The 15-month-old Siddaramaiah regime has come up with a scheme for the agriculture sector, which if goes according to the script, might turn farmers net sellers of solar power to the grid.
The government is geared up to roll out what it calls the solar farmer scheme. With the help of subsidies or on his own, a farmer can switch to solar-powered irrigation pump (IP) sets. He can use as much electricity as he needs and sell the surplus to the grid.
If the farmer has invested on his own, he will get a tariff of Rs 9.56 per unit. If he has taken subsidies, he will get a tariff of Rs 7.20 per unit. The energy department is targeting the farm sector because it accounts for an estimated 38-40% of the total power consumed in Karnataka. There are an estimated 2.5 million IP sets in use, and they run on free electricity. The power subsidy to the farm sector has grown at an average rate of 18% since 2007, and the government has budgeted Rs 6,700 crore for this fiscal year.
“The biggest complaint of farmers is that they get part of the regular power supply at night. If they switch to solar power, they can not only get the power during day time, but can also can earn some income by selling the surplus,” energy minister DK Shivakumar told ET.
The Karnataka Renewable Energy Development Limited (KREDL), the agency under the energy department, has plans to replace 2500 IP sets in five districts with solar-powered pump set systems of 5 HP-capacity this year. Since most farmers can’t afford a solar pump system as it requires an investment of Rs 1.25 lakh per kilo-watt (KW) capacity, the government is working on plans to rope in the private sector.
According to GV Balaram, managing director of KREDL, a farmer running a 5 KW solar photo-voltaic panel and selling one third of the power generated can earn about Rs 23,900 a year as one KW panel can generate an average of 4.5-5 units a day. The Union Ministry of New and Renewable Energy (MNRE) provides subsidy for IP sets only up to 5 HP, and Karnataka has written to MNRE urging it to increase it to 10 HP.
There are, of course, concerns within the government about the power purchase costs shooting up if a good chunk of farmers switch to the scheme.
The average cost of power purchase in Karnataka is Rs 4.30 per unit from non-hydel channels while the average cost of solar power purchase is in the range of Rs 6.93 and Rs 8.40 a unit.
Power utilities are required to see 10% of the energy that they buy is sourced from non-conven tional sources, and there are concerns in the finance department that breaching this cap might increase purchase costs.
According to Balaram, the state electricity regulator has fixed the solar power purchase obligation at 0.25% for 2014-15 and the same will reach 3% by 2021 under national solar mission guidelines.
“We have to scale up our solar capacity to at least 2000 MW from the current levels of under 50 MW, and add 0.25 % each year to reach these levels. The financial burden from increased purchase costs of solar power will in any case be passed on to consumers by the regulator,” he said.