PM-KUSUM Component A Landowner Guide: Lease or Build

If you own four or more acres of barren, fallow or cultivable wasteland sitting within five kilometres of a DISCOM substation, PM-KUSUM Component A turns that land into a 25-year income stream of ₹60,000 to ₹1,00,000 per acre per year: without you spending a single rupee on panels. Component A is the segment of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) scheme that allows individual landowners, Farmer Producer Organisations (FPOs), cooperatives and panchayats to set up 0.5 MW to 2 MW grid-connected ground-mount solar plants, then sell electricity to the local DISCOM through a 25-year Power Purchase Agreement (PPA). The DISCOM buys the power at a pre-fixed levelised tariff (or a lower bid tariff where a substation is oversubscribed) and is obliged to buy the entire output within the contracted capacity.

Scheme status, October 2026. PM-KUSUM’s sanctioned period ran to 31 March 2026. MNRE has set 30 November 2026 as the last date for financial closure under Components A and C, and 31 March 2027 as the completion deadline, only for projects whose PPA was signed on or before 31 December 2025, with no extension beyond that (MNRE office memoranda of 28 March, 25 May and 28 September 2026, on the PM-KUSUM national portal). A landowner without a signed PPA today is effectively waiting for PM-KUSUM 2.0, which MNRE described in March 2026 as at the proposal stage. The lease and ownership logic below still applies to projects already in the pipeline and to any successor scheme.

This guide is for the landowner, not the developer. We cover the four ways a landowner can actually participate, the cost and ROI math for self-installation versus leasing, the DISCOM PPA mechanics that decide your monthly cheque, and the application pitfalls that delay projects by 6 to 18 months across Rajasthan, Maharashtra and Gujarat.

Direct answer. PM-KUSUM Component A allows landowners to deploy 0.5 MW–2 MW solar plants on barren or fallow land within 5 km of a DISCOM substation. Self-installation costs ₹3.5 to 4 crore per MW with 10 to 12 year payback. Leasing the land to a developer pays ₹60,000–₹1,00,000 per acre per year for 25 years with zero capital outlay. Tariffs are pre-fixed by the DISCOM under the state regulator, for example ₹3.13/kWh in Telangana; competitive bidding applies only where applications exceed a substation’s notified capacity.

If you’ve been holding agricultural land that hasn’t grown a reliable crop in three or more years and the DISCOM 33/11 kV substation is visible from your fields, you’re sitting on the highest-yield solar-income asset class in rural India. The rest of this guide will tell you exactly how to convert it.

What KUSUM Component A Allows You to Do as a Landowner

PM-KUSUM Component A is one of three components under the umbrella PM-KUSUM scheme administered by the Ministry of New and Renewable Energy (MNRE). Component B funds standalone solar pumps for off-grid farmers. Component C solarises existing grid-connected agricultural feeders and pumps. Component A, the part this guide is about, funds the deployment of decentralised grid-connected solar plants of 0.5 MW to 2 MW capacity on barren, fallow, pasture, marshy or cultivable wasteland owned by individual farmers, groups of farmers, panchayats, cooperatives and FPOs.

The crucial distinction from rooftop schemes like PM Suryaghar is that Component A is not a capital subsidy programme. The central government does not write you a cheque for a percentage of the project cost. Instead, your state’s DISCOM signs a 25-year Power Purchase Agreement at a pre-fixed levelised tariff, or at a lower bid tariff where more capacity is offered at a substation than it can take. MNRE pays the DISCOM a performance-based incentive (₹0.40 per unit or ₹6.6 lakh per MW, whichever is less, for five years), not the landowner. The economic value flows to the landowner via two channels: the annual lease rent if you let a developer build the plant, or the per-unit power sale revenue if you build the plant yourself.

