NEW DELHI: Poor grid infrastructure, financial barriers for small developers, access to land and low tariff rates are among the major hurdles that have slowed the progress of Pradhan Mantri Kisan Urja Suraksha, India’s flagship program to promote solar energy in agriculture, according to a new analysis.
While the scheme aims to install 34.8 GW of solar capacity by March 2026, at the end of its first phase, only 14 GW has been commissioned so far.
PM-KUSUM is an important initiative as it aims to provide energy and water security to farmers, enhance their income, remove diesel fuel from the agricultural sector, and reduce environmental pollution.
These gaps were raised in an analysis titled “Scaling up solar power for irrigation in India: Lessons from PM-KUSUM”, published on April 8.
It has been implemented by the Council on Energy, Environment and Water, the Center for the Study of Science, Technology and Policy and the International Institute for Sustainable Development.
Speaking to PTI, Anas Rehman, Senior Policy Advisor at IISD, said: “While most countries have been able to address the issue of low tariff rates in recent years, grid infrastructure and land availability remain a challenge. These will need to be addressed as the implementation of the second phase of the scheme begins.”
Rahman noted that the targeted solar capacity should be achieved in the following months, as several projects are under implementation.
In an office memorandum issued on March 28, the Ministry of New and Renewable Energy said: “In order to complete PM Kusum’s projects where the PPAs/NTPs were signed/issued on or before 31.12.2025 only, it has been decided to extend the timelines up to 31.03.2027.”
The ministry also asked the states to “coordinate with banks to facilitate loans and financial closure of projects, after 31.03.2026, as the existing scheme is proposed to be included under PM KUSUM 2.0”.
PM-KUSUM COMPONENTS
The scheme was launched in 2019 and consists of three components. Under Component A, farmers can install solar power plants on their land, connect them to the grid and sell the energy for additional income. There is no government support in this component, and farmers bear the entire investment.
Component B involves installing off-grid solar irrigation pumps, meaning a small solar panel in the field powers an irrigation pump that is not connected to the grid. This component is intended to replace expensive diesel pumps, which also pollute the environment. Off-grid solar irrigation pumps are provided at subsidized costs, which are shared between the Center and the respective state governments.
Component C consists of two parts. The C-IPS system, where a small solar power plant is set up in each field, is similar to rooftop solar, and allows farmers to use the energy and sell the surplus to disco companies.
The C-FLS system involves installing a larger solar power plant near an electrical substation where power is supplied to all farmers connected to it through a feeder line.
“The C-FLS system was added later in the scheme. This is because the C-IPS system did not receive much attention as under it, farmers are required to contribute at least 10 per cent of the cost of the plant, which many did not want to do. The C-FLS system allowed DISCOM to invest in the solar power plant,” Rahman said. While this means that farmers cannot sell the energy again for income, they receive energy during the day without having to invest.”
Challenges
The report focused on two components of the plan, Component A and Component C-Fils, which were able to meet only 8.4 percent and 38.2 percent of their targets, respectively. Compared to these two components, Component B performed much better and added 7.54 GW of solar energy.
According to a statement issued by the Press Information Bureau in December last year, as of October 2025, more than nine thousand autonomous pumps have been installed under Component B.
“Under Component C, a total of 10,535 grid-connected solar pumps have been equipped with solar power, and 9,74,458 feeder-level solar pumps have been completed,” the statement said.
In the early years, the progress of PM-KUSUM slowed down considerably due to the fact that developers did not submit bids for the installation of solar power plants under Component A and C-FLS.
“This happened because state governments set maximum tariffs based on large solar parks, something that was not possible for smaller, distributed plants with higher logistics costs,” Rahman said. “The tenders saw no takers for years until states allowed competitive bidding without fixed caps.”
Another problem is finding suitable land for the installation of solar power plants, especially under the C-FLS component.
For example, developers have been unable to find affordable land near substations, which are usually in agriculturally intensive areas where land is expensive.
For a solar power plant to be profitable, it must be within five kilometers of the substation, which makes the cost of constructing electrical lines low and ensures that transmission losses are minimized.
It was also difficult for developers to find farmers who were willing to lease their land to install solar power plants.
Under this scheme, many of them were new entrants and small developers, and were unable to finance solar power plants.
“Since discom companies are financially weak, banks have been reluctant to lend to developers for fear that they will not get paid,” Rahman said.
Weak rural distribution networks also posed a problem, suffering from chronic voltage drops during the irrigation season and voltage surges with reverse power flow during the off-season.
This led to solar plants shutting down frequently and developers losing power generation.
As PM-KUSUM enters the next phase, there is a need to resolve these issues to make solar irrigation financially sustainable for both utilities and farmers, Rahman noted.
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