KUSUM Scheme- Summary of Implementation guidelines

The scheme aims to add a solar capacity of 25,750 MW by 2022 with the total Central Financial Support of INR 34,422 crore.

Component A: 10,000 MW of decentralized ground-mounted, grid-connected renewable power plants (500 kW- 2 MW) will be set up

Role of DISCOMs: DISCOMs will sub-station wise surplus capacity and accordingly applications will be invited. In case, the aggregate capacity offered by Applicants is more than the bidding route will be followed and in such cases, the prefixed levelised tariff will be the ceiling tariff for bidding. In case the farmers are not able to arrange equity required for setting up the plant, they can opt for developing it through the developer or even through local DISCOM.

RE technology: The developer would be free to adopt any renewable energy technology while responding to the bid.

Land requirements: This scheme would be implemented primarily on Barren / uncultivable land. Agricultural land is also permitted under the scheme provided that solar plants are installed in raised structure for installation of Solar panels for ensuring that farming activity is not affected.

Role of MNREMNRE shall allocate an initial capacity of 1,000 MW for Pilot Project to DISCOMs based on their demand and readiness for implementation. MNRE will provide Procurement Based Incentive (PBI) to the DISCOMs @ 40 paise/kWh or Rs.6.60 lakhs/MW/year, whichever is lower. The PBI will be given to the DISCOMs for a period of five years from the Commercial Operation Date of the plant. Therefore, the total PBI that shall be payable to DISCOMs will be Rs. 33 Lakh per MW.

Role of Nodal agenciesState Nodal Agency (SNA) will coordinate with States/UTs, DISCOMs and farmers for implementation of the scheme. They will be eligible to get a service charge of Rs.0.25 Lakh per MW after the commissioning of the projects.

Component B: Installation of 17.50 Lakh Stand-alone Solar Agriculture Pumps 

Indigenous modules, cells, BOS: It will be mandatory to use indigenously manufactured solar panels with indigenous solar cells and modules. Further, the motor-pump-set, controller and balance of the system should also be manufactured indigenously.

Subsidy: CFA of 30% of the benchmark cost or the tender cost, whichever is lower will be provided. The State Government will give a subsidy of 30%, and the remaining 40% will be provided by the farmer. Bank finance may be made available for farmer’s contribution, so that farmer has to initially pay only 10% of the cost and remaining up to 30% of the cost as loan.

Bidding conditions: For component B there will be centralized tendering of solar water pumping system through Central PSUs.

To ensure quality and post-installation services only manufacturers of solar water pumps or controllers or manufacturers of solar panels would be allowed to participate in the bidding process. This condition will create a monopoly of few key manufacturers in the market and a lot of EPC installers will not be able to participate which is needed right now as scale also needs to be achieved right now along with quality.

Commissioning: 12 months from the date of sanction by MNRE

Component C: Solarisation of 10 Lakh Grid Connected Agriculture Pumps

As per the approval, component C is to be implemented on pilot mode for initial 1,00,000 grid-connected agriculture pumps. 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 under net metering.

Bidding: MNRE may specify either a centralized tendering of solarisation system through Central PSUs or by the State Implementation Agencies.

Indigenous modules, cells, BOS: It will be mandatory to use indigenously manufactured solar panels with indigenous solar cells and modules. Further, the motor-pump-set, controller and balance of the system should also be manufactured indigenously.

Subsidy: CFA of 30% of the benchmark cost or the tender cost, whichever is lower will be provided. The State Government will give a subsidy of 30%, and the remaining 40% will be provided by the farmer. Bank finance may be made available for farmer’s contribution, so that farmer has to initially pay only 10% of the cost and remaining up to 30% of the cost as loan.

SNA’s sole: 2% of the eligible CFA will be provided as total service charges to all agencies implementing the scheme including the designated State Implementing Agencies.

Commissioning: 12 months from the date of sanction by MNRE