The implementing agencies vary by state. In Rajasthan, MNRE’s sanction records name Rajasthan Urja Vikas Nigam Ltd (RUVNL), working with Rajasthan’s discoms. In Gujarat the Gujarat Energy Development Agency (GEDA) runs the tender and PPA process via geda.gujarat.gov.in. In Punjab it’s PEDA working alongside PSPCL, with bidding rounds announced through the Punjab KUSUM application portal. Maharashtra runs Component A through MSEDCL via the Maharashtra DISCOM portal. The substantive scheme structure is identical across states, only the pre-fixed tariff, the bidding rules and the document set vary. The national scheme portal is pmkusum.mnre.gov.in.

A Component A plant generates roughly 15 to 16 lakh units (kWh) per MW per year in north and west India, with Rajasthan and Gujarat at the top end of that range and Punjab and Maharashtra slightly below. At a PPA tariff of ₹3.10/kWh, the 2025 average across discovered auctions, that’s revenue of approximately ₹46–₹50 lakh per MW per year. Operating costs (O&M, insurance, panel cleaning, security) run ₹4–₹5 lakh per MW per year, leaving net cashflow of ₹41–₹46 lakh per MW per year for a self-installer or developer. The lease rent paid to a passive landowner is calibrated against this number, typically 12 to 15% of gross revenue, which is how the ₹60,000–₹1,00,000 per acre range emerges in the market.

Land Eligibility Criteria: Size, Type, Location, Connectivity

The single biggest reason Component A applications fail is land that doesn’t actually qualify. MNRE and state nodal agencies (SNAs) screen four parameters in sequence, fail any one and the application is rejected at the technical scrutiny stage before the auction round even opens.

Land size. The minimum project size is 500 kW (0.5 MW), which requires roughly 2 to 2.5 acres. The maximum is 2 MW, requiring 8 to 10 acres. Most Component A bids are placed at the 1 MW level, which uses 4 to 5 acres including row spacing for tilt-angle shading, internal roads, inverter pads and the substation pad. Plots smaller than 2 contiguous acres are not viable, you cannot stitch together fragmented holdings unless they sit next to each other and share a single revenue khasra arrangement.

Land type. MNRE’s Component A provides for ground-mounted or stilt-mounted plants on the farmer’s land: barren, fallow or uncultivable land for ground-mounted plants, and cultivated land where the panels are raised on stilts so farming continues underneath. Taking fertile irrigated farmland fully out of cultivation rarely makes sense, because the opportunity cost is far higher than the lease rent, and state agencies may set their own land-use conditions. The classification on your land record (7/12 extract in Maharashtra, jamabandi in Punjab/Rajasthan/Haryana, RTC in Karnataka, ROR in Gujarat) is what the SNA reads, not what the land currently looks like on the ground.

Location and substation proximity. The plant must inject power into the local DISCOM grid at a 33/11 kV or 66/11 kV substation that has spare evacuation capacity. MNRE’s guidelines say the plant should preferably be within a 5 km radius of the substation, to avoid costly sub-transmission lines and losses. Farther away, the developer must fund longer lines, which erodes project economics and leaves little headroom to pay the landowner. Some states (Maharashtra, Karnataka) have published shortlists of substations open for Component A capacity addition; ask the SNA for the current substation eligibility list before you submit anything.

Title and connectivity. The land must have clear, undisputed title in the applicant’s name. Joint ownership (multiple siblings on the patta) requires registered consent from all co-owners. If the plot is under a formal tenancy arrangement rather than owner-cultivated, see our separate guide on KUSUM rules for tenant farmers before applying. The plot must have all-weather road access for installation trucks and O&M vans. Power evacuation needs right-of-way for the 33 kV line from the plant boundary to the substation, if intervening landowners refuse passage, the project stalls indefinitely.

If your land meets all eight criteria, you have a viable Component A asset. If even one fails, typically substation distance or land classification, fix it before applying, not after.

The 4-Path Component A Landowner Decision Tree

This is the framework we use whenever a landowner approaches us with land that’s qualified. The 4-Path Component A Landowner Decision Tree maps your decision to four distinct ownership and operating models, each with different capital requirements, risk profiles, returns and timelines. Pick the path before you talk to anyone about tariffs, tenders or EPC contracts, the path decides everything else.

