Revitalising PM-Kusum

Context: PM-KUSUM  can generate hundreds of thousands of jobs, vastly reduce the carbon footprint of Indian agriculture, and result in oil import savings if properly implemented.

Challenges  in implementation of  PM-KUSUM

• Pandemic induced disruption and limited buy-in from states.
• Worsening discom issues:
  • Scheme’s timeline is not aligned with the power purchase planning of discoms.
  • Higher costs and the loss of locational advantage due to waived inter-State transmission system (ISTS) charges.
• Delays in leasing or converting agricultural lands for non-agricultural purposes such as solar power generation.
• Viability challenges: Even after increased subsidies from states, farmers faced issues such as they can not access bank loans without collateral and struggle to pay 30-40% of upfront costs in compliance with PM-KUSUM.
• Adoption of extensively pilot grid-connected solar pumps faced issues such as economic viability, unwillingness on part of farmers to feed in surplus power, and lack of trust between farmers and discoms.
• Limited Awareness among farmers about solar pumps.

Way Forward

• Extension of scheme’s timelines: Extending PM-KUSUM’s timelines beyond 2022 would allow discoms to align the scheme with their power purchase planning.
• Creating a level playing field for distributed solar plants through
  • Counter-party risks and grid-unavailability risks at distribution substations,
  • Standardizing tariff determination to reflect the higher costs of distributed power plants,
  • Doing away with the waiver of ISTS charges for solar plants.
• Reforms in Land Regulation: Streamline land regulation through inter-departmental coordination or the formation of Steering Committee by states.