PM KUSUM

What Is PM KUSUM?

Status as of October 2026: The PM-KUSUM scheme period ended on 31 March 2026. Per MNRE office memoranda (28 March, 25 May and 28 September 2026), only projects whose PPA or notice to proceed was signed by 31 December 2025 may still be completed, by 31 March 2027, with financial closure for Components A and C due by 30 November 2026 and no extension beyond 31 March 2027. PM-KUSUM 2.0 is in the proposal stage, so there is no open window for new applications. The rest of this entry describes how the scheme worked.

Component A covers decentralised ground-mounted 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, converting non-productive land into a solar income source.

Component B provides standalone off-grid solar pumps of up to 7.5 HP (larger pumps are allowed, but central support is capped at 7.5 HP), replacing diesel-powered pumps. Farmers receive complete pump systems including solar panels, controller, motor, and accessories sized to their irrigation needs.

Component C solarises existing grid-connected agricultural pumps. The farmer’s pump is supplemented or replaced by solar generation, with surplus power sold to the DISCOM at a feed-in tariff.

Under MNRE’s 2024 consolidated guidelines, the targets were about 34,800 MW of solar capacity by March 2026, with central support of ₹34,422 crore: 10,000 MW under Component A, 14 lakh standalone pumps under Component B, and 35 lakh grid-connected pumps (including feeder-level solarisation) under Component C.

In the solar industry, PM KUSUM is among the largest agricultural renewable energy programmes in the world by target capacity. It addresses the triple challenge of farmer income, diesel substitution, and DISCOM financial stress from subsidised agricultural power.

In the Indian context, PM KUSUM is critical because agriculture consumes about a sixth of India’s electricity (roughly 16.5% in 2023-24), much of it heavily subsidised or free. Solarising agricultural pumps reduces DISCOM subsidy burden while giving farmers reliable daytime power and additional income. Heaven Designs’ engineering breakdown of PM KUSUM covers the design and interconnection requirements behind each component in more technical depth.

Why PM KUSUM Matters

PM KUSUM addresses structural problems in India’s agricultural energy ecosystem.

Farmer Income Impact

• Eliminates diesel costs. A 5 HP diesel pump burning roughly 1 to 1.5 litres per hour costs about Rs 90 to Rs 140 per hour of operation at around Rs 90 a litre. Solar pumps eliminate this entirely.
• Additional revenue from surplus power. Component C farmers can sell excess solar generation to DISCOMs at feed-in tariffs, creating a new income stream.
• Land lease income from Component A. Farmers earn a lease rent agreed with the developer, per acre per year or per unit generated (about Rs 50,000 per acre a year in the Kutch example below), by leasing barren land to a Component A solar developer.

DISCOM Financial Impact

• Reduces agricultural subsidy burden. Solarised pumps reduce the volume of free or subsidised power DISCOMs must supply to farmers.
• Defers infrastructure investment. Distributed solar plants reduce the need for new rural transmission and distribution capacity.
• Improves collection efficiency. Solar pump users pay for their systems upfront or through loans, reducing DISCOM receivables.

Environmental Impact

• Diesel displacement: Component B targeted 14 lakh standalone pumps, many replacing diesel pumps, avoiding large volumes of diesel consumption every year.
• Carbon reduction: Solar generation from pumps and plants displaces diesel and coal-based grid power over the project life.
• Groundwater sustainability: Reliable daytime solar pumping enables better water management compared to erratic grid supply that often comes at night.

How PM KUSUM Works

Component A: Decentralised Solar Plants

1. Land identification. Farmers or aggregators (cooperatives, FPOs) identify barren or fallow land suitable for solar installation.
2. Developer selection. The farmer either develops the plant directly or leases land to a solar developer who handles financing, construction, and operation.
3. Grid connection. The plant connects to the nearest 33 kV or 11 kV DISCOM substation through a dedicated feeder.
4. Power sale. The plant sells electricity to the DISCOM at a feed-in tariff determined by the State Electricity Regulatory Commission (typically Rs 2.50 to 3.50/kWh).
5. Revenue distribution. The farmer receives land lease income plus a share of generation revenue if structured as a partnership.

Capital cost for a 1 MW Component A project is approximately Rs 4.5 to 5.5 crore. Financing is available through banks as priority sector lending.

Component B: Standalone Solar Pumps

1. Application. The farmer applies through the State Nodal Agency with land records, existing pump details (if replacing), and Aadhaar.
2. Eligibility verification. The SNA verifies land ownership, water source availability, and pump sizing.
3. Supplier allotment. The pump is allotted from a panel of SNA-approved suppliers.
4. Installation. The supplier installs the complete system: solar panels, controller, motor, pump, and accessories.
5. Commissioning and subsidy release. After inspection, the central and state subsidies are disbursed, and the farmer pays their contribution.

