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Govt set to launch new version of PM KUSUM scheme focusing on agri solar PV component

March 10, 2026 4 min read Economics Environment & Ecology GS3 (Agriculture Energy Environment)
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What Happened

  • The government is preparing to launch PM-KUSUM 2.0, the successor to the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan scheme, with a dedicated 10 GW agri-photovoltaic (agri-PV) component.
  • The new version will focus particularly on feeder-level solarisation (Component C) and agro-photovoltaics, enabling farmers to grow crops and generate solar electricity simultaneously on the same land.
  • PM-KUSUM 2.0 is designed to address implementation gaps in the current scheme and reduce the subsidy burden on electricity distribution companies (DISCOMs).
  • The current PM-KUSUM scheme crossed 10 GW of installed solar capacity by November 2025, with over 20 lakh farmers benefiting; the successor scheme aims to expand this significantly.
  • Enhanced private sector participation, improved state-level coordination, and innovative financing models are expected to be central features of the new version.

Static Topic Bridges

PM-KUSUM Scheme — Architecture and Components

PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) was launched by the Ministry of New and Renewable Energy (MNRE) in 2019 with the goal of decarbonising agricultural power consumption and providing farmers an additional income stream through solar energy. The scheme has a total outlay of ₹34,422 crore and targets adding 34,800 MW of solar capacity by March 2026.

  • Component A: Setting up 10,000 MW of decentralised ground/stilt-mounted grid-connected solar power plants on barren/fallow land by farmers, cooperatives, and panchayats
  • Component B: Installation of 14 lakh standalone off-grid solar agriculture pumps (replacing diesel pumps)
  • Component C: Solarisation of 35 lakh grid-connected agriculture pumps, including feeder-level solarisation — this is the component PM-KUSUM 2.0 will most heavily emphasise
  • Nodal Ministry: Ministry of New and Renewable Energy (MNRE)
  • Funding pattern: Central subsidy (30%) + state subsidy (30%) + farmer contribution (40%, or via bank loan)

Connection to this news: PM-KUSUM 2.0 builds directly on this three-component architecture, with the agri-PV addition representing a fourth innovation layer — generating electricity from the same land already used for cultivation.

Agro-Photovoltaics (Agri-PV) — Concept and Significance

Agro-photovoltaics (agri-PV) refers to the dual use of agricultural land for both crop cultivation and solar power generation. Solar panels are mounted on elevated structures at heights that allow crops to grow beneath them. This model addresses one of the key tensions in India's renewable energy expansion — competition between solar installations and agricultural land.

  • Agri-PV can increase total land productivity by 60–70% compared to single-use (either crops or solar alone)
  • Some crops — particularly shade-tolerant varieties like wheat, potatoes, and leafy vegetables — benefit from the partial shade provided by solar panels, reducing water evaporation and heat stress
  • India's first large-scale agri-PV pilot was conducted in Rajasthan under the MNRE framework
  • Germany and Japan are global leaders in agri-PV; India's 10 GW target under PM-KUSUM 2.0 would make it one of the largest programmes globally
  • Agri-PV directly supports India's NDC target of 50% non-fossil fuel electricity capacity by 2030

Connection to this news: The dedicated 10 GW agri-PV component in PM-KUSUM 2.0 signals a strategic pivot from simply solarising pumps to embedding renewable energy generation into the farming process itself.

DISCOM Stress and Agricultural Power Subsidies

State electricity distribution companies (DISCOMs) in India face a structural problem: agricultural consumers receive heavily subsidised or free power, but the cost of this subsidy is borne by DISCOMs, contributing to their chronic financial stress. Total DISCOM losses in India exceeded ₹5.5 lakh crore (cumulative) by 2023. Feeder-level solarisation — where entire agricultural feeders are powered by dedicated solar plants — directly addresses this by replacing subsidised grid power with cheaper solar power.

  • Component C (feeder solarisation) allows farmers to receive daytime solar power free while any surplus is fed back to the grid, giving DISCOMs a tradeable asset
  • The UDAY scheme (2015) and its successor RDSS (Revamped Distribution Sector Scheme, 2021) have attempted DISCOM turnaround; PM-KUSUM C complements these by attacking the agricultural power subsidy problem at its root
  • PM-KUSUM 2.0's focus on feeder solarisation is expected to reduce DISCOM subsidy burden significantly

Connection to this news: By prioritising feeder-level solarisation in PM-KUSUM 2.0, the government is addressing both farmer welfare (reliable daytime power, income from surplus) and DISCOM financial health — a dual policy objective with Mains GS3 relevance.

Key Facts & Data

  • PM-KUSUM launched: 2019, by Ministry of New and Renewable Energy (MNRE)
  • Current scheme total outlay: ₹34,422 crore; solar target: 34,800 MW by March 2026
  • Installed capacity under PM-KUSUM as of November 2025: over 10,000 MW
  • Beneficiaries under current scheme: over 20 lakh farmers
  • PM-KUSUM 2.0 dedicated agri-PV component: 10 GW
  • India's overall renewable energy target: 500 GW by 2030 (NDC commitment)
  • Agriculture sector consumes approximately 17–20% of India's total electricity; mostly subsidised
  • Component C (feeder solarisation) is the focus of PM-KUSUM 2.0 to ease DISCOM burden