Context: Recently, Ministry of New and Renewable Energy (MNRE) has removed the clause of providing performance bank guarantee (PBG) for solar power generators under the PM-KUSUM scheme.

Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan (PM-KUSUM) Scheme

• It is a scheme to subsidise farmers to install solar irrigation pumps for cultivation.
• Each farmer will receive a 60% subsidy to set up tube wells and pump sets and 30% of the total cost as a loan from the Government.

It has three components

• Component A: setting up 10,000 megawatts (MW) of decentralised grid connected RE power plants on barren land.
• Component B: installation of 17.50 lakh standalone solar agriculture pumps.
• Component C: solarisation of 10 lakh grid-connected agriculture pumps.

Aim: to provide water and energy security to farmers and enhance their income.

Financial assistance for the scheme is as follows

• Component-A:  Procurement Based Incentive (PBI) will be provided for the first five years by MNRE to DISCOMs, for buying the power from farmers/developers.

Component B and C

• CFA of 30% of the benchmark cost or the tender cost, whichever is lower. State Government subsidy 30%; Remaining 40% by the farmer.
• In North Eastern States, Sikkim, J&K, Himachal, Uttarakhand, Lakshadweep and A&N Islands, CFA of 50%, State Government subsidy 30%, Remaining 20% by the farmer.
• State Nodal Agencies (SNAs) will coordinate with States/UTs, Discoms and farmers for implementation of the scheme.

Eligible Categories for KUSUM Scheme

• An individual farmer
• A group of farmers
• Farmer producer organisation (FPO)
• Panchayat
• Co-operatives
• Water User Associations

Benefits of the scheme

• Decentralized renewable power can replace Agriculture Diesel pumps with Solar Water pumps and Solarise Grid connected Agriculture pumps.
• Location of power plants closer to the agriculture will result in reduced Transmission losses for STUs and Discoms.
• Solarization can reduce dependence of these pumps on conventional sources of energy supplied by DISCOMs.
• It will also reduce their burden of subsidy on agriculture consumption of electricity.
• The solar pumps will save the expenditure incurred on diesel for running diesel pump.
• It provides the farmers a reliable source of irrigation.
• It will provide additional source of income to farmers who will be in a position to sell the surplus power to DISCOMs.
• It will ensure that sufficient local solar/ other renewable energy-based power is available for feeding rural load centres and agriculture pump-set loads.
• Increased use of renewable energy helps to mitigate pollution in farms and opens a gateway to eco-friendly cultivation.