Subsidy structure: 30% central CFA (50% in North-Eastern, hilly and island states) + at least 30% state subsidy, so at least 60% in most states. The farmer’s share of up to 40% can be bank-financed so the farmer pays about 10% upfront, and some states add their own top-up. Farmers replacing an existing diesel pump follow a slightly different documentation path, see how to file a Component B pump-replacement claim. QBits Energy’s overview of the KUSUM agricultural subsidy walks through how the central-plus-state stack compares with other rural solar subsidy routes.

Component C: Solarisation of Grid-Connected Pumps

Individual pump solarisation: A solar plant sized to the pump’s energy needs 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 feed-in tariff.

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. See a worked example of Component C grid-tied pump solarisation for how the export metering is set up. Because the export approval and metering process differs by utility, Heaven Designs’ state-by-state DISCOM net metering process guide is a useful reference before applying.

Subsidy under Component C (individual pump solarisation) follows the same structure as Component B: 30% central (50% in North-Eastern, hilly and island states) + at least 30% state + farmer contribution, on solar capacity of up to twice the pump rating in kW.

Visual Explanation

Real-World Example

Component B: 5 HP Solar Pump, Rajasthan

A farmer in Jodhpur district replaces a diesel pump with a 5 HP solar pump under PM KUSUM Component B.

• System cost: Rs 3,50,000
• Central CFA (30%): Rs 1,05,000
• State subsidy (30%): Rs 1,05,000
• Farmer contribution: Rs 1,40,000
• Additional state top-up (illustrative, 20%): Rs 70,000
• Final farmer payment: Rs 70,000
• Annual diesel savings: Rs 35,000 (about 300 hours of operation)
• Payback: 2.0 years
• 25-year savings: Rs 8.75 lakh (diesel avoided)

Component A: 1 MW Solar Plant, Gujarat

A farmer in Kutch leases 5 acres of barren land for a 1 MW PM KUSUM Component A project.

• Capital cost: Rs 5.0 crore
• Annual generation: 17,50,000 kWh
• Feed-in tariff: Rs 3.20/kWh
• Gross revenue: Rs 56 lakh/year
• O&M + debt service: Rs 38 lakh/year
• Net revenue: Rs 18 lakh/year
• Land lease to farmer: Rs 2.5 lakh/year
• Developer equity IRR: 14 to 16%

Component C: Individual Pump Solarisation, Maharashtra

A farmer in Nashik solarises his existing 3 HP grid-connected pump under Component C.

• Solar plant size: 3.5 kW
• System cost: Rs 2,80,000
• Total subsidy (60%): Rs 1,68,000
• Farmer contribution: Rs 1,12,000
• Annual grid savings: Rs 18,000
• Surplus export revenue: Rs 8,000/year
• Payback: about 4.3 years

Technical Specifications / Benchmarks

Benefits / Advantages

• Massive subsidy support: At least 60% combined central and state subsidy for solar pumps in most states (80% in North-Eastern, hilly and island states).
• Diesel cost elimination: Component B removes diesel dependency entirely for irrigation.
• Additional farmer income: Component A land lease and Component C surplus export create new revenue streams.
• Reliable daytime power: Solar pumps work when the sun shines, exactly when irrigation is needed.
• DISCOM subsidy reduction: Reduces the financial burden of free agricultural electricity.
• Barren land utilisation: Component A converts unproductive land into income-generating solar assets.
• Groundwater management: Reliable daytime pumping enables better water-use planning.
• Carbon emission reduction: Diesel displacement and solar generation avoid millions of tonnes of CO₂.
• Rural employment: Creates jobs in installation, O&M, and manufacturing.
• Energy security: Reduces India’s dependence on imported diesel for agriculture.

Limitations / Drawbacks

• Implementation delays: Many states have fallen behind targets due to administrative and financing bottlenecks.
• Farmer contribution burden: Even with 60% subsidy, the 10 to 40% farmer share can be Rs 50,000 to 2,00,000, significant for smallholders.
• Water source mismatch: Oversized pumps cannot lift more water than the well or borewell can provide, see how to size a solar pump against borewell depth before applying.
• Land record complications: Disputed or unclear land titles cause application rejections.
• Supplier quality variance: Approved supplier panels vary in quality; some installations underperform.
• Grid integration challenges: Component C requires DISCOM cooperation for net metering, which is not always forthcoming.
• Feeder-level complexity: Centralised feeder solarisation requires complex coordination between DISCOM, SNA, and farmers.
• Maintenance awareness: Farmers often lack training on basic solar system maintenance.
• Financing access: Not all farmers have access to bank loans for their contribution share.
• Tariff uncertainty: Feed-in tariffs for Component A and C surplus are subject to SERC revision.

