Golden Opportunity for Exservicemen to get Subsidy in Solar Energy Sector as Entreprenure

Golden Opportunity for ESM to become Entrepreneurs in the growing Solar Energy Sector by taking benefit under Component A of PM Kusum Yojna ( implemented by Ministry of New & Renewable Energy). 

1.     What is the PM-KUSUM scheme? 

PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) is the scheme of Ministry of New and Renewable Energy (MNRE), Government of India aimed at supporting the agriculture sector through setting up of decentralized solar power plants, replacement of agriculture diesel pumps with solar agriculture water pumps and solarisation of existing grid connected agriculture pumps.

 2.   What are the targets of the PM-KUSUM scheme? 

PM-KUSUM aims to support the beneficiaries through three components under the scheme. The targets under each of the components are: 

• Component-A: Setting up of 10,000 MW of Decentralized Ground/ Stilt Mounted Grid Connected Solar up to 2MW • Component-B: Installation of 20 Lakh Standalone Solar Agriculture Pumps • Component-C: Solarisation of 15 Lakh Grid Connected Agriculture Pumps through individual pump as well as through Feederlevel Solarisation 

3.   Who are the key stakeholders under the scheme? 

• Beneficiaries: Individual Farmers, Group of Farmers, Water User Associations, Cooperatives, panchayats, Farmer Producer Organisations (FPO), Primary Agriculture Credit Societies (PACS), Community/clusterbased irrigation system as beneficiaries. • Implementing Agencies: State Nodal Agencies, State Agriculture Department, DISCOMs, Minor Irrigation Department, GENCO, any other Department designated by State Government • Financial Institutions • Vendors 

4.   What are the different renewable technologies covered in the scheme? 

Only solar power technology is covered under the scheme for all the components. 

5.   What is a solar power system under Component A? 

A solar power system utilizes photovoltaic (PV) modules to convert solar energy received from the sun into electricity. 

6 What are Solar Water Pumps/Solar Agriculture Pumps under Component B and C? 

A solar agriculture pump is a type of pump which runs on solar energy and does not require any fuel (diesel, kerosene, etc.) or external source of electricity to provide water for irrigation. 

7 What is the difference between individual pump solarisation and feeder level solarisation under Component C?

 In case of individual pump solarisation, a single grid connected pump is solarised through installation of solar panels; and by connecting it to pump to provide power. In case of feeder level solarisation, all grid connected pumps connected across a particular feeder can be solarised through a single aggregate solar power plant of larger capacity, which is to be installed near respective substation. This feeder level solar plant will be responsible for supply of electricity to the agriculture pumps through the feeder. 

8    Who are responsible for installation of Solar Power Plants under Component A? 

Individual Farmers/Group of farmers/Water User Associations/Framer Producer Groups/Primary Agriculture Credit Societies/Community-Cluster based Irrigation Systems known as Renewable Power Generators (RPGs) can set up Solar Power Plants

Application for Loan under Component A of of PM KUSUM  Scheme

Main Features and Scheme Details of PM KUSUM Yojna

About Component A:

Solar energy-based power plants (SEPP) of capacity 500 kW to 2 MW will be setup by individual farmers/ group of farmers/ cooperatives/ panchayats/ Farmer Producer Organisations (FPO)/Water User associations (WUA) hereinafter called Solar Power Generator (SPG). In the above specified entities are not able to arrange equity required for setting up the SEPP, they can opt for developing the SEPP through developer(s) or even through local DISCOM, which will be considered as SPG in this case.DISCOMs will notify sub-station wise surplus capacity which can be fed from such SEPP to the Grid and shall invite applications from interested beneficiaries for setting up the solar energy plants.The solar power generated will be purchased by DISCOMs at a feed-in-tariff (FiT) determined by respective State Electricity Regulatory Commission (SERC).

DISCOM would be eligible to get PBI @ Rs. 0.40 per unit purchased or Rs. 6.6 lakh per MW of capacity installed, whichever is less, for a period of five years from the Commercial Operation Date (COD).Component B:Individual farmers will be supported to install standalone solar Agriculture pumps of capacity up to 7.5 HP in off-grid areas, where grid supply is not available. CFA of 30% of the benchmark cost or the tender cost, whichever is lower, of the stand-alone solar Agriculture pump will be provided. The State Government will give at-least a subsidy of 30%; and the remaining at-most 40% will be provided by the farmer. Bank finance can be availed by farmer, so that farmer has to initially pay only 10% of the cost and remaining up to 30% of the cost as loan.In North Eastern States, Sikkim, Jammu & Kashmir, Himachal Pradesh and Uttarakhand, Lakshadweep and A&N Islands, CFA of 50% of the benchmark cost or the tender cost, whichever is lower, of the stand-alone solar pump will be provided.

The State Government will give at-least subsidy of 30%; and the remaining at-most 20% will be provided by the farmer.