Path 1: Own + Self-Install (Active operator)

You apply for Component A capacity in your own name through your state’s SNA or DISCOM portal, receive a Letter of Award (at the pre-fixed tariff, or after bidding where the substation is oversubscribed), raise the project finance (typically 70% debt from a public-sector or rural lender against the signed PPA, 30% equity from your own capital), engage an EPC contractor to build the plant on your land, and then operate it for 25 years. You collect 100% of the PPA revenue. You also carry 100% of the construction, performance and O&M risk. Equity payback is typically 6 to 8 years, simple project payback 10 to 12 years, and 25-year project IRR runs 14 to 18% in well-located states.

Path 2: Own Land + Lease to a Solar Developer (Passive landowner)

You retain ownership of the land. A solar developer, usually a renewable IPP (Independent Power Producer) or an EPC company that won a Component A bid for capacity in your district, leases the plot from you on a 25-year registered lease deed. The developer pays you an annual lease rent of ₹60,000–₹1,00,000 per acre with a built-in escalation clause (usually 5% every 2 years or 10% every 3 years). The developer raises all the capital, signs the PPA in their name, and operates the plant. You have zero capital exposure and zero performance risk. This is the path the vast majority of small landowners take.

Path 3: Lease Land to an FPO or Cooperative

If you’re part of a Farmer Producer Organisation or an agricultural cooperative, the FPO itself can be the Component A applicant. Multiple member-farmers contribute land, the FPO raises pooled equity and concessional NABARD loan, and the FPO operates the plant. Revenue is distributed to land-contributing members according to a pre-agreed formula, typically a fixed lease component plus a share of net profit. This path captures more of the upside than passive leasing while spreading the operational burden across the cooperative. It works well in Maharashtra’s sugar belt and Gujarat’s Saurashtra region where FPOs are mature.

Path 4: Joint Venture with an EPC or IPP

A middle path, you contribute the land at a notional valuation, the developer contributes the capital and operational expertise, and the two of you co-own the project SPV (Special Purpose Vehicle) at an agreed equity split (typical splits are 15 to 25% to the landowner, 75 to 85% to the developer). You collect dividends in proportion to your equity stake plus a separate land-use rent. JV gives you a bigger share of upside than a pure lease, with less risk than self-installation, but it requires careful legal drafting to protect minority rights and a longer negotiation window.

Most landowners with under 10 acres should choose Path 2. Path 1 is rational only above 20 acres where the project capacity justifies the financing overhead. Paths 3 and 4 require institutional partners and a 6 to 12 month longer setup, but they retain more of the long-term value.

Path 1: Self-Install, Cost, ROI, and Risk

Self-installation is the highest-return path on paper and the most operationally demanding in practice. Before you commit, run the cost stack honestly. A 1 MW DC-side Component A plant in 2026 costs ₹3.5 to 4 crore turnkey, with the variance driven by module choice (mono-PERC vs TOPCon vs bifacial), ground-mount structure design (fixed-tilt vs single-axis tracker), land development needs and the local cost of last-mile transmission.

Project financing is typically 70:30. Public-sector banks (SBI, PNB) and rural lenders (NABARD-refinance schemes) lend against the assignment of the signed PPA, the lender is paid directly by the DISCOM, your cashflow is residual. Interest rates in 2026 run 9.5 to 10.5% on 12 to 15 year tenors. Equity of ~₹1.05–₹1.20 crore per MW is what you need in your own bank account before signing the EPC contract.

Revenue at a ₹3.10/kWh tariff with 16 lakh kWh/year generation is ₹49.6 lakh per MW per year. Annual debt service on a ₹2.5 crore loan at 10% over 12 years is roughly ₹35 lakh per MW. O&M, insurance, security and panel cleaning add ₹4–₹5 lakh. That leaves net cashflow to the landowner-operator of ₹9–₹11 lakh per MW per year during the debt-service window, rising to ₹40+ lakh per MW per year from year 13 once the loan is fully retired. Project IRR over 25 years lands at 14 to 18% depending on tariff and irradiance, with equity IRR closer to 18 to 22%.

