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

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

As a part of Intended Nationally Determined Contributions (INDCs), India has committed to
increase the share of installed capacity of electric power from non-fossil-fuel sources to 40%
by 2030.
The Cabinet had approved scaling-up of solar power target from 20,000 MW of Grid
Connected Solar power Projects to 1,00,000 MW by 2022.
While Large Scale Solar power generation projects are being installed to achieve the ambitious
target of 100 GW of Solar Power generation by 2022, it has been planned to simultaneously
develop decentralized Solar energy and other renewable energy generation Plants of capacity
up to 2 MW which could be connected directly to existing 33/11 kV or 66/11 kV or 110/11 kV
sub-stations of Distribution Company, thus saving in transmission system requirement apart
from T&D losses. Such plants near these sub-stations may be developed, preferably by farmers,
giving them an opportunity to increase their income by utilising their barren and uncultivable
land for solar or other renewable energy based power plants. Cultivable land may also be used
if the Solar plants are set up on stilts where crops can be grown below the stilts and sell RE
power to DISCOMs.
Besides, developing decentralized renewable power, it is planned to replace Agriculture Diesel
pumps with Solar Water pumps and Solarise Grid connected Agriculture pumps. At present,
over 30 million agricultural pumps are installed in India, out of which nearly 10 million pumps
are diesel based. The Distribution Companies (DISCOMs) are not in a position to energize
these pumps through grid connection as seen from the long waiting lists with such Distribution
Companies. Hence there is a need to provide energy to these pumps through solar energy. Also,
over 20 million grid-connected agriculture water pumps installed in the country consume more
than 17 percent of total annual electricity consumption of the country. Solarization of the same
can reduce dependence of these pumps on conventional sources of energy supplied by
DISCOMs and thus reducing their burden of subsidy on agriculture consumption of Electricity.
This will also provide additional source of income to farmers who will be in a position to sell
the surplus power to DISCOMs.

The new Scheme has provision for the decentralised renewable energy plants, Solar agriculture
water pumps and solarisation of existing Grid connected Agriculture pumps.
2. Approval of the New Scheme for Farmers
The Government of India has launched New Scheme for Farmers with following components:
i. Component-A: Setting up of 10,000 MW of Decentralized Ground/ Stilt Mounted Grid
Connected Solar or other Renewable Energy based Power Plants;
ii. Component-B: Installation of 17.50 Lakh Stand-alone Solar Agriculture Pumps; and
iii. Component-C: Solarisation of 10 Lakh Grid Connected Agriculture Pumps.
The Component-A and Component-C will be implemented initially on pilot mode for 1000
MW capacity and one lakh grid connected agriculture pumps respectively and Component-B
will be implemented in full-fledged manner with total Central Government support of Rs.
19,036.5 Crore.

