The Indian farmer will effectively bear only 10 per cent of cost for solarising his agricultural pump under a scheme unveiled in the Budget 2018-19, Power Minister R.K. Singh said.
In a post-budget media briefing here, Singh, also the New and Renewable Energy Minister, referred to the Rs 1.44 lakh crore scheme for solarising pumps of all farmers proposed by Finance Minster Arun Jaitley on Thursday while presenting his last full budget before the 2019 general elections.
"The Kusum (Kisan Urja Suraksha evam Utthaan Mahabhiyan) scheme was announced in the Union Budget. The scheme provides for 17.5 lakh off grid solar pumps to begin with," he said.
"Ultimately we propose to solarise every agricultural pump and apart from this, we will be connecting all the grid connected pumps with solar power.
"The farmer will have to bear just 10 per cent of the cost of the panel. The farmer will get assistance in the form of a 30 per cent capital subsidy from the Centre, another 30 per cent will come from the state and the balance 30 per cent will be financed," he added.
The government will spend Rs 48,000 crore over 10 years as central financial assistance (CFA) on the Kusum scheme which aims to encourage the use of barren land for setting up solar power plants.
A similar amount will have to be given by the states and the financing institutions towards Kusum, which is to be put up to the cabinet for approval, Singh said.
He said that the solar panels to be provided will have twice the capacity of a grid one, and so if the capacity of a grid connected pump is 5 horse power, the solar panel will generate twice that. "This way the balance power can be sold to the grid," he added.
The scheme will have four components, including setting up 10,000 MW solar plants on barren lands and incentivising discoms to buy the electricity produced, distributing 17.5 lakh solar pumps, solarising exisiting pumps of 7,250 MW and government tube wells of 8,250 MW capacity.
In his budget speech, Jaitley said the Centre would take necessary measures "and encourage state governments to put in place a mechanism that their surplus solar power is purchased by the distribution companies or licencees at reasonably remunerative rates."
The sector welcomed the budget initiatives to boost the development of clean energy.
"We welcome the government's focus on expanding coverage of the Ujjwala (LPG to poor women) and Saubhagya (rural household electrification) scheme," Feedback Energy Distribution Company MD Devtosh Chaturvedi said in a statement.
"The announcements regarding strengthening state distribution companies by enabling them to buy surplus solar-powered generated by consumers is noteworthy."
Fortum India MD Sanjay Aggarwal said: "The budget has some important announcements with respect to the solar power industry. The first is to buy surplus solar power generated by farmers in solar parks.
"In addition, the government has streamlined the capital allocation towards creating solar parks and associated infrastructure for the sector."
Shell India Chairman Nitin Prasad said: "We would continue to encourage a continuation of the positive reform measures introduced last year in the energy space especially in the space of the open infrastructure access for all players and in the power value chain for cleaner sources of energy."
However, according to Indian Energy Storage Alliance Executive (IESA) Director Rahul Walawalkar, increased custom duty on electronic items in the budget "is a matter of concern".
"IESA's priority is right now on increasing domestic demand where the upfront cost is definitely a concern as number of products the domestic manufacturing is not available," he said in a statement here.
"Detailed studies are in progress to see the implications pertaining to storage sector although the budget didn't mention additional customs duties. Increase in customs duty will create hurdle in market adaption," he added.