PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) is usually explained as a scheme for the individual farmer: one farmer, one pump, one khatauni. But the Ministry of New and Renewable Energy (MNRE) guidelines name a much wider applicant list. Farmer Producer Organisations (FPOs), Self Help Groups (SHGs), cooperatives, panchayats, Water User Associations and groups of farmers are all eligible applicants, and for a 500 kW Component A solar plant earning ₹17.5 lakh or more per year, the collective route is often the only realistic one. Smallholders with 1-acre plots cannot host a 2-acre solar plant alone; a 200-member FPO pooling 15 acres can.
This guide covers how group entities actually apply under PM-KUSUM in 2026: which component fits which entity, how pooled and leased land works, the document set a registered FPO needs, how revenue is shared among members, and the honest state of bank financing for collectives. For the full scheme background, start with our PM-KUSUM complete guide.
Direct answer. Yes, FPOs, SHGs, cooperatives, panchayats and Water User Associations can apply under PM-KUSUM. The eligible entity applies in its registered name with its incorporation certificate, a board or member resolution, and title or lease documents for the land. Under Component A, the group builds or leases land for a 500 kW to 2 MW solar plant and earns ₹2.50 to ₹3.50 per kWh under a 25-year DISCOM Power Purchase Agreement; there is no capital subsidy on Component A. Under Component B and C, group applicants draw the same 60% combined subsidy as individual farmers.
Most online guides stop at the eligibility list. What they skip is everything that changes when the applicant is a legal entity instead of a person: whose land counts, who signs, who borrows, and who gets paid. That is what this guide covers.
Can FPOs and SHGs Really Apply Under PM-KUSUM?
Yes. Group eligibility is written into the scheme guidelines, not inferred from them. The PIB PM-KUSUM factsheet states that solar plants up to 2 MW can be set up by “individual farmers, cooperatives, panchayats, Farmer Producer Organisations” on barren or cultivable land. The OREDA Component A FAQ, one of the clearest state documents on the scheme, lists the eligible applicants as “individual farmers, group of farmers, cooperatives, panchayats, Farmer Producer Organisations and Water User Associations.”
Three points in that list matter for group applicants.
First, “group of farmers” is itself a category, so an unregistered collective can apply in some states, though every bank and most DISCOMs will push you to register before money moves. Second, the entity applies in its own legal name. An FPO registered as a producer company applies as the company; a cooperative society applies as the society; a panchayat applies through its executive authority. Third, the land does not have to be owned by the entity. Member-owned land pooled through registered leases, or land leased from third parties, qualifies, provided the lease is long enough to cover the PPA term.
SHGs are the grey zone. They appear in state eligibility lists (Assam’s Component B window, for example, targets small and marginal farmer groups including SHGs), but an SHG under the National Rural Livelihood Mission has no separate legal personality of its own. In practice, an SHG applies through its village or cluster federation, forms a Joint Liability Group with a bank, or promotes an FPO first and applies through it. The sections below treat each entity separately.
PM-KUSUM for Group Entities: The Numbers
Group applications exist because the economics of Component A only work at a scale most individual smallholders cannot reach. Here is the picture in 2026.
The gap between the 10,000 MW target and roughly 720 MW commissioned is the story. Component A has achieved barely 7% of its goal, and research by the Council on Energy, Environment and Water (CEEW, 2026) identifies financing, not land or technology, as the binding constraint. That gap is precisely the opening for collectives: states are under pressure to show Component A capacity, and group applicants who arrive with pooled land and a credible repayment plan are what state agencies are short of.
The revenue math explains the interest. A 500 kW plant generates about 7 lakh kWh per year in central Indian irradiance, worth ₹17.5 lakh to ₹24.5 lakh at discovered tariffs. Landowners who do not want to run the plant can lease to a developer at ₹25,000 to ₹50,000 per acre per year, as our Component A landowner guide details. An FPO that aggregates 15 to 20 acres of member land can therefore offer its members either a rent floor or an equity upside, a choice no single 1-acre farmer gets.
Which Component Fits an FPO, SHG or Cooperative?
