PM-KUSUM scheme: Everything farmers need to know

Each of these components addresses a distinct challenge faced by Indian farmers. A closer look at them shows how PM-KUSUM combines energy access with income security and operational reliability.

1)  Component A: Decentralized solar power plants and new income streams

Component A of the PM-KUSUM scheme focuses on setting up decentralized solar power plants ranging from 0.5 MW to 2 MW on agricultural or community-owned land. This includes wasteland, fallow land, and vacant agricultural land that may otherwise remain underutilized. The intent is to convert available land into a productive energy asset while retaining its agricultural character and ownership.

Under this component, individual farmers, Farmer Producer Organizations (FPOs), cooperatives, Panchayats, and other local bodies can develop solar projects in one of two ways. They may choose to own and operate the solar power plant themselves, or they may enter into partnerships with private solar developers through structured contracts. These arrangements are typically designed for long-term operation, often extending up to 25 years, providing clarity and income visibility from the outset.

The primary outcome of Component A is the generation of steady, long-term revenue through the sale of electricity produced by these solar power plants to DISCOMs. Importantly, farmers and landowners continue to retain ownership of their land, using solar generation as an additional income avenue rather than a land replacement activity. Over time, this approach strengthens rural financial resilience by reducing dependence on seasonal agricultural income alone.

Eligibility: Individual farmers, FPOs, cooperatives, Panchayats, local institutions.

Financial support: Up to 60% subsidy (central + state), up to 30% bank loan, farmer contribution ~10% (varies by state).

There are numerous benefits for farmers using this method:

• Predictable long-term income

Farmers can enter into land lease agreements for up to 25 years, ensuring a stable and often inflation-linked income stream without the need to manage daily plant operations.

• Dual use of agricultural land

Stilt-mounted solar panel structures allow farming activities to continue beneath the panels. This enables farmers to earn simultaneously from crop cultivation and solar power generation on the same land parcel.

• Participation through partnerships and shared ownership

By partnering with solar developers, farmers, FPOs, cooperatives, and local institutions can participate in shared ownership or revenue-sharing models, opening up additional income opportunities without high upfront investment.

• Local employment generation

The construction, operation, and maintenance of decentralized solar plants create skilled and semi-skilled jobs within nearby villages, contributing to the rural economy beyond the farming household.

Together, income from agricultural production and solar power becomes more stable and predictable. For many landowners, this combination provides greater confidence in long-term financial planning, helping agriculture transition from a high-risk livelihood to a more resilient and diversified income system.

2)  Component B: PM-KUSUM solar pump scheme for off-grid farms

Component B of the PM-KUSUM scheme addresses the irrigation needs of agricultural farms that lack grid access or experience erratic and limited electricity supply. Commonly referred to as the PM-KUSUM solar pump scheme, this component supports the deployment of standalone solar-powered agricultural pumping systems, enabling farmers to draw water using solar energy rather than diesel or unreliable grid power.

By replacing diesel pumps, Component B reduces farmers’ exposure to rising fuel costs and supply uncertainties. Solar pumps operate independently of fuel availability, allowing irrigation to continue during critical crop growth periods without interruption. Over time, the simpler design and fewer moving parts of solar pumping systems also result in lower maintenance requirements compared to conventional diesel engines.

Compared to diesel pumps, solar pumps eliminate fuel costs and significantly reduce maintenance expenses over their operating lifetime.

Eligibility: Individual farmers in off-grid or low-grid areas.

Financial support: Up to 60% subsidy, 30% bank loan, balance by farmer; reduces long-term irrigation costs and diesel dependence.

Key advantages for farmers include:

• Long-term savings on irrigation costs through reduced fuel and maintenance expenditure
• Freedom from diesel dependence, protecting farmers from fluctuating fuel prices
• More reliable irrigation access, especially during peak seasonal and water-intensive stages of cultivation

By focusing on off-grid and underserved regions, Component B ensures that farmers in remote and difficult-to-reach areas can benefit from solar energy adoption. In doing so, it extends the reach of PM-KUSUM beyond well-connected regions, making clean and dependable irrigation a practical reality across diverse agricultural landscapes.

3)  Component C: Reliable daytime power through feeder-level solarization

Component C focuses on solarizing existing grid-connected agricultural pumps and feeders to provide reliable daytime electricity for irrigation. Instead of depending on night-time power supply, farmers receive electricity during working hours, improving safety and convenience.

This approach plays a crucial role in enhancing irrigation reliability with solar power, particularly in states such as Maharashtra, Rajasthan, Gujarat, Haryana, Madhya Pradesh, and Karnataka, where feeder-level solarization has seen strong progress.

Eligibility: Grid-connected farmers or agricultural consumers.

Financial support: Subsidy and loan structure similar to Component B; ensures reliable daytime electricity.

Farmers benefit through:

• Enhanced safety during irrigation and elimination of late-night operations.
• Improved crop planning due to the consistent timing of water availability.
• Increased lifespan of pumps due to constant supply of power stability.
• Improved electric power reliability to rural feeders and village communities.

By strengthening rural power infrastructure at the feeder level, Component C contributes to broader improvements in agricultural productivity and village-level energy stability.