Gujarat Commission Approves Solar Buyback At ₹2.83/Unit For Farmers Under PM-KUSUM Scheme

The Gujarat Electricity Regulatory Commission recently delivered a final decision on a petition filed by four power distribution companies—PGVCL, DGVCL, MGVCL, and UGVCL—with GUVNL as the co-petitioner. These companies requested approval to implement the Gujarat government’s policy for solarizing agricultural electricity connections under Component C of the national PM-KUSUM scheme. The Commission accepted the request, allowing the DISCOMs to buy surplus solar energy at ₹2.83 per unit from farmers who install solar systems and also to apply the regular agricultural tariff in case of net energy drawn from the grid.

The scheme’s main aim is to solarize grid-connected agricultural pumps of up to 7.5 HP and promote renewable energy among small and marginal farmers. The Ministry of New and Renewable Energy (MNRE) approved Gujarat’s request in 2020, and the state government issued operational guidelines in 2022. Under this plan, eligible farmers will receive a 30% subsidy from the central government, and another 30% from the state, and must bear 40% of the installation cost. For water user groups or cooperatives with higher loads, calculations are done with a cap to ensure fairness.

The scheme also ensures that surplus solar power generated by farmers can be sold to DISCOMs at ₹2.83 per unit for a 25-year term, providing a long-term income opportunity. However, if a farmer consumes more energy from the grid than generated, they will pay the regular agricultural rate.

Several guidelines have been set to ensure technical viability and fair participation. Only feeders with at least 70% farmer participation are eligible, though exceptions apply to those under the Kisan Suryoday Yojana. Farmers using micro-irrigation systems and those in water-stressed zones also get preference.

The Commission reviewed objections from Gujarat Krushi Vij Grahak Suraksha Sangh, which asked for a higher energy purchase rate of ₹5.00 per unit, reduced contract term, and immediate farmer ownership of the solar systems. They also requested the documents to be provided in Gujarati, simplified processes, and reduced participation threshold. However, the Commission upheld most of the existing conditions, stating they align with national and state policies and ensure the sustainability of the scheme.

The Commission emphasized that the 25-year agreement is justified as it matches the lifespan of the solar system. Ownership will remain with the government for the first five years because of the public investment and maintenance support. Concerns about overlapping benefits from multiple schemes were dismissed as necessary to avoid misuse.

The Commission instructed DISCOMs to create a local grievance redressal mechanism within two months and to provide contract translations in Gujarati for better transparency. With this, the petition was accepted, and the order was finalized on May 23, 2025.