The right component depends on what the group owns: land, pumps, or neither. This is the decision table we walk groups through.
| Dimension | Component A (solar plant) | Component B (standalone pump) | Component C (pump solarisation) |
|---|---|---|---|
| What the group needs | 2 to 2.5 acres per 500 kW, near a substation | Farmland without a grid connection | Existing grid-connected pump connections |
| Subsidy | None; PPA revenue instead | 60% (30% central + 30% state) | 60% (30% central + 30% state) |
| Group cash share | Roughly 30% equity + 70% loan | 10% cash + up to 30% bank loan | 10% cash + up to 30% bank loan |
| Income source | Power sale to DISCOM for 25 years | Diesel and grid cost savings | Savings plus surplus power sale |
| Fits which entity | FPO, cooperative, panchayat with pooled land | SHG or JLG with shared irrigation | FPO or Water User Association on a common feeder |
Verdict. For an FPO with pooled land and appetite for a 25-year income asset, Component A is the flagship route and the one banks can size a term loan against. For an SHG of 10 to 20 women farmers sharing a borewell, Component B pumps through a Joint Liability Group are the practical entry, because the 60% subsidy does the heavy lifting and no PPA negotiation is needed. Component C suits cooperatives and Water User Associations whose members sit on one agricultural feeder. Most serious FPOs end up doing A and B in parallel.
The pump-side mechanics for Component B, including the 10% farmer share and empanelled vendor process, are in our KUSUM Component B application guide, and the feeder-level route is covered in the Component C grid-tied pump guide. State windows matter too: Karnataka’s KUSUM process is the most document-flexible for small pumps, while Bihar’s application flow has its own portal and verification sequence.
Not sure which component fits your group? Send us your member count, land records and pump connections, and we map the component mix for you. Get a free group eligibility review →
Component A on Pooled or Leased Land: How It Works
Component A lets the group install a 500 kW to 2 MW grid-connected solar plant on barren, fallow, pasture or marshy land and sell all power to the DISCOM under a 25-year PPA at a tariff discovered through the state’s tender. For a group, the land question has three lawful shapes:
- Entity-owned land. The FPO or cooperative already owns a suitable parcel, for instance land bought with member share capital. The entity applies directly with its own title documents.
- Member-owned pooled land. Members lease their plots to the entity through registered lease deeds, typically 25 to 30 years to cover the PPA term. The entity is the applicant; members earn rent or a revenue share. Where member plots are jointly held within families, the co-owner consent chain from our KUSUM joint land ownership guide applies to every leased parcel.
- Third-party leased land. The group leases from non-member landowners. The OREDA FAQ confirms leased land qualifies if all co-owners lease together and the lease outlasts the plant’s obligations.
The application sequence for a group-run plant:
- Pass a member or board resolution authorising the project, naming the signatory, and approving the land and borrowing plan. DISCOMs and banks both ask for this first.
- Secure the land documents: title deeds or registered leases covering a contiguous parcel within roughly 5 km of the substation.
- Respond to the state tender or apply on the PM-KUSUM national portal as the state window requires, with the entity PAN, registration certificate and resolution.
- Get the Letter of Award and sign the PPA with the DISCOM at the discovered tariff. MNRE has extended PPA signing timelines to 31 March 2027.
- Close financing (equity plus term loan, detailed in the financing section below) and commission the plant within the sanctioned timeline, currently 12 months.
- Report generation online to MNRE and invoice the DISCOM monthly for 25 years.
📘 Regulation note
If the group cannot raise its share of capital, the MNRE guidelines allow the plant to be developed through a Renewable Power Generator (developer) or even the DISCOM itself, with the landholders earning lease rent. Many "FPO projects" on the ground are actually developer plants on FPO-aggregated land. Decide early which model you are really pursuing, because the documents and the money flow differ completely.
The 4-Entity Readiness Test
We run every group applicant through a proprietary screen we call The 4-Entity Readiness Test: four R’s, Registration, Resolution, Record and Repayment. A group that clears all four is treated like any commercial power producer by the DISCOM and the bank. A group missing even one stalls for months.
| R | Question the DISCOM or bank asks | Documents that prove it | Common failure |
|---|---|---|---|
| Registration | Is the entity legally registered and active? | FPO incorporation certificate (producer company or society), cooperative registration, SHG federation proof, PAN, GST where applicable | Dormant society with no audited filings for 3 years |
| Resolution | Do members actually consent? | Board resolution plus general body resolution naming the project, signatory and borrowing limit | Verbal consensus, no recorded minutes |
| Record | Is the land clean, contiguous and committed? | Title deeds or registered 25 to 30 year leases, mutation current, co-owner consents for joint khatas | One member plot with a deceased name on the record |
| Repayment | Can the entity service the loan? | 3 years of audited financials, member share capital, turnover, existing liabilities, PPA cash-flow projection | An SHG with no balance sheet at all |
Score each R as pass, fixable or blocked before spending on surveys or tender fees. “Fixable” usually means 30 to 90 days of paperwork: registering a lease, updating a mutation, restating financials. “Blocked” means structural, such as fragmented non-contiguous plots or a society under liquidation, and the group should switch to the lease-to-developer model instead of self-developing.
