Kusum: Bumpy Ride for India’s Solar Pump Scheme

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Kusum: Bumpy Ride for India’s Solar Pump Scheme

By IWMI Flickr Photos is licensed under CC BY-NC 2.0

There are over 20 million grid-connected agriculture water pumps in India consuming more than 17% of the total annual electricity. Touted as the silver bullet to uplift the agriculture sector and push the distributed-solar market, Kusum scheme faces several hurdles and implementation issues.

21 September 2021 – by Ankush Kumar

The Indian government launched its mega solar pump scheme, popularly known as PM Kusum, in 2019. The scheme aims to improve farmers’ income by installing grid-connected solar pumps up to 2 MW and transform existing diesel pumps into solar. While the larger goal was to develop decentralized solar energy systems, it also focuses on reducing power transmission and distribution losses. The scheme focuses on addressing many issues from rural development to renewable energy transition. However, Kusum has not been able to match the desired timelines. Experts are now raising questions about its sluggish progress.

Energy Transition in Agriculture through Solar Pumps

According to the data from Kusum’s guideline published in July 2019, India is home to 30 million agriculture pumps. Out of this, around 10 million runs with diesel. As the power companies could not electrify these diesel pumps, the government’s solar pump scheme planned to replace them with solar water pumps. Government data counts over 20 million grid-connected agricultural water pumps. They consume more than 17% of the total annual electricity of the country. Powering these pumps with solar energy will reduce the dependence on the already stressed power distribution companies.

Scope of Kusum Solar Pump Scheme

As per the country’s new and renewable energy ministry, the scheme aims to achieve a solar capacity of 30.8 GW by 2022. The central government promises financial support of about INR350 million (USD4.7 million). The solar pump scheme scheme has three main components: the setup of 10,000 MW decentralized grid-connected renewable energy power plants. The second step foresees the installation of two million stand-alone solar agriculture pumps with an individual capacity of up to 7.5 Horsepower. Lastly, the scheme aims at solarising 1.5 million grid-connected agriculture pumps.

Kusum aims at benefitting India’s 3.5 million farmers. They can sell the surplus power generated from these solar pumps directly to the power distribution companies. It also enables the farmers to utilize their barren land by installing a solar plant which improves their livelihoods.

solar capacity chart
Source: MNRE

Financial Assistance to Adopt Solar Energy

Under Kusum, the central government provides 30% financial assistance for the stand-alone solar pump. A subsidy of 30% comes from the state government. The farmer must bear the remaining 40%. The solar pump scheme also states the provision of bank finance up to 30% as a loan. This puts the burden of only 10% of the cost that the farmer must pay. In some states, the central government’s financial assistance is up to 50% on the stand-alone solar pumps.

Lack of Progress in Kusum

On the one hand, experts consider Kusum one of the most transformational schemes in the renewable energy sector. On the other hand, it has not met the expectations and is way behind its intended target. The Institute for Energy Economics and Financial Analysis (IEEFA) raises such doubts in a new report released in June 2021. Accordingly, out of the planned 2 million off-grid solar-powered irrigation pumps, only one-eighth is running. “At the end of the financial year 2019-20, a total of around 246,000 solar pumps were deployed. And only 8,900 of these were installed in the 12 months after the scheme was launched in 2019,” states the report.

chart per year of india's solar pump scheme

Roadblocks in Expansion

To meet India’s agricultural demand, farmers in India can get electricity at a subsidized rate. IEEFA in 2018 estimated that Kusum can save the Indian government subsidy up to USD7.6 billion. However, IEEFA, in its report, also highlights major roadblocks in the solar pump scheme leading to delayed expansion. It pinpoints the lack of coordination among the implementation agencies and the government departments. It also underlines the challenges related to farmers in getting bank finance, ambiguity in opting for suitable business models and other technological issues.

Depleting Groundwater and Over-extraction

The other major shortcoming of this solar pump scheme is its long-term impact on the groundwater. In its report, a Delhi-based NGO Center for Science and Environment (CSE) highlights that large-scale distribution of pumps could result in excessive water withdrawal. This can hurt the already depleting water tables.

“Widespread deployment of solar pumps in water-scarce regions could create more problems than they solve unless over-extraction of groundwater is prevented,” it states. The NGO recommends a redesign of the scheme. It should focus on water and agriculture also, and not merely on renewable energy.

chart of solar pump installations over the years

In one of the Lok Sabha (Parliament House) sessions on 25 March 2021, India’s RK Singh, the renewable energy and power minister, shared his views on using solar pumps in water-scarce regions. These areas are ‘dark zones’ in the PM-Kusum Scheme. Singh stated that the Central Ground Water Board (CGWB) from time to time notifies the areas for control and regulation of groundwater.  “Only existing pumps can be solarised in the ‘dark zones’,” he informed. “So far, no existing grid-connected pumps are reported solarised under the solar pump scheme in ‘dark zones.”

New and Renewable Energy Outlook for India

According to the minister, until 28 February 2021, a total of 24,688 stand-alone solar pumps were running. Also, solar systems now equip 64 grid-connected agriculture pumps. The Indian government has set a target to achieve 450 Gw of renewable energy capacity by 2030. As of July 2021, the country has achieved 98.88 Gw of renewable energy installed capacity, excluding energy generation from large hydro projects.

image of india's solar pump scheme

by Ankush Kumar

Ankush Kumar is a Berlin-based freelance journalist who writes on energy transition, human rights, and enterprise technologies. He was formerly associated with India’s largest media conglomerate The Times Group, covering power utilities, coal, and renewable energy. Kumar was part of the Clean Energy Wire media study tour in 2018 to cover Germany’s coal phase-out.

As a journalist, Kumar was also involved in a cross-border story on lead-acid poisoning caused by battery recycling. The story won the prestigious “Ernst-Schneider-Preis” of the German Chamber of Commerce and Trade as well as the “Deutscher Journalistenpreis – djp” of The Early Editors Club in 2019. On April 22nd, 2021, at the Second Annual Fetisov Journalism Awards his co-authored story won the 2nd prize in the category of “Contribution to Civil Rights.” Over the years he has written articles for The Caravan, Financial Express, The Economic Times, Der Spiegel, Frankfurter Rundschau, and other reputed publications.

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