About PM-KUSUM Yojna: It is aimed at ensuring energy security for farmers in India and honoring India’s commitment to increase the share of installed capacity of electric power from non-fossil-fuel sources to 40% by 2030 as part of Intended Nationally Determined Contributions (INDCs). The KUSUM scheme would provide additional income to farmers, by giving them the option to sell additional power to the grid, through solar power projects set up on their barren lands.

The PM-KUSUM Scheme was launched in 2019 with 3 components:

Component-A: For Setting up of 10,000 MW of Decentralized Grid-Connected Renewable Energy Power Plants on barren land

Under this component, renewable energy-based power plants (REPP) of capacity 500 kW to 2 MW will be set up by individual farmers/ group of farmers/ cooperatives/ panchayats/ Farmer Producer Organisations (FPO)/Water User associations (WUA) on barren/fallow land. These power plants can also be installed on cultivable land on stilts where crops can also be grown below the solar panels. The renewable energy power project will be installed within a five km radius of the sub-stations in order to avoid the high cost of sub-transmission lines and to reduce transmission losses. The power generated will be purchased by local DISCOM at a pre-fixed tariff

  • Component-B: For Installation of 17.50 Lakh stand-alone solar agriculture pumps. 

Under this Component, individual farmers will be supported to install standalone solar Agriculture pumps of capacity up to 7.5 HP for replacement of existing diesel Agriculture pumps/irrigation systems in off-grid areas, where grid supply is not available. Pumps of capacity higher than 7.5 HP can also be installed, however, the financial support will be limited to 7.5 HP capacity

  • Component-C: For Solarisation of 10 Lakh Grid Connected Agriculture Pumps

Under this Component, individual farmers having grid-connected agriculture pumps will be supported to solarise pumps. The farmer will be able to use the generated solar power to meet the irrigation needs and the excess solar power will be sold to DISCOMs at a pre-fixed tariff.


  1. Electricity for agriculture is highly subsidised and is often termed as the main cause for rapid groundwater depletion and poor financial position of Discoms.
  2. This scheme will support the financial health of Discoms by reducing the burden of subsidy to the agriculture sector.
  3. The scheme will promote decentralised solar power production, and reduce transmission losses.
  4. For state governments, this is a potential way to reduce their subsidy outlay towards irrigation.
  5. Apart from it, the scheme will help States meet the RPOs (renewable purchase obligation) targets.
  6.  If farmers are able to sell surplus powers, they will be incentivised to save power and, in turn, it will mean the reasonable and efficient use of groundwater.
  7. This may also provide water security to farmers through the provision of assured water sources through solar water pumps — both off-grid and grid-connected.
  8.  Another intended benefit of this scheme will result in the expansion of the irrigation cover by providing decentralized solar-based irrigation and moving away from polluting diesel.
  9. This should also fill the void in solar power production in the intermediate range between rooftops and large parks.


  • Component-A: Procurement Based Incentive (PBI) @ 40 paise/kWh or Rs. 6.60 lakhs/MW/year, whichever is less, will be provided for the first five years by MNRE to DISCOMs, for buying the power from farmers/developers
  • Component-B & C:
  • CFA of 30% of the benchmark cost or the tender cost, whichever is lower. State Government subsidy 30%; Remaining 40% by the farmer
  • In North Eastern States, Sikkim, J&K, Himachal, Uttarakhand, Lakshadweep and A&N Islands, CFA of 50%, State Government subsidy 30%, Remaining 20% by the farmer

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