💡 Fast tip
SHGs almost always fail the Repayment R because they keep no audited financials. The fix is to route the application through the cluster-level federation, or promote a small FPO with the same members, capitalise it with member shares, and let the FPO borrow. NABARD's 10,000 FPO promotion scheme can fund the FPO formation itself.
Documentation Checklist for Registered FPOs and Cooperatives
The group document bundle replaces the individual farmer’s Aadhaar-khatauni set. Based on the files we prepare for collective applicants, a complete FPO or cooperative Component A bundle contains:
- Incorporation proof: certificate of incorporation (producer company under the Companies Act) or cooperative society registration certificate, plus bye-laws or articles of association.
- Entity identity: PAN of the entity, GST registration where turnover requires it, and the entity’s bank account details.
- Governance proof: board resolution authorising the application, and for larger borrowings a general body resolution with the borrowing limit within the bye-law ceiling.
- Member consent: consent letters or lease deeds from every member whose land is pooled, each with Aadhaar and land record references.
- Land records: title deeds or registered leases for the full contiguous parcel, current mutation entries, and co-owner NOCs wherever a member plot is jointly held.
- Financials: audited balance sheets for 3 years (or since formation), bank statements, and the project report with the 25-year PPA cash flow.
- Signatory KYC: Aadhaar and PAN of the authorised signatory named in the resolution.
- Technical annexures: single line diagram, proposed capacity, substation distance certificate, and vendor quote from an empanelled installer.
For Component B and C group applications, the bundle is lighter: registration proof, resolution, the list of member pump connections or proposed pump sites, and each member’s Aadhaar and land record. Tenant members cultivating land they do not own need the consent route from our KUSUM tenant farmer rules guide.
⚠️ Watch out
A producer company whose annual filings are not current on the MCA portal fails at the first bank check, even if the DISCOM accepts the application. Clear pending annual returns and financial statements before the loan application, not after a sanction is held up.
Revenue Sharing Among Members
The scheme pays one applicant; the group decides the split internally. This is where collective projects either build trust or collapse, and the structure should be written into a registered member agreement before the plant is commissioned, not after the first DISCOM payment arrives.
| Model | How members are paid | Best for | Risk |
|---|---|---|---|
| Fixed lease rent | Land-contributing members get ₹25,000 to ₹50,000 per acre per year; surplus goes to the entity | FPOs with mixed member sizes | Landless members resent the rent gap |
| Share-linked dividend | Surplus distributed in proportion to share capital after loan servicing | Producer companies with strong share base | Dividends are thin in loan years 1 to 8 |
| Hybrid floor plus bonus | Guaranteed rent floor plus a generation-linked bonus in good years | Groups wanting both stability and upside | Needs disciplined accounting |
| Consumption offset | Pump-owning members get free or cheap solar power instead of cash | Component B and C groups | Hard to value fairly across members |
Three rules from the groups we have seen succeed. First, record the sharing formula in a registered agreement and in the bye-laws or a general body resolution, because an unrecorded formula becomes a dispute the day the first ₹20 lakh annual payment lands. Second, ring-fence loan servicing and the maintenance reserve before any distribution; a plant that skips inverter maintenance in year 6 to pay dividends in year 5 dies in year 10. Third, plan for member exit and death: the agreement should state whether a member’s lease and bonus pass to heirs, mirroring the succession logic families face in our joint land ownership guide.
For the landowner-side numbers behind these choices, including rent benchmarks and self-install economics, see the Component A landowner guide. The engineering cross-check on system sizing and subsidy arithmetic is the Qbits Energy KUSUM subsidy explainer.
Bank Financing for Collectives: The Honest Picture
On paper, financing a group KUSUM project is straightforward. Banks treat Component A loans as priority sector agricultural lending, typically funding up to about 70% of project cost against roughly 30% margin, with tenors up to 15 years. In September 2024, Component A was also brought under the Agriculture Infrastructure Fund (AIF), which offers 3% interest subvention on loans up to ₹2 crore for eligible FPOs, SHGs, PACS and cooperatives. Component B and C follow the standard pattern: the group pays 10% and borrows up to 30% of the pump cost.