About Component B:

Individual Pump Solarisation (IPS)Individual farmers having grid connected agriculture pump will be supported to solarise pumps. Solar PV capacity up to two times of pump capacity in kW is allowed under the scheme.The farmer will be able to use the generated solar power to meet the irrigation needs and the excess solar power will be sold to DISCOMs.CFA of 30% of the benchmark cost or the tender cost, whichever is lower, of the solar PV component will be provided.

The State Government will give at-least subsidy of 30%; and the remaining at-most 40% will be provided by the farmer. Bank finance can be availed by farmer, so that farmer has to initially pay only 10% of the cost and remaining up to 30% of the cost as loan.In North Eastern States, Sikkim, Jammu & Kashmir, Himachal Pradesh and Uttarakhand, Lakshadweep and A&N Islands, CFA of 50% of the benchmark cost or the tender cost, whichever is lower, of the solar PV component will be provided. The State Government will give a subsidy of at-least 30%; and the remaining at-most 20% will be provided by the farmer.

About Component C:

Component C: Feeder Level Solarisation (FLS)Instead of the individual solar pumps the states can solarize the agriculture feeders. Guidelines were issued on 04.12.2020.Where agriculture feeders are not separated, loan for feeder separation may be taken from NABARD or PFC/REC. Further, assistance for feeder separation may be availed from the Revamped Distribution Sector Scheme (RDSS) of the Ministry of Power. However, mixed can also be solarised.Solar plants of capacity that can cater to the requirement of the agriculture load of the selected feeder can be installed through CAPEX/RESCO mode for a project period of 25 years.CFA of 30% on the cost of installation of solar power plant (up to Rs. 1.05 Cr/MW) will be provided. However, in the North Eastern States, Sikkim, Jammu & Kashmir, Himachal Pradesh and Uttarakhand, Lakshadweep, and A&N Islands 50% subsidy is available.The farmers will get day-time reliable power for irrigation free of cost or at tariff fixed by their respective state.

How to avail the PM KUSUM Scheme Benefits ?

Benefit of Component A


The Solar power generated will be purchased by DISCOMs at a feed-in-tariff (FiT) approved by the respective State Electricity Regulatory Commission (SERC).In case the farmers/ group of farmers/ cooperatives/ panchayats/ Farmer Producer Organisations (FPO)etc. are not able to arrange equity required for setting up the SEPP, they can opt for developing the SEPP through developer(s) or even through local DISCOM, which will be considered as RPG in this case. In such a case, the land owner will get the lease rent as mutually agreed between the parties.To avail of the PBI, the Implementing Agencies are requested to submit their claims for the projects which have been completed one year post their commissioning date, till 5 years from COD, along with the Signed Copy of the Joint Metering Report and Receipt of lease rent paid to the beneficiary/land-owner, wherever applicable.


Benefit of Component B & Component-C (IPS)



State-wise allocation for solar pumps and solarisation of existing grid-connected pumps will be issued by MNRE, after approval by a Screening Committee under the chairmanship of the Secretary, MNRE.On acceptance of the allocated quantity by the implementation agencies and submission of the detailed proposal as per MNRE format, within a given time, the final sanction will be issued by MNRE.Projects for solarisation or installation of pumping systems shall be completed within 24 months from the date of sanction by MNRE.

Extension in project completion timelines, up to a maximum period of three months, will be considered at the level of Group Head in MNRE and up to 6 months at the level of Secretary in MNRE on submission of valid reasons by the implementing agency.Funds up to 40% of the applicable CFA for the sanctioned quantity would be released as advance to the implementing agency only after placement of letter of award(s) to the selected vendors.The balance eligible CFA along with applicable service charges would be released on acceptance of the Project Completion Report in the prescribed format, Utilization Certificates as per GFR, and other related documents by the Ministry.

MNRE CFA and State Government’s subsidy will be adjusted in the system cost and the beneficiary will have to pay only the remaining balance.Component-C (FLS)CFA applicable under the FLS can be released in the following manner wrt CAPEX/ RESCO mode of implementation of the FLS.CAPEX:- Advance CFA up to 40% of the total eligible CFA will be released to DISCOMs on completion of tendering process and signing of work agreement with EPC contractor selected for installation of solar power plant. Balance CFA will be released on successful commissioning of solar power plant and plant starts supplying power to agriculture feeder(s).RESCO:- No advance CFA. Further, the CFA up to 100% of the total eligible CFA will be released to the RESCO developer through DISCOM on successful commissioning and declaration of the Commercial Operation Date (COD) of the solar power plant.

To get benefit Whom to contact ?

For implementation agencies under Component A, Component B, and Component C (IPS) kindly visit

https://pmkusum.mnre.gov.in/State_Implementing_Agencies.html
For visiting the central Portal of the PM-KUSUM kindly visit
https://pmkusum.mnre.gov.in/landing.html
For Implementing Agencies & How to Apply information kindly visit
https://pmkusum.mnre.gov.in/State_Implementing_Agencies.html
For vendors and rates of the standalone solar pump information kindly visit https://pmkusum.mnre.gov.in/State_PumpCost.html

For further details, please visit www. pmkusum.mnre.gov.in

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