Comparison Section

Applications

• Individual farms: Small and marginal farmers replacing diesel pumps with solar irrigation.
• Cooperative irrigation: Lift irrigation schemes and water user associations using larger solar pump systems.
• Barren land monetisation: Farmers in arid regions earning lease income from Component A solar plants.
• Dairy and horticulture: Solar-powered pumps for cattle watering, drip irrigation, and sprinkler systems.
• Cold storage: Solarised pumps supporting on-farm cold storage and post-harvest processing.
• Fisheries: Solar aeration and water circulation pumps for aquaculture operations.
• Rural drinking water: Solar pumps for community water supply schemes.

Industry Standards & Regulations

PM KUSUM installations must comply with:

• MNRE Comprehensive Guidelines for PM-KUSUM (2024): component definitions, targets, subsidy structure
• State Nodal Agency implementation procedures: application, verification, supplier empanelment
• BIS-certified solar panels: mandatory for all components
• MNRE-approved pump controllers: for Component B and C
• CEA Connectivity Regulations 2019: for grid-connected Components A and C
• State SERC feed-in tariff orders: for power sale to DISCOM
• State SERC net metering regulations: for Component C surplus export
• NABARD refinancing guidelines: for bank loans under priority sector lending
• IEC 61215 / IEC 61730: module certification for Component A and C

India-Specific Context

State-Level Implementation

Each state ran PM KUSUM through its own implementing agencies (State Nodal Agencies, DISCOMs or both):

• Gujarat: GEDA handled Component A; GUVNL and the state DISCOMs handled Components B and C.
• Maharashtra (MEDA, MSEDCL): Active in all three components with significant feeder-level solarisation under Component C, and the largest count of off-grid solar pumps of any state (about 4.8 lakh under MNRE schemes as on 31 March 2026).
• Rajasthan: Large Component A market (implemented through Rajasthan Urja Vikas Nigam) due to abundant barren land and high solar irradiance; Component B ran through the state Horticulture Department.
• Karnataka: Component A through the DISCOMs and Component B through KREDL.
• Andhra Pradesh (NREDCAP): Implemented through the state nodal agency.
• Haryana: One of the largest standalone solar pump (Component B) programmes, with about 1.9 lakh off-grid solar pumps under MNRE schemes as on 31 March 2026.
• Punjab (PEDA): Components A, B and C.

Financing Ecosystem

Under the scheme guidelines, bank finance could cover the farmer’s share so that the farmer paid only about 10% of the cost upfront. Public sector banks, regional rural banks and cooperative banks lend for solar pumps as agricultural term loans under priority sector norms; interest rates, loan limits and tenures vary by bank and state, so confirm them with your branch.

NABARD provides refinancing support to participating banks, reducing their cost of funds and enabling lower farmer interest rates. For a closer look at how one lender structures its solar pump financing, see SBI’s solar loan terms.

Gujarat Leadership

In Gujarat, GEDA implemented Component A, while GUVNL and the state DISCOMs implemented Components B and C. Off-grid solar pump uptake in Gujarat has been modest next to Maharashtra, Haryana and Rajasthan: about 32,000 off-grid solar pumps under MNRE schemes as on 31 March 2026, against about 4.8 lakh in Maharashtra (MNRE Renewable Energy Statistics 2025-26). Heaven Green Energy supports farmers across Gujarat with PM KUSUM application assistance, system design, and installation.

Future Trends

• PM-KUSUM 2.0: With the scheme period over on 31 March 2026, MNRE has said a successor scheme is in the proposal stage. Its components, subsidy levels and timelines are not yet notified.
• Component A scaling: Larger project sizes could improve economies of scale and attract institutional investment, though PM-KUSUM 2.0’s design is not yet notified.
• Battery integration: Future Component B pumps may include small batteries for early morning and evening operation.
• Solar-plus-agrivoltaics: Component A already allows stilt-mounted plants, so farming can continue beneath elevated panels.
• Digital monitoring: IoT-based pump monitoring and remote diagnostics are being integrated into new installations.
• FPO aggregation: Farmer Producer Organisations are being encouraged to aggregate demand for better pricing and faster implementation.
• Green hydrogen linkage: Long-term vision includes using surplus agricultural solar for small-scale green hydrogen production for fertiliser and local use.
• Carbon credit monetisation: PM KUSUM projects may become eligible for carbon credits, adding revenue for farmers and developers.

