The Kusum Scheme stands as one of India’s most ambitious projects for rural energy reform, and many farmers across the country have already started to feel its impact. Kusum works through a simple idea it helps a farmer generate solar power right on their own land instead of depending only on the grid.
The Kusum program, short for Kisan Urja Suraksha Evam Utthaan Mahabhiyan, was built around one key objective turning farmlands into small power stations that benefit both the family and the nation.
Farmers who rely on diesel pumps or normal electrical pumps for irrigation often feel the strain of rising fuel costs, and this scheme offers a way out. By switching to solar pumps, a farmer reduces this dependency and earns an incentive for making the change.
The scheme aims to incentivize the usage of solar water pumps and solar-related water pumps, and it works to promote the wider operation of clean irrigation tools among farmers in every state.
Implementing Ministry Kusum scheme
The Ministry of New and Renewable Energy first proposed this idea during the 2018 budget, hoping to give Indian agriculture a fresh source of income.
The plan hit a few financial constraints in its early days, so it was not rolled out right away across the country. Once the funding puzzle gets solved, this scheme is set to play a pivotal role in helping farmers find alternative incomes beyond their usual harvest.
Many farming families know how unpredictable agricultural produce can be, especially when weather or market prices turn against them. Instead of worrying only about crop revenue, a farmer can now tap into solar energy sitting unused on their own farmlands.
This shift gives households a second income stream that does not depend on rainfall or mandi rates.
Components / Key Objectives of the Kusum Scheme
The Kusum scheme rests on three main components, each built to bring fresh energy options into Indian agriculture. The first component covers grid-connected solar power plants, with capacity limits set near 2 megawatts, mostly placed in rural areas where power lines already exist.
Component B focuses on standalone off-grid solar water pumps, giving farmers in areas without grid-connected pumps a way to irrigate without depending on old diesel pumps.
Component C deals with the solarization of existing grid-connected agricultural pumps, converting machines that once ran on non-solar energy sources into clean, solar-run tools. This part of the scheme also stretches to lift irrigation projects and tube wells, bringing the same clean-energy replacement to more corners of farm life. Today, close to 9 lakh pumps have already switched over, and farmers call it a genuine success story.
Distributed solar generation and feeder-connected solar generation turn farmland into a kind of new product factory, one that grows electricity instead of crops.
This setup also chips away at losses inside the distribution system, since power generated near the farm does not travel far before use. Beneficiary farmers finally get the daytime agricultural power they need, instead of power that arrives only at night through an unpredictable rotation schedule.
Cost-Sharing Structure
Money matters a lot to any farming family, so the scheme keeps its cost-sharing model simple and clear. A farmer does not pay the full price alone, since 60 percent of the total comes back as a subsidy. Within this support, 30 percent flows from the central government and another 30 percent comes from the state government.
That leaves the remaining 30 percent, which the farmer usually covers through a loan rather than paying cash upfront. This setup keeps the financial burden light enough that even a small landholder can afford to join the scheme.
Banks and local lenders now recognize this loan type, which makes the paperwork smoother than it used to be.
Selling Surplus Power to Discoms
For years, the farmer-discom relationship kusum scheme sat in a kind of low equilibrium, where neither side came out ahead. Farmers dealt with poor power supply, while distribution companies, often called discoms, watched their internal revenue keep bleeding year after year. The scheme finally gives both groups a reason to expect better days.
Under this new setup, a farmer can sell surplus power straight to the grid and pocket some additional revenue for the household.
Discoms, in turn, get to lower their power purchase costs while serving their most subsidized consumer group without as much financial strain. It turns out to be a genuine win-win, since both parties gain something they lacked before, and the farmer also receives an assured daytime power supply in return.
Scheme Targets & Capacity
The numbers behind this scheme show just how big the ambition really is. Planners have set a target of 28,250 MW in solar power production, to be reached across multiple phases rather than all at once. Close to ₹50,000 crore in government aid stands ready to support farmers as they make this shift.
