PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha Evam Uttham Mahabhiyan) 2019

Policy Update
Anamitra Sinha

Background

The PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha Evam Uttham Mahabhiyan) scheme is a pivotal program launched in 2019 by the Ministry of New and Renewable Energy (MNRE), aiming to establish a large-scale, farmer-driven renewable energy infrastructure across India. The scheme not only envisions transforming barren or unproductive farmland into renewable power sources but also aims to augment farmers’ incomes, promote sustainable agriculture, and reduce dependence on traditional grid power. Originally targeting a 2022 completion, the ambitious goal of deploying 30,000 MW of solar capacity in rural India has been extended to March 2026. This extension underscores both the transformative potential and the practical challenges of deploying decentralized solar power across India’s diverse rural landscapes.

The PM-KUSUM scheme originated from a pressing need to address India’s energy requirements in agriculture, a sector heavily reliant on electricity for irrigation. India’s agriculture sector has historically relied on either heavily subsidized grid power or diesel-based pumps, both of which have significant economic and environmental downsides. Agricultural power subsidies alone have burdened state governments with over ₹1 lakh crore annually, prompting an urgent need for alternatives. Diesel pumps, meanwhile, are both costly and contribute significantly to greenhouse gas emissions. PM-KUSUM’s rollout is designed to tackle these issues by empowering farmers to generate and potentially sell solar energy back to the grid, providing a dual benefit of revenue generation and reliable daytime irrigation.

Solar energy was identified as the most feasible renewable resource, given India’s high solar insolation and the decreasing cost of photovoltaic technology. As part of India’s commitment to the Paris Agreement and its national goal of achieving 500 GW of renewable energy by 2030, PM-KUSUM also holds a crucial place in the country’s long-term sustainability roadmap. However, the program has faced challenges—such as financing hurdles, installation logistics, and regulatory issues—which delayed its initial targets and necessitated the 2026 deadline extension.

Functioning

The scheme is structured around three components designed to maximize reach and impact:

Component A involves setting up 10,000 MW of decentralized ground-mounted solar plants on arid or unproductive farmland. Farmers can install individual plants up to 2 MW, with a portion of generated power being sold to the grid. This arrangement not only helps offset grid demand but also monetizes land that may otherwise yield no agricultural income.
Component B targets areas lacking grid connectivity by installing 2 million standalone solar-powered agriculture pumps. These pumps provide a reliable irrigation solution in remote regions and minimize diesel dependency.
Component C focuses on solarizing 1.5 million grid-connected pumps, allowing farmers to meet their irrigation needs through solar power while feeding any excess energy back into the grid.

The scheme promotes a “decentralized” approach to solar generation, making rural India an active participant in India’s renewable energy revolution rather than simply a beneficiary of centrally generated power.

Recent Progress

Since its inception, PM-KUSUM has made significant strides, particularly with Components A and B, though uptake has varied across states due to differences in land availability, grid infrastructure, and state-specific policies. By 2023, over 5,000 MW of capacity under Component A had been approved across states like Rajasthan, Gujarat, and Maharashtra, where land is relatively more available. For Component B, more than one million solar pumps have been installed in off-grid areas, especially benefiting states with limited electricity infrastructure, such as Bihar and Jharkhand. Despite these successes, financial and logistical hurdles persist, particularly concerning land acquisition and project financing, which has slowed progress in some regions.

Financing remains a complex challenge as solar pump installations can cost upwards of ₹1 lakh per unit, even with central and state subsidies covering a significant portion. Farmers often need additional funding, typically through loans, to cover the remaining costs, which has slowed adoption. According to recent MNRE reports, the scheme has mobilized close to ₹40,000 crore in investments from state governments and private entities, but more streamlined financing solutions are still needed.

Impact

The anticipated impact of PM-KUSUM goes far beyond irrigation. By giving farmers access to solar energy generation, the scheme is effectively providing a new income stream. Farmers are expected to be able to earn around ₹40,000 to ₹50,000 per year per acre of land used for solar generation, contributing to a notable increase in rural incomes. This is especially impactful for farmers in drought-prone or arid areas where traditional agriculture is less viable.

Environmental benefits are equally profound. Diesel-powered pumps in agriculture contribute an estimated 13 million tonnes of CO₂ emissions annually; solarizing these systems under PM-KUSUM could slash emissions by as much as 32 million tonnes of CO₂ per year upon full implementation. Additionally, PM-KUSUM’s decentralized solar model alleviates strain on the grid, allowing states to reduce the costly energy subsidies currently allocated to rural electricity consumption.

The scheme also supports groundwater conservation by making farmers more judicious in their water usage. By using solar pumps that can generate income from surplus energy, farmers have a direct financial incentive to use water efficiently, potentially curbing the over-extraction of groundwater.

Way Forward

While the 2026 extension is a promising step, PM-KUSUM faces ongoing challenges in terms of financing, administrative delays, and infrastructural limitations. Land acquisition remains a particular hurdle, especially in densely populated states where land prices are high, and government agencies are actively working to streamline these processes. Another issue is the high upfront cost of solar pumps, which can be prohibitive even with subsidies. In response, the government is exploring ways to expand financial inclusion, allowing farmers easier access to loans and reducing the down payments required for installation.

To overcome these obstacles, greater collaboration with the private sector is also underway, as private players bring expertise in both technology and financing models, which can help lower costs and improve efficiency. States are increasingly playing an active role in local implementation, with Maharashtra, Rajasthan, and Madhya Pradesh leading in pilot projects and funding support. These partnerships are essential to scaling PM-KUSUM across diverse regional contexts and aligning with local needs.

References

Drishti IAS. (n.d.). PM-KUSUM. Retrieved October 30, 2024, from https://www.drishtiias.com/daily-updates/daily-news-analysis/pm-kusum-4
Ministry of New and Renewable Energy. (n.d.). PM-KUSUM. Government of India. Retrieved October 30, 2024, from https://pmkusum.mnre.gov.in/#/landing
Ministry of New and Renewable Energy. (n.d.). Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM). Government of India. Retrieved October 30, 2024, from https://mnre.gov.in/pradhan-mantri-kisan-urja-suraksha-evam-utthaan-mahabhiyaan-pm-kusum/
Press Information Bureau. (2024, October 5). Progress under PM-KUSUM scheme. Government of India. Retrieved October 30, 2024, from https://pib.gov.in/PressReleasePage.aspx?PRID=2042069

About the Contributor: Anamitra Sinha, Policy Research Intern at IMPRI Institute and Master’s student in Development, Policy Planning, and Practice at Tata Institute of Social Science, School of Rural Development, Tuljapur (Off-Campus).

Acknowledgment: This article was reviewed by IMPRI experts such as Dr. Arjun Kumar and other collaborators along with peer reviewers.