What Happened
- A study has identified weak grid infrastructure, land access constraints, and financial barriers for developers as the key reasons PM-KUSUM's solar capacity targets have not been met
- Implementation has been uneven across states, with Component A (decentralised solar plants) achieving only about 8.4% of deployment targets and Component C (feeder-level solarisation) achieving around 38.2%
- Small developers face difficulty securing bank financing, with lending institutions hesitant to extend loans as the original programme deadline of March 31, 2026 approached
- Low electricity tariffs offered to developers by state power distribution companies (discoms) have made projects financially unviable in many states
- The government is preparing PM-KUSUM 2.0 with revised financing structures and an enhanced focus on feeder-level solarisation to address first-phase shortfalls
Static Topic Bridges
PM-KUSUM Scheme — Components and Targets
PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan) is a flagship agricultural solarisation programme launched in March 2019 by the Ministry of New and Renewable Energy (MNRE). It aims to reduce farmers' dependence on diesel pumps and grid electricity subsidies while generating additional income for farmers through solar power.
- Component A: Installation of 10,000 MW of decentralised ground/stilt-mounted grid-connected solar or other renewable energy plants on barren land
- Component B: Installation of 14 lakh stand-alone solar agriculture pumps (off-grid)
- Component C: Solarisation of 35 lakh grid-connected agriculture pumps, including feeder-level solarisation (FLS)
- Total target: 34,800 MW of solar capacity by March 2026, with Central Financial Support of ₹34,422 crore
- Nodal ministry: Ministry of New and Renewable Energy (MNRE)
Connection to this news: The study's findings reveal that while the scheme's design is sound, structural barriers — weak grid infrastructure, land disputes, and thin developer margins — have prevented the programme from realising its stated targets, necessitating a redesigned PM-KUSUM 2.0.
Grid Infrastructure and Discoms — Key Structural Constraints
India's agricultural electricity system is characterised by heavily subsidised tariffs for farmers (often free or near-free electricity), which creates financial stress for state distribution companies (discoms). Discoms frequently delay payments for power procured under schemes like PM-KUSUM, making solar projects commercially unviable for private developers.
- Feeder separation — physically separating agricultural feeders from domestic feeders — is a prerequisite for feeder-level solarisation (Component C), but progress has been slow across many states
- The PM-KUSUM scheme requires discoms to sign Power Purchase Agreements (PPAs) with solar developers at viable tariffs; misaligned tariffs in several states have discouraged entry
- States with higher discom payment track records (e.g., Gujarat, Rajasthan) have seen better PM-KUSUM progress compared to states with weak discoms
- UDAY (Ujwal DISCOM Assurance Yojana, 2015) and later the Revamped Distribution Sector Scheme (RDSS, 2021) have attempted to address discom viability but implementation remains uneven
Connection to this news: The study confirms that grid readiness and discom payment credibility are the primary bottlenecks, not farmer demand — which suggests that the PM-KUSUM 2.0 redesign should prioritise feeder separation and PPA enforcement mechanisms.
Agricultural Energy Subsidies and Fiscal Implications
Agricultural electricity subsidies form one of the largest fiscal burdens on state governments in India. Most states provide heavily subsidised or free electricity to farmers, creating incentives for inefficient water use and financial stress on discoms. PM-KUSUM was designed in part to help states reduce this subsidy burden by transitioning to solar irrigation.
- India's total farm power subsidies are estimated at over ₹70,000 crore annually across states [Unverified — varies by source and year]
- Research by IISD (International Institute for Sustainable Development) found PM-KUSUM could cut electricity subsidies while accelerating solar irrigation, but only if discoms are structurally reformed
- The scheme allows farmers to sell surplus power to the grid at a fixed tariff, creating dual income (reduced pump costs + solar revenue) — the core incentive design
- Under PM-PRANAM (2023), states are incentivised to reduce chemical fertiliser use; a similar incentive logic applies to PM-KUSUM for renewable energy uptake
Connection to this news: Financial barriers for small developers are directly linked to discom viability and state subsidy structures — PM-KUSUM's underperformance reflects the broader challenge of energy subsidy reform in Indian agriculture.
Key Facts & Data
- PM-KUSUM launched: March 2019 by MNRE
- Total solar target: 34,800 MW by March 2026
- Central financial support: ₹34,422 crore
- Component A deployment: ~8.4% of target achieved (as of early 2026)
- Component C feeder-level solarisation: ~38.2% of target achieved
- Component B: 14 lakh stand-alone solar pumps target
- PM-KUSUM 2.0 under preparation with focus on feeder-level solarisation
- India's agricultural diesel pump count: approximately 90 lakh (diesel + electric) [Unverified]
- Three marks on hallmarked jewellery analogy aside — key MNRE nodal agency implements scheme at state level via State Nodal Agencies (SNAs)