In the initial phase, the goal is to build around 10,000 MW worth of solar plants directly on farm land. Alongside this, the plan includes handing out 1.75 million off-grid agricultural solar pumps to farmers who need irrigation support but lack a steady grid connection.
Each phase builds on the last, so the scheme grows in a steady, manageable way rather than rushing everything at once.
Background / Erratic Power
Many farmers know the frustration of high-cost diesel-run water pump sets that drain savings season after season. On top of that, erratic power supplies make planning almost impossible, since nobody can predict when the lights will stay on. The scheme steps in here, aiming to bring down energy consumption costs for households stuck in this cycle.
Land that stays uncultivated because of harsh drought factors or unpredictable climatic factors no longer has to sit idle.
A farmer can turn these barren lands into a working solar setup instead of leaving them empty. This gives the household a genuine alternative source of income, even in years when the soil itself refuses to cooperate.
Gujarat Dhundi Model (Inspiration for Kusum)
Long before the Kusum Scheme took its current shape, a small pilot in Gujarat’s Dhundi district showed what was possible. Just six farmers took part in this early test, selling surplus solar power back to the grid over a two-year period.
The results convinced policymakers that an alternative revenue model for farmers could actually work on a larger scale.
These six households earned a steady average revenue from their extra power, and that single result became the trigger factor behind the national rollout. It is a small example, but it carries a big lesson about what happens when farmers get a real stake in clean energy.
The Dhundi story still gets mentioned whenever someone asks why the government believed in this idea in the first place.
Benefits to Farmers
Speaking with farmers directly, I noticed a genuine strong interest in what this scheme offers, far beyond the usual polite nodding you get with government programs. Many see it as a real upgrade to their livelihood, not just another subsidy scheme on paper.
They talk about it as a fresh revenue stream, something that finally puts spare farmland to good use.
This shift also pulls these households closer to the mainstream of the country’s economy, rather than leaving them on the margins. When a farmer earns from clean energy alongside traditional crops, the household budget stops depending so heavily on a single source.
That kind of stability matters more than most policy papers ever capture.
Linking Kusum Scheme with the Agriculture Infrastructure Fund (AIF)
There is also talk of linking the PM Kusum scheme with the Agriculture Infrastructure Fund, known simply as the AIF. Launched in 2019, the AIF was built to offer medium-to-long-term debt financing for projects tied to post-harvest management infrastructure and community farming assets across the agriculture sector.
By connecting it to Kusum, farmers could gain access to cheaper loans for buying equipment and setting up new solar projects.
Right now, banks usually charge somewhere between 8-11 percent on loans of this kind, which feels steep for a small farming household.
Under the ₹1 trillion AIF, that rate drops to roughly 6 percent, a difference that genuinely changes what a family can afford. This move also supports.
India’s wider push toward energy security and a higher share of non-fossil fuel sources in the country’s installed power capacity, while the central government keeps pushing clean energy further into everyday farm life.
FAQS about Kusum Scheme
What is the aim of KUSUM Scheme?
The PM-KUSUM Scheme aims to give farmers energy security and boost their income through solar power. It reduces dependence on diesel and unreliable grid electricity for irrigation.
Who is eligible for KUSUM Scheme?
Individual farmers, cooperatives, panchayats, FPOs, and Water User Associations (WUAs) can apply under the PM-KUSUM Scheme. They may also partner with developers or local DISCOMs if needed.
What is the cost of 1 MW in PM Kusum Yojana?
Setting up 1 MW of solar capacity under Component A costs around ₹4 crore, needing 4–5 acres of land. Subsidies and DISCOM incentives help lower this burden for farmers.
When was Kusum Yojana launched?
The PM-KUSUM Scheme was launched on March 8, 2019 by the Ministry of New and Renewable Energy (MNRE). The current phase has been extended until March 2026.
What is the PM-KUSUM scheme 2026?
In 2026, the PM-KUSUM Scheme targets 34,800 MW of solar capacity with ₹34,422 crore in central support. It has already helped over 21.77 lakh farmers switch to solar energy.