The risks are concrete. MNRE’s guidelines require commissioning within 15 months of the Letter of Award; delays of up to six months lead the DISCOM to encash your ₹1 lakh per MW performance bank guarantee on a per-day basis, and beyond six months the PPA capacity is cut to whatever has been commissioned. Module underperformance reduces revenue with no offsetting tariff increase, the PPA is fixed for 25 years with no escalation. Inverter failure in year 8 to 10 (typical inverter life) is a ₹35–₹45 lakh refresh that you fund from cashflow. Insurance, security against panel theft (a real issue in remote sites), and a dedicated O&M contract are not optional. If you don’t have either the capital base or the operational team to absorb these risks, the lease path is materially safer.

Path 2: Lease to Solar Developer, Tariffs and Tenure

Leasing is what 80%+ of small-to-medium Component A landowners actually do. Weigh it against self-installation using our broader land lease vs. purchase comparison before you sign anything. You sign a 25-year registered lease with a developer or IPP, hand over operational control of the plot, and receive an annual rent cheque for the full 25 years. The lease deed is registered at the sub-registrar’s office for an enforceable claim against the developer’s project assets and PPA receivables, never sign an unregistered lease.

The 2026 market rate is ₹60,000–₹1,00,000 per acre per year, with the bottom of the range in low-irradiance, far-from-substation zones (parts of Punjab, eastern Maharashtra) and the top in high-irradiance, well-connected zones (western Rajasthan within 3 km of a substation, Saurashtra near Banaskantha-cluster substations). A 5-acre plot generating a 1 MW project at ₹80,000/acre/year yields ₹4 lakh annually, paid in two or four instalments depending on the lease deed.

A well-drafted Component A lease includes the following provisions: a 5% escalation every 2 years (or 10% every 3 years) to offset inflation, a security deposit equivalent to 12 months’ rent, a bank guarantee from the developer for the first 3 years’ rent, automatic transfer of plant ownership to the landowner if the developer defaults on rent for more than 6 months, a clean-decommissioning clause requiring the developer to remove panels and restore the land at end of PPA, and an unconditional right for the landowner to mortgage or sell the underlying land (subject to the lease running with the title).

These are our indicative market bands, not published figures; check the tariff your state regulator has fixed for Component A (Telangana’s, for example, is ₹3.13/kWh for 25 years).

Free Component A site assessment. Send us your khasra number, plot size and nearest 33/11 kV substation, and our team will tell you within 48 hours whether your land qualifies, which path fits, and what lease rent the market will support. Get your free quote →

Path 3: FPO / Cooperative Joint Model

The FPO and cooperative route is built into the original PM-KUSUM scheme design specifically to let small and marginal farmers, who individually own one or two acres, pool their land into a viable Component A project. NABARD and the state cooperative banks provide concessional finance, the FPO becomes the legal applicant, and revenue is distributed back to land-contributing members through an agreed sharing formula.

The mechanics are straightforward. An FPO (typically already registered under the Companies Act, 2013 section 8 or as a cooperative society) identifies a cluster of member-farmers whose contiguous plots add up to 4 to 10 acres adjacent to an eligible substation. Each farmer signs a 25-year lease with the FPO at an agreed land rent. The FPO applies for Component A capacity in its own name, wins the reverse auction, raises NABARD-backed term finance (typically 75% debt at 8 to 9% on a 12 to 15 year tenor, sharper than commercial lender terms), engages an EPC contractor, and operates the plant.

Revenue distribution typically runs in three layers. Layer 1 is the fixed land rent to each land-contributing farmer, ₹60,000–₹80,000 per acre per year, paid regardless of plant performance. Layer 2 is the operating margin retained by the FPO to service debt, fund O&M, build reserves and pay member dividends. Layer 3 is the terminal value: after debt is fully retired in year 12 to 15, the residual 10 to 13 years of PPA revenue is almost pure profit, distributed as enhanced dividends. A farmer contributing 1 acre to a 1 MW FPO project can expect total 25-year receipts of ₹35–₹50 lakh (rent plus dividend), versus ₹20–₹25 lakh from a pure passive lease to an external developer.

