Published : Aug 13, 2026 13:32 IST – 9 MINS READ
COMMents
SHARE
READ LATER
Farmers cleaning their solar panels in Gujarat’s Kheda district. The PM-KUSUM scheme was meant to connect the transition to solar energy to agricultural livelihoods. | Photo Credit: Vijay Soneji
Launched in 2019, the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) was meant to connect the energy transition to agricultural livelihoods. Farmers can replace diesel pumps with solar pumps, solarise existing grid-connected pumps, lease land for renewable-energy projects, or even become electricity producers.
The ambition is considerable. The Ministry of New and Renewable Energy (MNRE) aims to set up 34,800 MW of solar capacity under PM-KUSUM with Central financial support of Rs.34,422 crore. Component A proposes to solarise 10,000 MW of decentralised renewable-energy plants; Component B aims to solarise 14 lakh stand-alone solar agriculture pumps; and Component C proposes to solarise 35 lakh grid-connected pumps, including through feeder-level solarisation.
The scheme brings together several interests: lower carbon emissions, less dependence on diesel, more reliable daytime electricity, more cash for farmers, and lower power-purchase and agricultural-subsidy costs for States. But beneath these goals lies a distributional question that gets far less attention: which farmer is best placed to become a solar entrepreneur?
That question matters because India’s agrarian structure is dominated by farmers with small plots of land. As per the Agriculture Census 2015-16, 86 per cent of operational holdings in India are small or marginal, and the national average operational holding has declined to just 1.08 hectares. Solar agriculture thus operates in a rural context where the resource on which one part of the programme depends—land—is already deeply fractured.
Component A is arguably the most radical element of the original PM-KUSUM proposal. Individual farmers, farmer organisations, cooperatives, panchayats, Farmer Producer Organisations (FPO), and Water User Associations (WUA) can establish renewable-energy installations of 500 kW to 2 MW. State electricity regulators set or permit the rates at which utilities purchase this electricity. If qualifying farmers cannot raise the required capital, the guidelines allow a developer or the local distribution company (DISCOM) to build the plant instead, with the landowner getting a lease rent. On paper, the farmer can move up the energy value chain, from being an electricity consumer to an electricity producer, landlord, or energy entrepreneur. But the difference between building a 500-kW or 2-MW power plant and buying agricultural inputs is fundamental.
Research by the Council on Energy, Environment and Water (CEEW) has identified farmers’ inability to mobilise equity or finance as one of the roadblocks for Component A. Its review found that farmers winning projects may struggle to provide the equity lenders require, and that collateral requirements are another barrier. This creates an undercurrent of tension: a scheme meant to raise farm incomes could end up favouring households that already have enough assets, land, or borrowing capacity to invest in direct ownership.
CEEW’s study of early implementation of Component A in Rajasthan and Karnataka found that more than 40 per cent of applicants interviewed by officials chose to invest in the plant themselves, suggesting, the researchers argued, that relatively well-off farmers with access to equity are best placed to be the primary beneficiaries of direct ownership. There is a crucial difference between owning solar infrastructure and renting land to someone who owns it. Both generate income, but they distribute the economic benefits of the energy transition very differently.
The implementation record of PM-KUSUM shows how difficult it is to translate the idea of the “solar farmer” into large-scale infrastructure. A review found that only about 720 MW of the 10,000 MW target had been commissioned under Component A by December 31, 2025—about 7.2 per cent. Since then, the picture has improved. As of June 30, 2026, 1,726.92 MW of installations under Component A have been reported on MNRE’s PM-KUSUM webpage against a sanctioned figure of 10,000 MW, a significant jump, though still far short of the original target. Component B, meanwhile, has made much greater strides: the portal states that some 11.5 lakh stand-alone solar agricultural pumps had been installed by June 2026.
A subsidised pump is a standardisable, tenderable intervention that can be provided to a large number of beneficiaries. Turning farmers into decentralised power producers is more complex: it requires land identification, project development, funding, grid connectivity, tariff-setting, power purchase agreements, and negotiations among farmers, developers, DISCOMs, and state agencies.
The Lok Sabha Committee on Estimates, in its report on PM-KUSUM in December 2025, recommended that the constraints in Component A be examined in detail, including State-level approvals, availability of land, clearances, and cooperation between the Centre and State governments. The slowest-moving part of the programme may also be the most far-reaching.
Renewable-energy projects need substantial upfront investment. Even if a project is commercially successful over its lifetime, a farmer must first reach financial close. A wealthier farmer may have title deeds, collateral, savings, connections with capital, and the ability to withstand delay. A marginal grower may have none of these advantages. The question is not whether credit exists, but who lenders deem bankable.
