New Delhi, Apr 14 (PTI) Weak grid infrastructure, financial barriers for small developers, land access and low tariff rates are among the key hurdles that have slowed the progress of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), India’s flagship programme to promote solar energy in agriculture, according to a new analysis.
While the scheme aimed to install 34.8 GW of solar capacity by March 2026 — the end of its first phase — only 14 GW has so far come online.
PM-KUSUM is a significant initiative as it aims to provide energy and water security to farmers, enhance their income, de-dieselise the farm sector and reduce environmental pollution.
The gaps were raised in “Scaling Solar Power for Irrigation in India: Lessons from PM-KUSUM”, an analysis published on April 8.
It was carried out by the Council on Energy, Environment and Water (CEEW), the Centre for Study of Science, Technology and Policy (CSTEP) and the International Institute for Sustainable Development (IISD).
Talking to PTI, Anas Rahman, senior policy advisor at the IISD, said, “While most states were able to tackle the issue of low tariff rates in recent years, grid infrastructure and land availability still remain a challenge. These need to be tackled as the scheme’s second phase is rolled out.” Rahman noted that the target solar capacity should be met in the following months, as many projects are in the pipeline.
In an office memorandum issued on March 28, the Ministry of New and Renewable Energy said, “For the completion of the PM KUSUM projects where PPAs (Power Purchase Agreements)/NTPs (Notices to Proceed) are signed/issued on or before 31.12.2025 only, it is decided to provide the extension of timelines till 31.03.2027.” The ministry also requested the states “to coordinate with banks to facilitate loans and financial closure of the projects, beyond 31.03.2026, as the current scheme is proposed to be subsumed under PM KUSUM 2.0”.
Components of PM-KUSUM The scheme was launched in 2019 and had three components. Under Component A, farmers can install solar power plants (between 0.5 MW and 2 MW capacity) on their land, connect them to the grid and sell the power for additional income. There is no government subsidy in this component — farmers bear the entire investment.
Component B involves installing off-grid solar irrigation pumps, meaning a small solar panel at a field powers an irrigation pump that is not connected to the grid. The component aims to replace costly diesel pumps, which also pollute the environment. The off-grid solar irrigation pumps are provided at subsidised costs, shared between the Centre and the respective state governments.
Component C has two parts. The C-IPS (Individual Pump Solarisation), where a small solar plant is set up in each field, similar to rooftop solar, and allows farmers to use the power and sell the excess to the DISCOMs (electricity distribution companies).
The C-FLS (Feeder-Level Solarisation) involves installing a larger solar plant near an electric substation from where power is supplied to all the farmers connected to it through a feeder line.
“The C-FLS was added later in the scheme. That is because the C-IPS did not get much traction as under it, farmers are required to contribute at least 10 per cent of the plant’s cost, which many were unwilling to do. The C-FLS allowed DISCOMs to invest in the solar plant. While this means that farmers cannot sell power back for income, they receive daytime power without having to invest,” said Rahman.
The challenges The report focussed on two components of the scheme, Component A and C-FLS, which could only meet just 8.4 per cent and 38.2 per cent of their targets respectively. Compared to these two components, Component B fared much better and added 7.54 GW of solar power.
According to a release issued by the Press Information Bureau in December last year, as of October 2025, more than nine lakh standalone pumps were installed under Component B.
“Under Component C, a total of 10,535 grid-connected solar pumps have been solarised, and 9,74,458 Feeder-Level Solarisation (FLS) pumps have been completed,” the release said.
In the initial years, PM-KUSUM’s progress was largely slowed by the fact that developers did not bid for tenders for installing solar power plants under Component A and C-FLS.
“It happened because state governments set maximum tariffs (price paid for solar electricity) based on large solar parks (around Rs 3), which was not feasible for smaller, distributed plants with higher logistical costs. Tenders saw no takers for years until states allowed competitive bidding without fixed caps,” Rahman said.
Another issue has been finding suitable land for installing solar plants, especially under the C-FLS component.
For instance, developers could not find affordable land near substations, which are typically in agriculturally-intensive areas where land is expensive.
For a solar power plant to be profitable, it needs to be within a five-kilometre range of a substation, making the cost of setting up the electric lines low and ensuring less transmission losses.
Also, it was difficult for developers to find farmers who were willing to lease their land for the installation of solar plants.
Under the scheme, many were new entrants and small developers, and could not finance the solar power plants.
“As DISCOMs are financially weak, banks were hesitant to lend to developers for fear that they would not be paid,” Rahman said.
Weak rural distribution grids also posed an issue, as they suffered from chronic undervoltage during the irrigation season and overvoltage with reverse power flow during off-season.
This led to frequent solar-plant shutdowns and power-generation loss for developers.
Rahman noted that with PM-KUSUM entering the next phase, there is a need to resolve these issues to make solar irrigation financially sustainable for both utilities and farmers. PTI ALC RC
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