In practice, collectives face three frictions individuals do not. Bankers at branch level often do not know the scheme; CEEW’s 2026 financing research found lender awareness itself is a barrier. Entity credit history is thin: a 3-year-old FPO has no CIBIL-style track record to underwrite. And DISCOM payment risk gets priced into the loan, raising the effective rate. The publicly cited Telangana cooperative model, a 1 MW plant at about ₹3.8 crore with roughly ₹40 lakh member equity and ₹3.4 crore financed, shows it can be done, but it remains the exception rather than the pattern.
- ✓ Signed PPA or Letter of Award in hand before the loan file
- ✓ 3 years of audited entity financials with real turnover
- ✓ AIF interest subvention stacked on the term loan
- ✓ NABARD or SFAC refinance route named in the proposal
- ✗ Dormant or non-filing entity registration
- ✗ Member land with unrepaired joint-khata defects
- ✗ No general body resolution covering the borrowing limit
- ✗ Project report with no PPA cash-flow sheet
If the term loan does not close after two serious bank attempts, the fallback is not abandonment; it is the developer model. The group aggregates the land, leases it to a Renewable Power Generator, and members take the rent floor while the developer carries the capital risk. Groups lose the upside but keep a 25-year indexed income. The DREBP and PM-KUSUM page covers how Rajasthan’s subsidy stacking changes this financing math for agricultural consumers, and our solar financing options post covers loan-side cost traps that apply to collectives too.
Preparing a bankable group proposal? We build the project report, PPA cash-flow sheet and vendor quote that banks ask for, and we know which branches in Gujarat, Rajasthan and Maharashtra have sanctioned KUSUM collectives before. Talk to our project desk →
Panchayat and Cooperative Routes
Panchayats and cooperatives are the two non-FPO entities named in the guidelines, and each has a distinct route.
Panchayats. A gram panchayat can install a Component A plant on panchayat-owned land, including gauchar (grazing) and other commons where state law permits, and use the PPA income as own-source revenue for the panchayat. The practical constraints are procedural: the decision needs a gram sabha resolution, land-use change on commons needs state revenue department clearance in most states, and panchayats rarely borrow commercially, so the plant is usually executed through a developer with the panchayat as landowner. Pastureland was explicitly added to the eligible land types by the November 2020 MNRE guideline amendment, which is what opened commons land to the scheme.
Cooperatives. Dairy, sugar and credit cooperatives are arguably the strongest group applicants: they have audited financials, member discipline, existing bank relationships, and often rooftops, fallow parcels and captive consumption that a solar plant can serve. A cooperative can run Component A for merchant income, Component C for its members’ pumps on a common feeder, or simply offset its own processing electricity. The cooperative applies as the society with its registration certificate and registrar filings; multi-state cooperatives apply through the state unit where the land sits.
| Factor | FPO route | Panchayat route | Cooperative route |
|---|---|---|---|
| Typical project | 500 kW to 2 MW Component A | Developer plant on commons land | Component A or captive plus Component C |
| Decision body | Board plus general body | Gram sabha | Society board and registrar |
| Borrowing capacity | Moderate, AIF plus PSL | Weak, usually developer-funded | Strong, existing bank lines |
| Best land source | Pooled member leases | Panchayat-owned commons | Society-owned parcels |
Whatever the entity, the plant is a ground-mount asset on rural land, so the structural and evacuation design work is the same as any small solar park. Our ground-mount solar park work covers the engineering side, and Heaven Designs’ ground-mount design service handles layout, structural and interconnection drawings for community-scale plants; their PM-KUSUM engineering explainer is a useful second read on the scheme’s technical requirements.
How Heaven Green Energy Helps
Heaven Green Energy is an MNRE-approved channel partner, and group applications are a growing share of our KUSUM desk across Gujarat, Rajasthan, Maharashtra and Karnataka. The collective route has two extra layers compared to an individual application, entity paperwork and financing structure, and both are where we do the work that generic installers skip.
What we do for FPOs, SHGs, cooperatives and panchayats:
- Readiness screening. We run the 4-Entity Readiness Test on your registration, resolutions, land records and financials, and hand you a one-page fix list before you spend on surveys or tender fees.
