Quick Facts
What PM KUSUM is
PM KUSUM, the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan, is the Government of India’s flagship solar scheme for the agricultural sector. Launched in 2019 and revised in 2020, the scheme targets three distinct rural and agricultural use cases through three components:
Component A: Decentralised solar power plants of 500 kW to 2 MW capacity, set up on barren or fallow farmland. The plant owner sells power to the DISCOM at a feed-in tariff. Designed to convert non-productive farmland into a solar income source.
Component B: Standalone off-grid solar pumps of 0.5 HP to 7.5 HP, replacing diesel-powered pumps. Farmers receive solar pumps to power irrigation independently of the grid.
Component C: Solarisation of existing grid-connected agricultural pumps. The farmer’s pump is supplemented or replaced by solar generation, with surplus power sold to the DISCOM.
The scheme’s stated targets are 30,800 MW of total capacity, including 10,000 MW under Component A, 17.5 lakh standalone pumps under Component B, and 15 lakh grid-connected pump solarisations under Component C.
Component A: decentralised solar plants
Under Component A, farmers or aggregators (cooperatives, FPOs) install solar power plants of 500 kW to 2 MW on barren or fallow farmland. The plant is connected to the nearest 33 kV or 11 kV DISCOM substation through a dedicated feeder.
The plant sells power to the DISCOM at a feed-in tariff determined by the State Electricity Regulatory Commission. Typical tariffs in 2026 range from Rs 2.50 to Rs 3.50 per kWh, depending on the state.
Land ownership remains with the farmer. The farmer either operates the plant directly or leases the land to a developer, earning land lease income plus a share of generation revenue.
Capital cost for a 1 MW Component A project is approximately Rs 4.5 to Rs 5.5 crore. Financing through PSU banks under priority sector lending is available, with concessional interest rates.
For a typical 1 MW project in northern India: annual generation 17,50,000 kWh, FiT Rs 3.20 per kWh, gross revenue Rs 56 lakh, net revenue after O&M and debt service Rs 12 to Rs 18 lakh. Land lease income for the farmer adds Rs 1 to Rs 3 lakh per acre per year, depending on the agreement.
Component B: standalone solar pumps
Component B provides standalone (off-grid) solar pumps to farmers who currently use diesel pumps or have no grid connection. The pump system includes solar panels, controller, motor, pump, and required accessories sized to deliver the farmer’s irrigation needs.
Pump capacities cover 0.5 HP to 7.5 HP for individual farmers, with larger pumps for cooperatives or lift irrigation systems.
Subsidy structure: 30% CFA from central government, 30% subsidy from state government, 40% farmer contribution. Many states subsidise an additional 20% to 30%, reducing farmer share to 10% to 20%.
For a 5 HP solar pump system costing Rs 3.50 lakh:
- Central CFA: Rs 1.05 lakh (30%)
- State subsidy: Rs 1.05 lakh (30%)
- Farmer contribution: Rs 1.40 lakh (40%, before any additional state subsidy)
The pump operates fully on solar, eliminating diesel cost. Annual diesel savings for a 5 HP pump used 200 hours per year is approximately Rs 30,000 to Rs 50,000.
Component C: solarisation of grid-connected pumps
Component C solarises existing grid-connected agricultural pumps. Two sub-models:
Individual pump solarisation: A solar plant sized to the pump’s annual energy is installed at the farm. The farmer uses solar power during the day and grid power during off-hours. Surplus solar is exported to the DISCOM at a FiT.
Feeder-level solarisation: An entire agricultural feeder is solarised through a centralised solar plant. The plant supplies daytime power to all pumps on the feeder. This sub-model is cost-effective for DISCOMs because it reduces their cost of supplying subsidised agricultural electricity.
Subsidy under Component C is structured similar to Component B: 30% central, 30% state, 40% farmer. Some states have additional support.
Farmers benefit through reduced reliance on grid electricity (which is often unreliable for agriculture) and additional income from surplus power exports.
How to apply
Each state has its own application portal and procedure through the State Nodal Agency (SNA). Examples:
Gujarat: GEDA (Gujarat Energy Development Agency) manages applications through suryasakhi.guj.nic.in.
Maharashtra: MEDA (Maharashtra Energy Development Agency) operates muktasahyog.com.
Rajasthan: RREC (Rajasthan Renewable Energy Corporation) handles applications.
Karnataka: KREDL (Karnataka Renewable Energy Development Ltd) operates the state programme.
Andhra Pradesh: NREDCAP (New & Renewable Energy Development Corporation of Andhra Pradesh) administers.
The general process: submit application with farmer ID, land records, pump details, and Aadhaar; SNA verifies eligibility; pump is allotted to a panel of approved suppliers; installation is scheduled; subsidy is disbursed after commissioning.
Timelines vary by state but typically 2 to 6 months from application to installation.
Financing options
State Bank of India, Bank of Baroda, Canara, and Punjab National Bank offer agricultural solar pump loans under priority sector lending. Interest rates of 7% to 9% per annum, EMI tenures of 5 to 10 years.
NABARD provides refinancing support to participating banks.
State-specific schemes such as Gujarat’s Suryashakti Kisan Yojana add further interest subsidy in some cases.
Common mistakes when applying
Applying without verifying land records. Land must be in the farmer’s name or with explicit consent of owner. Mismatches cause rejection.
Mismatching pump capacity to actual irrigation needs. Oversized pumps lead to higher upfront cost without proportionally more output.
Choosing an unapproved supplier. SNAs maintain panel-of-approved vendors; off-panel installations do not qualify for subsidy.
Skipping the feasibility step. Some sites have inadequate solar resource or insufficient water table for the proposed pump.
Not budgeting for the farmer’s share. The 40% farmer contribution can be Rs 1 to 4 lakh, requiring planning or financing.
Forgetting state-specific add-on subsidies. Many states offer additional support that reduces farmer contribution further; failing to apply for these adds cost.
Best practices
Apply through the State Nodal Agency portal from the start.
Verify the pump supplier’s panel status before signing any contract.
Ensure water source capacity matches pump output. A 5 HP pump cannot lift more water than the well can provide.
Combine PM KUSUM with bank financing if the farmer’s share is unaffordable as one payment.
For Component A projects, conduct detailed financial modelling before applying. The viability depends on tariff, financing cost, and land lease structure.
Document all installation details (pump make, panel serial numbers, commissioning certificate) for warranty support.
Standards and compliance
PM KUSUM installations must use BIS-certified solar panels and MNRE-approved pump controllers. The CEA Connectivity Regulations 2019 cover grid-connected components. State SERC net-metering and feed-in tariff regulations apply for the commercial structure under Component C.
Related glossary terms
- PM Surya Ghar Yojana
- DREBP
- MNRE
- State Nodal Agency
- Central Financial Assistance
- Feed-in Tariff
- DISCOM
- GEDA Gujarat
Key takeaways
PM KUSUM is the Government of India’s flagship scheme for solar in agriculture, with three components covering decentralised solar plants on farmland (Component A), standalone solar pumps (Component B), and solarisation of grid-connected agricultural pumps (Component C). The scheme offers 30% central plus 30% state subsidy for solar pumps, plus feed-in tariff revenue for power exported to the DISCOM. Implementation runs through State Nodal Agencies, with the scheme targeting 30,800 MW of total capacity by the mid-2020s.