India’s agricultural solar sector has spent the last few years learning the same lesson project by project. Getting solar panels installed was never the hard part. Getting paid on schedule, and getting utilities to treat these projects as bankable, was. That is the part of India’s farm energy story the national conversation skips, and it is why I believe what a farmer grows will matter less over the next decade than how that farmer produces, stores and pays for power. Solar pumps, feeder solarisation, agrivoltaics, storage and financing are no longer side conversations to agriculture policy. They are the main one.
PM-KUSUM is the clearest test case. Launched in 2019 to move farmers off diesel, the scheme closed its first phase on March 31, 2026, against a target of 34,800 MW backed by ₹34,422 crore. Component A, where individual farmers build small plants and negotiate directly with DISCOMs, undershot its target badly. Feeder-level solarisation, built at utility scale, came far closer to plan. That gap is a verdict on which delivery models survive contact with an Indian DISCOM.
Where the model breaks, and where it holds
Component A struggled because DISCOMs would not commit to fixed-tariff purchase agreements with individual farmers, and those negotiations, between a small landholder and a state utility, were never equal. Add collateral requirements most smallholders cannot meet, and many projects stalled on paperwork. Feeder solarisation avoided that trap by working at a scale utilities can actually underwrite. States like Madhya Pradesh have started routing developer payments through escrow-style arrangements that insulate projects from DISCOM payment delays, and financing has moved faster wherever that model has been used.
In my view, this is the pattern the rest of the industry needs to copy: de-risk the utility’s payment obligation first, and installation follows on its own. It is also why PM-KUSUM 2.0, expected to carry an outlay near ₹50,000 crore, is being built around feeder-level solar rather than one option among three.
The grid was not built for this, and that matters for food prices too
A second constraint sits underneath the financing problem. Rural feeders were engineered for power to flow one way, grid to farm. Decentralised solar reverses that flow, and several states are already seeing voltage swings and transformer stress during peak solar hours. The fixes, smart metering, reactive power support, transformer upgrades, are known and doable, but none were part of the scheme’s original design.
Getting this right carries weight beyond the farm gate. Every rupee a farmer saves on diesel or unreliable grid power comes off the cost of growing that crop, and multiplied across the hectares under groundwater irrigation, that saving shapes staple crop prices too. Energy reform in agriculture is a food security lever as much as a farm income one.
Free power has a cost of its own
There is a risk almost nobody in this conversation raises. When a farmer switches from paying for diesel to running a solar pump at near-zero marginal cost, the instinct is to pump more, not less. Cheap daytime power removes the one constraint that has always limited groundwater use. Solarisation without a parallel push on drip irrigation and aquifer regulation risks solving one problem by creating a worse one. Linking PM-KUSUM payouts to enrolment in the Pradhan Mantri Krishi Sinchayee Yojana is a real fix on the table, and it should be mandatory in the next phase.
The benefits still skew toward the farmers who need them least
Component C lets farmers sell surplus power back to the grid as prosumers, but that income mostly reaches those who already hold enough contiguous land and can afford the right pump size to generate a sellable surplus. Tenant farmers and smallholders, who make up most of India’s agricultural workforce, are largely locked out. Routing financing through the Agriculture Infrastructure Fund and pushing Farmer Producer Organisations into the developer role would close that gap without slowing anything else down.
Where this model has worked, the returns are real. Component A projects have generated annual returns of 11 to 16 per cent for farmers and developers who got through the financing maze, alongside a second income stream from the land itself and thousands of new rural jobs. None of that shows up in a conversation about seed varieties.
India’s first Green Revolution worked because seeds, irrigation, fertiliser and policy moved together. This transition will succeed or stall on the same logic. The technology already works. What is unresolved is the plumbing, DISCOM payment discipline, grid readiness, water regulation and access for farmers who own the least land. That is the real scorecard for PM-KUSUM 2.0.
Fixing this will take DISCOMs willing to treat farmers as bankable partners, financiers willing to underwrite rural energy at scale, and an industry willing to be judged on service quality years after installation, not the day the panels go up. I would go further: EPC quality, not installation speed, is what determines whether a solar asset still generates reliable income a decade from now, and it deserves to be treated as central to rural resilience, not a compliance checkbox. Get that right, and rural India’s next big income gain will come from something that was never planted at all.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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