for the establishment of the renewable power plant.



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