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Whether KUSUM YOJANA is getting diverted from FARMER to DEVELOPERS ?

"Since the scale of an individual solar project with substation is relatively small, therefore in order to get the benefit of economies of scale, as well as to attract much creditable Solar Power Developers, multiple substations may be grouped as one bidding group. The SPD may be permitted to quote the tariff common for all projects under one group and SPD may sign a single PPA with Discom" .


PM KUSUM Yojana is Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) Yojana which was launched by the Government of India to increase the income of farmers and provide sources for irrigation and de-dieselising the agricultural sector.


The scheme is divided into three components. which are discussed further.

  • Component A- PM-KUSUM scheme aims to install grid-connected ground-mounted solar power plants (up to 2 MW) aggregating to a total capacity of 10 GW

  • Component B- install 2 million standalone solar pumps

  • Component C- solarize 1.5 million grid connected agricultural pumps

On 04.11.2020, Ministry had issued scale-up and expansion of Pradhan Mantri Urja Suraksha evam Utthaan Mahabhiyaan (PM KUSUM) Scheme. Under the scaled up Scheme, a target of solarization of 7.5 lakh existing agricultural pumps has been kept through feeder level solarization under Component-C.


For installation of feeder level solar power plants through RESCO model, the developers are to be selected on the basis of lowest tariff offered for supply of required solar power for a period of 25 years. The developer will get CFA @ 30% of the estimated cost of installation of solar power plant i.e. Rs. 1.05 Cr/MW (30% of Rs. 3.5 Cr/MW).


Many states like Maharastra, Rajasthan, MP etc have started releasing various tenders for PM KUSUM Component- C scheme and some tendering have been finalized with rates as well. However, on 12.07.2023, MNRE has issued an office memorandum which is an ammendment in guidelines for implementation of PM KUSUM Component-C Scheme wherein there is a mention of a clause for the "Selection of Solar Power Developers". The complete clause is as below:-

"Since the scale of an individual solar project with substation is relatively small, therefore in order to get the benefit of economies of scale, as well as to attract much creditable Solar Power Developers, multiple substations may be grouped as one bidding group. The SPD may be permitted to quote the tariff common for all projects under one group and SPD may sign a single PPA with Discom" .


If we decipher this clause, it clearly mentions that now Discom will start focussing on bigger projects under PM KUSUM Component so as to get the better tariff and creditable developers. Scheme will no more to support the farmers earning and farmer will only be restricted to the lease rent for their land.


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