Scaling Solar Power for Irrigation in India

Launched in 2019, the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM KUSUM) scheme aims to expand solar-powered irrigation, boost farmer incomes through energy generation, and reduce agricultural power subsidies. This report assesses the scheme’s two components, A and C-FLS, drawing on extensive fieldwork, research, and stakeholder consultations. It distills key implementation learnings and offers actionable recommendations to strengthen governance, financing, and execution for a scalable post-2026 scheme.den on states.

• The economic case of agricultural solarization is strong. Farmers who lease land earn an average of INR 30,000/acre annually, while those who invest earn 11%–16% returns.
• The next phase of PM-KUSUM should be designed in the spirit of cooperative federalism between the Union and states. The scheme should be flexible, enabling states to adapt and innovate deployment models to their context, and should enable innovations to disperse across state through cross-learning.
• States should design an “incentive stack” on top of the Union Government incentives: The state governments should complement the financial incentives with their own initiatives to speed up land identification and ready the grids.
• Adopt competitive bidding-based tariff discovery for agricultural solarization to better reflect market conditions and ensure cost-effective procurement.

The Government of India introduced the PM-KUSUM scheme in 2019 with a total outlay of INR 34,422 crores to add ~34,800 MW of solar power in the agriculture sector by March 2026. The scheme has three broad objectives: improving irrigation access through solar-powered irrigation, increasing farmers’ income by enabling them to become energy producers, and reducing the agricultural power subsidy burden on states.

This report provides a comprehensive assessment of the performance and outcomes of PM-KUSUM’s two grid-connected components: Component A and Component C-FLS. These two components promote medium-scale (typically 1–10 MW) decentralized solar power plants, connected to rural distribution substations and deployed on farmers’ land to support irrigation. While they have generated strong interest among states due to their potential to lower subsidy burdens and enable reliable daytime power for agriculture, progress has remained gradual, underscoring the need for targeted measures to enable scale-up.

Drawing on extensive research, fieldwork, and stakeholder consultations across Madhya Pradesh, Rajasthan, Tamil Nadu, and Karnataka, the report seeks to

• examine the progress and limitations in implementing PM-KUSUM Components A and C-FLS;
• highlight challenges faced by state agencies, developers, and farmers, drawing from evidence from field insights;
• provide actionable recommendations to strengthen governance, operational efficiency, and financing, as well as improve infrastructure, awareness, and implementation; and
• inform the design of a post-2026 scheme architecture that is investment-ready and enables state-specific innovations, fostering a long-term, scalable impact.

The report finds that barriers to scale fall into three interconnected categories: (a) governance challenges that limit state ownership and implementation capacity, (b) market barriers that deter potential small developers and new entrants from participating, through misaligned tariffs, thin financing, and fragmented approvals, and (c) structural constraints around land access and grid readiness that will only intensify as the scheme scales. For each barrier, the report documents what progressive states have already done and translates these lessons into actionable recommendations for the design of PM-KUSUM’s next phase.

Anas Rahman, Ashwitha Tunga, Hrishabh Chandra, Priyami Dutta, Bharat Sharma, Richik Bandopadhyay, and Ayush Kumar Jha also co-authored the report.

The report was launched at an event in New Delhi on 8 April. At the event, Rishu Garg moderated a session titled ‘Voices from the Ground: What It Takes to Make Solarisation Work’ to discuss the developments on the ground until now.
The report and its findings have been covered by various publications, including Press Trust of India, Business Standard, PV Magazine, and Deccan Herald.