The Punjab Government has scrapped the scheme to turn farmers into solar power producers and then buy the power generated by them.

Officially, the government maintains that the decision to scrap the scheme has been taken because of economic considerations, with the Centre reducing the tariff at which solar power is to be bought from private producers.

However, sources say the Department of Renewable Energy developed cold feet, fearing the scheme could have adverse political repercussions.

Minister for Renewable Energy Bikram Majithia said the rates for supplying solar power to the Punjab State Power Corporation Limited (PSPCL) by the farmers were too high.

“The farmers had quoted rates ranging from Rs 6.22 to Rs 6.99 per unit, which worked out to be Rs 6.70 per unit. The private solar companies are offering power at an average price of Rs 5.70. Obviously, the PSPCL could not have bought power at Re 1 per unit higher,” he said.

Sources said the power corporation would have ended up paying Rs 90 crore per annum additional charges for buying power from these small power producers.

Since the scheme provided for solar power to be bought from farmers for 25 years, the government would have spent Rs 2,250 crore extra vis-a-vis buyingpower from private solar power companies.

Government functionaries felt this could also be used against them and that it had the potential of turning into a scam.

Source: April 26, 2016, The Tribune