- Land aggregation support. Registered lease templates for member-pooled parcels, co-owner consent chains for joint khatas, and contiguity checks against substation distance.
- Bankable project report. PPA cash-flow model, AIF and priority sector loan structuring, and introductions to branches that have actually sanctioned KUSUM collectives.
- Entity structuring advice. When an SHG should federate or promote an FPO first, and when the developer-lease model beats self-developing, stated plainly.
- Turnkey installation and O&M. Empanelled-vendor execution, commissioning paperwork, MNRE online generation reporting, and maintenance through the PPA term.
Explore the services and guides that match your group:
- PM-KUSUM Complete Guide: all three components, subsidy math and the 2026 application flow.
- KUSUM Component A Landowner Guide: lease versus self-install economics for the land side.
- KUSUM Joint Land Ownership: consent chains when member plots are jointly held.
- Ground-Mount Solar Park: our utility and community-scale ground-mount capability.
- Solar EPC: turnkey engineering, procurement and construction for group projects.
- Solar Calculator: estimate plant revenue and payback in 60 seconds.
- Contact Us: free group eligibility review with our KUSUM desk.
One collective, one plant, 25 years of income. Send us your entity registration and land list, and we tell you within 48 hours which component fits and what the bank will ask for. Start your group KUSUM review →
Frequently Asked Questions
Can an SHG apply for PM-KUSUM directly?
An SHG appears in state eligibility lists, but it has no separate legal personality, so in practice it applies through its village or cluster federation, forms a bank-linked Joint Liability Group, or promotes an FPO and applies through it. For Component B pumps, SHG members can also apply individually and share the asset. For a Component A plant, the FPO route is the realistic structure because banks need an entity with audited financials to underwrite the term loan.
Is there any subsidy for an FPO solar plant under Component A?
No capital subsidy applies to Component A. The financial support is the 25-year DISCOM Power Purchase Agreement at a tender-discovered tariff, typically ₹2.50 to ₹3.50 per kWh, plus priority sector bank lending and, since September 2024, 3% interest subvention under the Agriculture Infrastructure Fund for loans up to ₹2 crore. Subsidy of 60% applies only to Component B pumps and Component C solarisation.
Can an FPO apply on leased land, or must it own the land?
Leased land qualifies. The OREDA Component A FAQ confirms that land leased from members or third parties is eligible, provided the lease is registered, all co-owners of each parcel consent, and the lease term covers the plant’s obligations, practically 25 to 30 years. Member-pooled land leased to the FPO is the most common structure in group projects.
How many members does a group need for a 500 kW KUSUM plant?
There is no member minimum in the guidelines; the binding constraint is land. A 500 kW plant needs roughly 2 to 2.5 contiguous acres within about 5 km of a substation. In practice, viable FPO projects we see involve 50 to 300 members, but even a 10-member group with a clean 3-acre parcel can apply. Member count matters mainly for revenue sharing and loan comfort, not eligibility.
Who gets the PPA payments in a group project?
The DISCOM pays only the registered applicant, which is the entity itself: the FPO, cooperative or panchayat. The entity then distributes income to members under its internal revenue-sharing agreement, whether fixed lease rent, share-linked dividends or a hybrid. MNRE and the DISCOM do not govern the internal split, so it must be recorded in a registered member agreement before commissioning.
Can a panchayat install a solar plant on village common land under KUSUM?
Yes, since the November 2020 MNRE amendment added pastureland and marshy land to the eligible land types. The panchayat needs a gram sabha resolution and, in most states, revenue department clearance for land-use change on commons. Because panchayats rarely borrow commercially, the usual structure is a developer-built plant on the panchayat parcel with the panchayat earning lease rent for 25 years.
What documents does a registered FPO need for a KUSUM application?
The core bundle is: certificate of incorporation and articles or bye-laws, entity PAN and bank account, board and general body resolutions authorising the project and borrowing, member consent letters or registered leases with land records, 3 years of audited financials, signatory KYC, and the technical annexures including substation distance. Non-current MCA filings are the most common hidden defect, so clear annual returns before applying.
What happens to the project if a member exits or dies mid-PPA?
The project continues because the contract is with the entity, not the member. What changes is the internal arrangement: a well-drafted member agreement states whether the exiting member’s lease and revenue share transfer to heirs or are bought out by the entity. Groups that skip this clause end up renegotiating under pressure, so write the exit and succession terms before the plant is commissioned.