This model has worked well in Maharashtra’s sugar cooperative belt around Kolhapur, Sangli and Solapur; in Gujarat’s Saurashtra (Banaskantha, Mehsana) where dairy cooperatives have moved into solar; and in Tamil Nadu’s western districts. The constraints are real: the FPO needs at least 2 to 3 years of trading history before NABARD will fund a Component A project, a competent CFO or board treasurer, and the discipline to manage a 25-year asset across changing member rosters.

If you’re a farmer in a region with a functioning FPO, ask the FPO board whether they’ve evaluated Component A. If you’re an FPO board member, note that under MNRE’s current timelines only projects with a PPA signed by 31 December 2025 can still be completed, so new FPO projects depend on PM-KUSUM 2.0; use the time to line up land, title and finance. Combine Component A with the developing DREBP scheme for distributed renewable energy for further capital support in states that have notified DREBP.

DISCOM PPA Terms and Tariff Mechanics

The PPA, the Power Purchase Agreement signed between the project developer (or self-installer, or FPO) and the DISCOM, is the load-bearing legal document of any Component A project. Read it carefully before signing anything else. The standard template is published by the state Electricity Regulatory Commission and follows the MNRE model.

Tenure. 25 years from the Commercial Operation Date (COD). Any extension beyond 25 years is by mutual agreement between the generator and the DISCOM, and the generator may keep operating after the PPA if land arrangements allow.

Tariff structure. Single-part fixed energy tariff in ₹/kWh, flat for the entire 25-year tenure with no escalation. This is the most important and most commonly misunderstood term. Inflation will erode the real value of your tariff over 25 years; the levelised tariff prices this in upfront. The PPA does not include any capacity charge, deemed generation payment or take-or-pay floor, you only get paid for actual units injected.

Tariff discovery. The DISCOM pre-fixes a levelised tariff, determined by the state regulator, and awards capacity at that tariff on a first-come basis where applications do not exceed a substation’s notified capacity. Where they do, a closed bid or reverse auction is held with the pre-fixed tariff as the ceiling, and the lowest bidders win. In a bid, your final tariff is whatever you quote: bid too low and you’re stuck for 25 years; bid the ceiling and you may not win.

Payment terms. DISCOM pays monthly against your meter reading and a tax invoice. Payment is contractually due within 30 to 45 days; in practice some DISCOMs run 60 to 120 days late. Late-payment surcharge is payable at the rate set in your PPA (Telangana’s, for example, is 1.25% per month after 30 days). The Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 also tightened DISCOM payment discipline nationally. PPAs must also be backed by an escrow or letter-of-credit payment security arrangement.

Connectivity and evacuation. The PPA defines who builds the 33 kV line from the project boundary to the substation. In most Component A states, the DISCOM builds and owns the last-mile evacuation up to a defined interconnection point, with the developer responsible for the in-plant pooling station. Confirm the boundary point in the PPA before signing, disputes over the last 200 metres of cable are common and expensive.

Curtailment. The DISCOM has a contractual right to curtail (refuse to lift) solar generation during grid emergencies. Read how your PPA treats curtailment and whether any compensation applies, because terms differ by state. Track curtailment events month-by-month, it’s the most common quiet revenue loss in operating Component A plants.

For a deeper look at evacuation design and pooling stations, see our ground-mount solar park infrastructure guide.

Common Pitfalls in Component A Applications

Across the Component A applications we’ve supported through Rajasthan, Gujarat, Maharashtra and Punjab, the same mistakes appear in roughly 7 out of 10 first-time submissions. Each one is preventable with a pre-submission audit.

