Punjab will purchase solar energy from a Delhi company for at least 50 paise-a-unit more than the Rs 6.5 offer from its own farmers.

Punjab State Power Corporation Limited now will buy the same renewable electricity for Rs 7.03 from Sam Solar and even pay it Rs 3 crore (or 30% of the project cost, whichever is lower) subsidy on every megawatt (Rs 15 crore, thus) it will generate by installing solar panels along irrigation canals. Punjab Energy Development Authority (Peda), the PSPCL, and the company signed two power-purchase agreements to this effect in March.

Subsidy from the central government is also available to the developer. The deal came after Peda halted its project of installing solar panels on farms, for which it had engaged 280 farmers on the basis of reverse bidding. They were to sell renewable energy to the government for between Rs 6.25 and 6.89 per unit and have a capacity to produce 500 megawatts of electricity.

The dream of converting farmers into entrepreneurs as part of the diversification plan involved getting farmers to generate 1-to-2.5 MW power for 25 years based on individual capacity. Peda aborted the move after collecting Rs 14.5 crore from the successful bidders, many of whom had sold off their assets to raise loan for the venture.

Confronted, Peda managing director Amarpal Singh said “it was decided at the government level”. Punjab principal secretary for power Anirudh Tiwari confirmed that the scheme involving farmers was now scrapped. “We cannot compare the two cases, as the Delhi company has been hired for installing solar panels along canals,” he claimed.

Ducking the query on the logic of purchasing the same power for a higher price, he said generating solar power along canals was “innovative”. “This (the power-purchase agreement or PPA with the Delhi company) refers to only 5 MW as experiment, while that (the farmers’ project) was for 500 MW,” he said.

On the subsidy of Rs 3 crore per MW, he said it was under the provision dictated by the central government.

A section of the 280 farmers had moved the Punjab and Haryana high court after Peda had halted the project after the bidding process. Peda, the PSPCL, and the principal secretary for power, as respondents in this case, have received notice to explain why.

On March 28, the state’s counsel submitted in the court that the scheme had not been scrapped and that Peda was not inviting fresh tenders. A day after, on March 29, it signed the PPA with the Delhi company.