Common Mistakes & Misconceptions

1. Applying without verifying land records. Land must be in the farmer’s name or with explicit owner consent.

   • Avoid by: Obtaining a current land record extract before applying.

2. Mismatching pump capacity to water source. An oversized pump cannot extract more water than the aquifer provides.

   • Avoid by: Conducting a hydrogeological survey before selecting pump size.

3. Choosing an unapproved supplier. Only SNA-panel suppliers qualify for subsidy.

   • Avoid by: Verifying supplier panel status on the SNA portal before signing.

4. Skipping the feasibility step. Some sites have inadequate solar resource or insufficient water table.

   • Avoid by: Allowing the SNA or vendor to conduct a proper site assessment.

5. Not budgeting for the farmer’s share. The 10 to 40% contribution can be Rs 50,000 to 2,00,000.

   • Avoid by: Exploring bank loan options under priority sector lending before applying.

6. Forgetting state-specific add-on subsidies. Many states offer additional support that reduces farmer contribution further.

   • Avoid by: Checking your state’s SNA website for current subsidy stacks.

7. Neglecting maintenance. Solar pumps need periodic panel cleaning and controller checks.

   • Avoid by: Signing an AMC or training family members on basic maintenance.

8. Assuming Component A is passive income. Land lease agreements vary; some require active involvement.

   • Avoid by: Reading the lease agreement carefully and understanding revenue-sharing terms.

9. Ignoring grid integration requirements for Component C. Net metering approval is essential for surplus export.

   • Avoid by: Working with an experienced EPC that handles DISCOM coordination.

10. Expecting instant subsidy disbursement. Subsidy release follows commissioning and inspection, which takes time.

    • Avoid by: Budgeting for the full farmer contribution upfront and treating subsidy as a reimbursement.

Key Takeaways

• PM KUSUM is India’s flagship solar scheme for agriculture with three components: decentralised plants (A), standalone pumps (B), and pump solarisation (C).
• The scheme period ended on 31 March 2026; only projects signed by 31 Dec 2025 can still be completed (by 31 March 2027), and PM-KUSUM 2.0 is in the proposal stage.
• Under the 2024 guidelines the scheme targeted about 34,800 MW, including 10,000 MW of ground-mount solar, 14 lakh standalone pumps and 35 lakh grid-connected pumps.
• Component B offered at least 60% combined subsidy in most states (30% central + at least 30% state), with 50% central in North-Eastern, hilly and island states.
• Component A converts barren land into income-generating solar assets through feed-in tariff arrangements with DISCOMs.
• Component C reduces grid dependency and diesel use while enabling surplus power sales.
• Applications ran through state implementing agencies with varying timelines (2 to 6 months for pumps, 6 to 12 months for plants); new applications await PM-KUSUM 2.0.
• Bank finance of the farmer’s share (priority sector lending) brings the upfront payment down to about 10% of the cost.
• Always verify land records, supplier panel status, and water source capacity before applying.
• Heaven Green Energy provides end-to-end PM KUSUM support in Gujarat from application to commissioning.
• The scheme is a cornerstone of India’s strategy to reduce agricultural diesel use and DISCOM subsidy burden.

Related Glossary Terms

Related Resources

• DREBP & PM-KUSUM Services
• Ground Mount Solar Park
• Solar Calculator, Estimate Your Savings
• PM KUSUM Complete Guide
• Diesel vs Solar Pump ROI
• Solar for Textile Industry
• Complete Guide to Solar Installation in Gujarat
• Solar Payback Period
• How to Choose a Solar Contractor
• OPEX vs CAPEX Solar

Sources & References

• MNRE Comprehensive Guidelines for Implementation of PM-KUSUM (2024)
• MNRE Office Memoranda on PM-KUSUM, 28 March, 25 May and 28 September 2026 (pmkusum.mnre.gov.in)
• MNRE Renewable Energy Statistics 2025-26 (off-grid solar pumps as on 31 March 2026)
• CERC Report on Short-term Power Market in India 2023-24 (sector-wise consumption)
• MNRE PM KUSUM Component-wise Implementation Circulars
• GEDA PM KUSUM Implementation Guidelines
• MEDA Maharashtra PM KUSUM Guidelines
• RREC Rajasthan PM KUSUM Guidelines
• KREDL Karnataka PM KUSUM Guidelines
• NREDCAP Andhra Pradesh PM KUSUM Guidelines
• GERC / MERC / RERC / KERC Feed-in Tariff Orders
• Electricity Act 2003, Section 42 (Open Access)
• NABARD Refinancing Guidelines for Solar Pumps
• CEA Connectivity Regulations 2019