1. 1
   Wrong land classification on revenue records. Land that's been fallow for years but still classified as "irrigated" or "double crop" in the 7/12 or jamabandi gets rejected. File for reclassification with the tehsildar's office before applying, it takes 60 to 90 days but is non-negotiable.
2. 2
   Misjudging substation distance. MNRE's 5 km guidance is a radius from the substation, not a Google Maps driving route, but the real cost is the cable route. Plots that look close on a map can need 7 to 8 km of line because of canal or railway crossings, which eats into the economics.
3. 3
   Co-owner consent missing or unnotarised. Joint family land with three siblings on the patta needs notarised consent from all three. Lawyers sometimes draft simple consent letters that the SNA's legal cell rejects. Always go through a registered sub-registrar attestation.
4. 4
   Encumbrance certificate gaps. The SNA wants a clean EC for the last 13 years. Old mortgages from kisan credit card loans, even if repaid, must be released via a registered satisfaction entry. A "released in records" statement from the bank is not enough.
5. 5
   Bidding below your own cost. The reverse auction tempts bidders to chase the lowest tariff to win capacity. Many small-capacity bidders bid ₹2.50–₹2.70/kWh in 2024 rounds and are now locked into 25-year contracts that won't service their debt. Run your project DPR before you bid, if the project doesn't IRR at the tariff you're about to quote, walk away from the auction.
6. 6
   Right-of-way for the evacuation line not pre-cleared. If your plot sits behind two neighbouring fields and the 33 kV line must cross them, secure written easement consent before bidding. Post-bid right-of-way disputes have stalled multiple Component A projects in Rajasthan and Maharashtra for 12 to 18 months.
7. 7
   Signing the lease before the developer wins capacity. Some developers ask landowners to sign exclusivity leases pre-bid, then walk away if they don't win the auction, leaving the landowner unable to engage another bidder. Always make the lease conditional on PPA execution, with an automatic termination clause if the developer doesn't win capacity within 12 months.

Self-Install vs Lease, The Honest Comparison

Verdict. If you own under 10 acres and don’t have ₹1 crore+ in liquid equity, lease to a reputable developer or join an FPO model. The risk-adjusted return is materially better than self-installation at small scale. If you own 20+ acres of well-located land and have the capital base plus a competent project advisor, self-install: the 25-year IRR is among the best risk-adjusted yields available to a rural Indian landowner. The middle ground (10 to 20 acres, partial capital) is where the JV path makes sense.

How Heaven Green Energy Helps Landowners with Component A

Heaven Green Energy is MNRE-empanelled across multiple Component A states and has supported landowners through the full lifecycle, pre-application land audit, SNA documentation, EPC build for self-installers, and developer matchmaking for the leasing route. Our team handles the parts of the process that confuse most first-time landowners.

• Land qualification audit. Send us your khasra, the 7/12 or jamabandi, and the nearest substation, and we’ll tell you within 48 hours whether the plot is Component A-eligible and what tariff/lease band the market will support.
• Path recommendation. We run the numbers for all four paths against your specific land, capital position and risk appetite, no upselling, just the honest answer.
• EPC delivery for self-installers. Turnkey 0.5 to 2 MW Component A plants with Tier-1 ALMM-listed modules, BIS-certified inverters, 25-year performance support, and PPA-aligned commissioning timelines.
• Developer matchmaking for lessors. We connect landowners to IPPs and developers who have already won Component A capacity in your DISCOM territory, eliminating the speculative “we’ll bid for capacity later” agents.
• Lease deed drafting support. Our legal partners draft registered 25-year lease deeds with escalation, security deposit and decommissioning clauses pre-built.

Explore the services that match your project:

• PM-KUSUM complete guide: Components A, B and C explained end-to-end.
• KUSUM Rajasthan guide: RRECL-specific process and substation eligibility.
• KUSUM Gujarat GEDA guide: GEDA tender mechanics and tariff bands.
• KUSUM Punjab application: PEDA / PSPCL portal walkthrough.
• DREBP + PM-KUSUM stack: how the Distributed Renewable Energy Buyout Programme layers on top of Component A in select states.
• Ground-mount solar park engineering: civil, evacuation and pooling station design.
• Solar calculator: quick ROI estimate for self-install scenarios.

When you’re ready, contact our Component A desk with your khasra number and substation name, we’ll come back inside 48 hours with the next move.

Frequently Asked Questions

How much can I earn per acre per year by leasing my land under KUSUM Component A?

