Capital Subsidy Scheme for Solar Pumps
Due to lack of grid-connected electricity in many parts of the country, a large number of diesel pump sets are being used for the purpose of irrigation. The operating cost of diesel pump sets is increasing day by day. The Solar Photovoltaic Water Pumping Systems can easily meet the irrigation requirements of land holdings for small and marginal farmers. These systems would help farmers to avoid travelling long distances for procuring and transporting diesel as also increasing the cropping intensity. Hence, Govt. of India has launched a programme for promoting solar pumping systems in the country for the purpose of irrigation.
The scheme involves provision of loans by Commercial Banks, RRBs, State and District Central Cooperative Banks, SCARDBs and NABARD (under direct lending) for installation of Solar PV Pumping systems for the purpose of irrigation and capital subsidy will be provided for the same.
Technical Specifications and maximum Admissible Subsidy
A SPV water pumping system consists of PV array, a DC/AC surface mounted/submersible/floating motor pump set, electronics, if any, interconnect cables and an ‘on-off’ switch. PV array is mounted on a suitable structure with provision of tracking. Electronics could include Maximum Power Point Tracker (MPPT), Inverter and Control/Protections.
The complete SPV water pumping system will have to qualify the specifications laid down by MNRE from time to time that is notified on MNRE website. Solar pumping system upto 10 HP are eligible for subsidy under the scheme.
Only manufacturers/entrepreneurs empanelled by MNRE, GoI can participate in the scheme. The empanelled manufacturer/entrepreneur will raise the invoices for the supplied products. The invoices generated by their dealers will not be eligible for subsidy. Further, the manufacturer has to give an undertaking (in the prescribed format) with the invoice that systems offered meet the technical standards / requirements specified by MNRE, GoI. MNRE will undertake revision in the rate/quantum of subsidy from time to time based on the feedback received from NABARD, banks and manufacturers.
Location of the unit & Assistance Pattern
The installation of the Solar Photovoltaic Water Pumping Systems is for the purpose of irrigation. The units can be located in rural or urban areas. The pattern of assistance will be in the form of capital subsidy at rates indicated in Annexure-III. Additional assistance for the same project from State Governments in the form of capital subsidy, interest subvention etc. is allowed.
Margin & Security
Banks have to ensure that beneficiary contributes a minimum margin of 20% of the Total Financial Outlay (TFO). If the margin is less than 20% of the TFO, the project will not be eligible for assistance under the scheme. The Total Financial Outlay(TFO) is inclusive of installation, commissioning, transportation, insurance, 5 year operation and maintenance charges and taxes wherever applicable. Banks may follow RBI guidelines in regard of security. Banks should ensure that the units are insured. The insurance premium may also be included in the TFO.
Eligibility Criteria – Who Can Apply?
Under the scheme, projects financed by all Commercial Banks, RRBs, State and District Central Cooperative Banks, SCARDBs as also NABARD (under direct lending) will be eligible to receive subsidy. Individuals, group of individuals, SHGs, JLGs, NGOs, Farmers’ Clubs and Farmers Producers Organisation will be eligible for subsidy. However, Private/Public Limited Companies/ Corporates are not eligible.
The eligible borrowers shall apply to the banks for sanction of loan for the project. The bank shall appraise the project as per the norms and if found eligible, sanction the loan excluding the margin, subject to technical feasibility and financial viability. Based on the field visit and after satisfactory installation of the unit, the bank shall arrange to make payment directly to the supplier.
There would be a minimum lock in period of 3 years and hence, if the loan is repaid before three years, the borrower will not be eligible for subsidy. Repayment period will be for 10 years.
Need more information about this scheme or if you want to install solar water pumping system please visit your nearest PSRM Distributor or contact our customer care executive.