Centre readies PM-KUSUM 2.0 as focus shifts to feeder-level solarisation

India's agricultural sector, a cornerstone of its economy and food security, has long grappled with the complex interplay of energy demands, financial subsidies, and environmental concerns. The original Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme, launched in February 2019 by the Ministry of New and Renewable Energy (MNRE), was a pioneering step towards addressing these challenges. It aimed to solarize agricultural pumps and enable farmers to sell surplus solar power to the grid, thereby reducing their electricity costs and increasing their income. The scheme had three components: Component A for setting up grid-connected ground-mounted solar power plants (up to 2 MW) in rural areas, Component B for the installation of stand-alone solar-powered agricultural pumps, and Component C for the solarisation of existing grid-connected agricultural pumps. While PM-KUSUM achieved some success, its implementation faced hurdles, including land availability for grid-connected projects, financing issues, and the complexities of individual pump solarisation. This background sets the stage for PM-KUSUM 2.0, which represents a crucial evolution of the scheme, shifting its focus dramatically towards 'feeder-level solarisation.' Instead of solarising individual pumps, this updated approach involves setting up larger solar power plants that are connected directly to agricultural feeders. These feeders, in turn, supply electricity to multiple farmers in a particular area. This strategic shift is designed to overcome many of the limitations of the previous model. By aggregating demand and supply at the feeder level, it allows for economies of scale in project development, easier land acquisition, and more efficient grid management by Distribution Companies (DISCOMs). The solar power generated at the feeder can then reliably supply electricity to all pumps connected to that feeder, significantly reducing the dependence on grid power from conventional sources during peak agricultural demand. Several key stakeholders are central to the success of PM-KUSUM 2.0. Farmers are, of course, the primary beneficiaries, gaining access to reliable, daytime power for irrigation, which can boost agricultural productivity and reduce operational costs. The Ministry of New and Renewable Energy (MNRE) remains the nodal ministry, responsible for policy formulation, scheme guidelines, and overall monitoring. However, state governments and their respective Distribution Companies (DISCOMs) play an even more critical role in PM-KUSUM 2.0. DISCOMs are at the forefront of implementation, as they manage the agricultural feeders, procure the solar power, and are directly impacted by the reduction in power purchase costs and subsidy burdens. Financial institutions, including banks and non-banking financial companies, are vital for providing the necessary capital and credit facilities for project developers and farmers. Private developers will be instrumental in setting up and maintaining the solar power plants, often through Public-Private Partnership (PPP) models. The significance of PM-KUSUM 2.0 for India is multifaceted and profound. Economically, it promises to alleviate the severe financial distress of DISCOMs, which often bear substantial losses due to subsidized agricultural power. By reducing the reliance on costly thermal power and cutting down on power subsidies, the scheme can free up significant state resources. This aligns with broader economic reforms aimed at improving the financial health of the power sector. Environmentally, the shift to solar energy is a major step towards India's ambitious climate goals. India has committed to achieving 500 GW of non-fossil fuel electricity capacity by 2030 and reducing the emissions intensity of its GDP by 45% by 2030, as part of its Nationally Determined Contributions (NDCs) under the Paris Agreement. PM-KUSUM 2.0 directly contributes to these targets by promoting decentralized renewable energy generation. Socially, providing reliable and affordable power to farmers can enhance agricultural output, improve rural livelihoods, and contribute to food security. It also reduces the need for expensive and polluting diesel pumps, thereby improving air quality in rural areas. From a constitutional perspective, the scheme touches upon several important areas. Electricity falls under the Concurrent List (Entry 38 of List III, Seventh Schedule), meaning both the Union and State governments can legislate on it. This necessitates close coordination between the Centre and states for effective implementation. The financial implications, particularly regarding subsidies, often involve the state's budget and sometimes central grants or loans to states (Article 282, 292). The Electricity Act, 2003, forms the legal framework for the power sector, facilitating reforms like unbundling of State Electricity Boards (SEBs), promoting open access, and mandating Renewable Purchase Obligations (RPOs) for DISCOMs, which this scheme helps fulfill. The National Tariff Policy, 2016, further reinforces the push for renewable energy and RPOs. Looking ahead, PM-KUSUM 2.0 has the potential to be a game-changer for India's energy transition and rural development. It embodies a broader theme of decentralized energy solutions, moving away from a sole reliance on large, centralized power plants. This approach enhances grid resilience, reduces transmission and distribution losses, and empowers local communities. Future implications include greater energy security for India, a reduced carbon footprint, and a more sustainable agricultural sector. However, challenges remain, such as ensuring adequate financing, seamless land acquisition, technical integration with existing grid infrastructure, and securing active participation from all DISCOMs. The success of PM-KUSUM 2.0 will pave the way for further innovations in agri-energy convergence, potentially integrating battery storage solutions and even future green hydrogen initiatives at the local level, making India a leader in sustainable rural energy development.