In the 2026 market, Component A landowner lease rents range from ₹60,000 to ₹1,00,000 per acre per year, paid annually or semi-annually for the full 25-year PPA tenure. The exact figure depends on substation proximity (closer is higher), state irradiance (Rajasthan and Gujarat top the range), local developer competition, and the escalation clause negotiated. Most lease deeds include a 5% bi-annual or 10% triennial escalation, which roughly tracks rural inflation.

What land qualifies for PM-KUSUM Component A?

The land must be classified as barren, fallow, cultivable wasteland, pasture or marshy land in revenue records (7/12 extract, jamabandi, RTC or ROR), have clear undisputed title in the applicant’s name, preferably sit within a 5 km radius of a notified DISCOM substation, have all-weather road access, and be contiguous 2 to 10 acres for a 0.5 to 2 MW project. Cultivated land can be used with stilt-mounted panels so farming continues underneath.

How much does a 1 MW Component A solar plant cost to install in 2026?

A turnkey 1 MW grid-connected Component A plant costs ₹3.5 to 4 crore in 2026, including modules, inverters, mounting structure, civil works, internal cabling, 33 kV evacuation infrastructure up to the interconnection point, SCADA monitoring, EPC margin and interest during construction. Land cost is separate. Typical financing is 70% debt, 30% equity, with equity of ₹1.05–₹1.20 crore per MW funded by the landowner-operator or project SPV.

Is there any central government subsidy for Component A like there is for PM Suryaghar?

No. Unlike PM Suryaghar (rooftop) or KUSUM Components B and C (off-grid and on-grid pumps), Component A is a pure Power Purchase Agreement model, there is no central financial assistance for capital cost. The economic value flows to the landowner through the 25-year PPA revenue (self-install) or annual lease rent (lease to developer). Some states layer DREBP or state-specific capital incentives on top; check with the state nodal agency.

What is the typical PPA tariff for a Component A solar plant?

The tariff is pre-fixed by each DISCOM under its state regulator, for example ₹3.13 per kWh in Telangana, and our indicative market band is roughly ₹2.80–₹3.40 per kWh. It is fixed flat for the entire 25-year PPA tenure with no escalation clause. Where applications exceed a substation’s capacity, bidders quote against the pre-fixed tariff as a ceiling and the lowest bids win.

Can a group of small farmers pool land for one Component A project?

Yes, through the FPO or cooperative route. A registered Farmer Producer Organisation or cooperative society can apply for Component A capacity in its own name and pool contiguous plots from multiple member-farmers. NABARD-refinanced concessional loans are available specifically for this structure. Member-farmers receive both a fixed land rent and a profit-share dividend, typically yielding 30 to 50% more lifetime income than a pure passive lease to an external developer.

What happens to the land after the 25-year PPA ends?

The standard Component A lease deed includes a decommissioning clause requiring the developer to remove panels, structures, cables and the pooling station at end of PPA, restore the land to its original agricultural classification, and hand it back to the landowner. Some developers offer to renew the lease at then-current market rates if the PPA is extended; some hand back debt-free panels and structures for the landowner to operate independently. Negotiate the end-of-tenure clause carefully during lease drafting.

How long does a Component A application take from submission to first revenue?

Plan for 12 to 18 months end-to-end once a scheme window is open (under current MNRE timelines, new windows depend on PM-KUSUM 2.0). Under MNRE’s guidelines, the Letter of Award comes within a month of application where no bidding is needed, the PPA must be signed within two months of the award, and the plant must be commissioned within 15 months of the award. EPC construction itself is 6 to 9 months. Net meter connection and commissioning is 30 to 45 days. Your first PPA invoice is raised the month after Commercial Operation Date, with payment typically arriving 60 to 90 days later. The fastest end-to-end timelines we’ve supported are 11 months; slow projects run beyond 24 months due to right-of-way disputes.

Can I mortgage my land while a Component A lease is running?

Yes, the underlying land title remains yours and is mortgageable. The lease deed runs with the title, meaning any buyer or mortgagee takes the land subject to the developer’s lease rights. Banks lending against such land will discount the loan-to-value ratio to reflect the 25-year encumbrance, but the lease rent stream itself is often pledgeable as additional security. Confirm with your bank before signing any mortgage commitment.