MNRE Clarifies its Subsidy Allocation Plan for KUSUM Solar Pump Program

The states can provide higher subsidy to ease the burden of the farmers, the notice said

September 11, 2020


The Ministry of New and Renewable Energy (MNRE) has issued new clarifications for the Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM-KUSUM) program. According to the clarifications, for Component B and Component C of the program, the state share of subsidy will be a minimum of 30% of the applicable benchmark cost or the cost discovered in auctions, whichever is lower.

The states can provide a higher share of subsidy to reduce the beneficiary farmer’s contribution. However, the central finance assistance (CFA) would be limited to 30% of the benchmark cost set by the ministry or the price discovered through tender, whichever is lower, for pump capacity up to 7.5 HP.

The notice further added that there is an option available for the farmers to install a universal pump controller (USPC) under the component B of the program, for which the farmer will have to bear the additional cost. No CFA will be provided for the extra cost of the controller, but the states can pay the additional cost to help the farmers in installation.

Also, the ministry added that under component C of the program, there is no CFA for the replacement of less efficient grid-connected agriculture pumps with energy-efficient agriculture pumps. However, the states can provide the necessary financial help to farmers to replace the existing pumps with the energy-efficient pumps.

Several state implementing agencies had sought clarifications for the execution of the program.

The MNRE launched the guidelines for the implementation of the PM-KUSUM program in July last year with the following components:

  • Component A: Set up 10 GW of decentralized ground-mounted grid-connected solar projects of individual project size of up to 2 MW
  • Component B: Install 1.75 million standalone solar-powered agriculture pumps of individual capacity up to 7.5 HP
  • Component C: Solarize 1 million grid-connected agriculture pumps of individual capacity up to 7.5 HP

A few days ago, the Central Electronics Limited invited bids for 1,707 grid-connected solar pumps under the KUSUM program’s component C.

Back in July, MNRE released amendments to the guidelines for the implementation of Component C of the PM-KUSUM program.


Image credit: JREDA