When the marginal cost of operating a solar pump approaches zero, farmers have little direct financial motivation to conserve groundwater. | Photo Credit: Ritu Raj Konwar
Component A has been shifted to the Agriculture Infrastructure Fund on account of financial constraints. In 2025, a parliamentary committee reviewing the MNRE’s grant requests noted that this was expected to result in subsidised loans for solar projects of up to 2 MW. As per data provided to Parliament, 2,801 PM-KUSUM projects had been approved under the Agriculture Infrastructure Fund as of February 6, 2026. That could matter. However, cheap finance does not remove differences in collateral, transaction costs, financial literacy, land documentation, or risk-bearing capacity. The energy transition can therefore look like a familiar hierarchy: those who own assets gain access to another asset.
Component A is not alone in its difficulty distributing benefits evenly. Components B and C relate more specifically to irrigation. For farmers who depend on costly petroleum or unreliable energy, solar pumps can be transformative. Subsidies cut the initial cost significantly, and solar power can cut ongoing watering costs. But privately owned irrigation assets pose problems of scale and access.
When the marginal cost of operating a solar pump approaches zero, farmers have little direct financial motivation to conserve groundwater. In regions where water is scarce, agricultural solarisation without groundwater governance can increase extraction. A programme meant to reduce energy inequality could thus lead to more water stress if it is not designed with the right incentives. The answer is not to abandon agricultural solarisation, but to shift the focus from measuring megawatts and pumps to asking who benefits financially and who bears the risk.
PM-KUSUM has an institutional approach that could reduce dependence on individual wealth for solar ownership. Component A clearly provides for projects to be set up by farmer groups, cooperatives, panchayats, FPOs, and WUAs. Aggregation changes the economics for smallholders: farmers can pool their land, spread finance risk, and access professional project management services. A single marginal grower cannot negotiate with developers and DISCOMs, but an FPO or cooperative can. However, an earlier implementation study found limited participation of farmer collectives in some States and insufficient effort to mobilise them. That is where policy designers should now focus.
Instead of defaulting to the individual landowner as the standard solar entrepreneur, States could actively pursue collective solar models: locating clusters of smallholders near suitable substations, helping them organise the project, providing standard contracts, helping them access concessional financing, and creating independent advisory support to help them negotiate with developers. Aggregation will still happen, but it may be done by private intermediaries rather than farmers themselves.
There is a larger lesson here for India’s energy transition. The country has added solar capacity at a striking rate. By June 30, 2026, the MNRE said total solar capacity had crossed 162.15 GW, with about 121 GW of that ground-mounted. But aggregate capacity says nothing about ownership. In India’s renewable-energy statistics, a megawatt installed by a large renewable-energy business, a cooperative, a panchayat, or a group of marginal farmers is treated equally. But these models are quite different, economically and politically. PM-KUSUM’s success should not be measured only in installed megawatts, pump installations, or tonnes of emissions averted.
The government should release beneficiary statistics based on landholding category, gender, caste, and ownership type, while protecting individual privacy. It should differentiate between farmers who own projects, farmers who work through collectives, and those who simply lease their land to developers. Where developer-owned models dominate, minimum or indexed lease-rent safeguards should be considered, particularly as individual smallholders may have limited bargaining power.
States could also consider revenue-sharing models instead of fixed rentals. Credit guarantees can reduce lenders’ collateral concerns for genuine farmer-owned projects. Technical assistance to FPOs and cooperatives needs particular attention. In areas where permanently removing productive agricultural land from farming would threaten livelihoods, agrivoltaic designs should be encouraged. And solarisation needs to be linked to groundwater policy, not treated only as an energy intervention.
One of the most interesting possibilities in India’s climate transition is that PM-KUSUM shows decarbonisation need not be confined to generating power for rural India—it can also generate assets and income within it. The scheme could lower agricultural electricity costs, boost daytime power supply, cut fuel use, reduce state subsidy burdens, and provide new income streams for farmers. The economic case for solarising agricultural demand is thus growing more persuasive. But economic efficiency and distributive fairness are not the same test.
If the shift requires substantial land, collateral, and investment capacity, rural inequality will shape who can take part. Larger farms might begin generating electricity; some may become landlords collecting rent. Others—tenants, landless agricultural workers, and marginal producers without sufficient finance—are likely to be largely excluded from the emerging solar economy.
India’s agricultural solar programme has advanced far enough that the question of whether solar can work on farms is no longer in doubt. Clearly, it can. The more pertinent question is who will own it. The answer will determine whether farm solarisation simply changes the source of rural electricity, or whether it also transforms the economic power that comes with it.
Anusreeta Dutta is a columnist and climate researcher with experience in political research analysis, ESG research, and energy policy.
Also Read | Solar panels mitigate climate change faster than forest cover
Also Read | A solar cell with unprecedented power conversion efficiency
CONTRIBUTE YOUR COMMENTS
SHARE THIS STORY
COMMents
SHARE
BACK TO TOP
Terms & conditions | Institutional Subscriber
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide to our community guidelines for posting your comment
We have migrated to a new commenting platform. If you are already a registered user of The Frontline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments.