After successful implementation of pilot project of Components A and C, the same shall be
scaled up with necessary modifications based on the learning from the pilot phase with total
Central Government support of ₹ 15,385.5 Crores.
All three components of the scheme aim to add Solar capacity of 25,750 MW by 2022 with the
total Central Financial Support of ₹ 34,422 crore.
3. Implementation mechanism:
These guidelines have been formulated to provide broad implementation framework of the
I.Component A: Setting up of 10,000 MW of Decentralized Ground/Stilt Mounted Grid
Connected Solar or other Renewable Energy based Power Plants
Under this component, solar or other renewable energy based power plants (REPP) 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 Renewable Power Generator (RPG). However, States/DISCOMs may allow setting-up
of solar or other renewable energy based power plants of capacity less than 500 kW in specific
cases. The REPP will be preferably installed within five km radius of the sub-stations in order
to avoid high cost of sub-transmission lines and to reduce transmission losses.
The Distribution companies (DISCOMs) will notify sub-station wise surplus capacity which
can be fed from such RE power plants to the Grid and shall invite applications from interested
beneficiaries for setting up the renewable energy plants. The renewable power generated will
be purchased by DISCOMs at a pre-fixed levelised tariff. In case, the aggregate capacity
offered by Applicants is more than notified capacity for a particular sub-station, bidding route
will be followed by DISCOMs to select Renewable Power generator and in such cases the pre-
fixed levelised tariff will be the ceiling tariff for bidding. Selection of bidders will be based on
the lowest tariff offered in the ascending order as quoted by the bidders in the closed bid or e-
reverse auction as the case may be. A model PPA (Power Purchase Agreement) to be executed
between RPG and DISCOMs has been prepared by MNRE and attached at Annexure-I. The
duration of PPA will be 25 years from Commercial Operation Date (COD) of the project. The
total energy purchased from these RE plants will be accounted for fulfillment of RPO by the
In case the farmers/ group of farmers/ cooperatives/ panchayats/ Farmer Producer
Organisations (FPO)/ Water User associations (WUA) etc. are not able to arrange equity
required for setting up the REPP, they can opt for developing the REPP 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 lease rent as mutually agreed between the parties. The lease rent may
be in terms of Rs per year per acre of land or in terms of Rs per unit energy generated per acre
of land area. The farmer(s) may opt for payment of lease rent directly in their bank account by
the DISCOM, from the payment due to the developer. A model Land Lease Agreement to
facilitate the beneficiaries has been prepared by MNRE and is attached at Annexure-II.
However, the terms of Land Lease Agreement may be finalised on mutual consent of concerned
The REPP under the scheme would be implemented primarily on Barren / uncultivable
land. Agricultural land is also permitted under the scheme provided that solar plants are
installed in stilt fashion (i.e. raised structure for installation of Solar panels) and with adequate
spacing between panel rows for ensuring that farming activity is not affected. The RPG would
be free to adopt any renewable energy source or technology while responding to the bid.
However, in case of cultivable land with solar plants, the same may be installed on stilts, so
that the farmers continue to cultivate the land, apart from getting the benefit of lease rent. In
such a case DISCOM may also float bids (in case of specific substations) where setting up of
solar projects on stilts may be mandatorily required, and bids for energy tariff invited
A. Selection and Implementation of Decentralised Renewable Energy Power Plants
a. Notification of sub-station wise generation capacity
DISCOM shall assess and notify RE generation capacity that can be injected in to all 33/11 kV
or 66/11 kV or 110/11 kV sub-station of rural areas and place such notification on its website
for information of all stakeholders. To facilitate farmers willing to lease out their land for
development of RE plants near above notified substation(s), as per provisions of this scheme,
DISCOM may also place list of such farmers on their website. However, the leasing of land of
any farmers will be a bi-partite agreement between the farmer and the developer and DISCOM
will not be held responsible for failure in getting the land leased out to a developer. To meet
additional demand DISCOM will augment the capacity of sub-station under IPDS or any other
b. Expression of Interest (EoI) for Short-listing of RPG
DISCOM or any agency authorized by the DISCOM shall invite 33/11 kV or 66/11 kV or
110/11 kV sub-station wise EoI from RPG to participate in selection process for development
of decentralised renewable power plants. The RPG shall submit their interest against the EoI
as per the schedule notified by DISCOM. An RPG will not be allowed to apply for more than
one renewable power plant for a particular 33/11 kV sub-station. The EoI of an RPG will also
be disqualified if it is found that its proprietor/partner/director/member has also filed EoI as
proprietor/partner/director /member for another RPG for the same sub-station.
The DISCOM or any agency authorized by the DISCOM may request to submit non-refundable
processing fee from the interested RPGs, which in no case shall be higher than Rs. 5000 per
MW or part thereof of the capacity applied for.
In order to ensure only quality systems are installed, prevailing MNRE/BIS specifications and
quality control orders applicable for solar modules, inverters, BoS and other equipment shall
be followed.
In case of REPP being developed by a developer, the Net-Worth of the developer should not
be less than Rs. 1.00 Crore per MW (of the capacity applied). This shall not be applicable for

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