PM KUSUM Component C Scheme: Feeder Solarisation, 30% CFA

The Kusum C scheme, formally PM-KUSUM Component C feeder-level solarization (FLS), lets farmers or landowners lease land for solar plants that supply an agricultural feeder. Developers get sites and a 25-year PPA; farmers get a predetermined lease rent. This guide is for farmers, landowners and developers, and covers the process for each.

Quick answer. PM-KUSUM Component C solarises agricultural pumps or whole agricultural feeders. Under feeder level solarisation, the state DISCOM or agency runs CAPEX or RESCO projects with central financial assistance of 30% of ₹3.5 crore/MW (50% in special-category states), sized at a minimum 19% annual CUF. Developers win sites by tariff bidding and sign 25-year PPAs.

Application Process for Farmers or Landowners

• Register on the State Implementing Agency Portal: Farmers or landowners must register their land on the designated state agency portal (find yours on the national PM-KUSUM portal).

• Log In and Select a Substation: Log in to the portal and select a nearby 33/11 kV substation suitable for the solar power plant.

• Upload Land Documents: Upload the necessary land ownership documents to the portal for verification.

• Pay Registration Fees: A registration fee of ₹1,000 + 18% GST (may vary by state) is required.

• Land Credential Verification: The applicant’s land credentials will undergo verification by the State Implementing Agency.

• Joint Survey: A joint survey will be conducted by DISCOM officials along with the landowner to assess:

• Land Feasibility: Suitability of the land for a solar power plant.

• Transmission Line Feasibility: Evaluation of the land’s connectivity to nearby substations, governed by the same CEA connectivity regulations that apply to grid-connected solar developers generally.

• Registration Completion: Once feasibility is confirmed, the land is registered and made visible to developers on the portal, ready for lease or self-development.

Application Process for Developers

• Register on the Portal: Developers must register on the portal by paying a registration fee of ₹5,000 + 18% GST.
• Search for Suitable Substations: After registration, developers can search for a suitable 33/11 kV substation from the portal’s list.
• Select Landowner: Developers can view the registered landowner’s details, including feasibility status, and select the desired land.
• Obtain Contact Details: Contact details of the selected landowner will be provided through the portal.
• Participate in the Tender Process: Developers must participate in the RESCO developer selection tender.
• Submit Land Lease Agreement: Finalize and submit the land lease agreement as part of the tender process.

Additional Information

1. Farmers as Developers: Farmers or landowners can develop solar power plants independently if they have the financial resources and technical expertise. This lets farmers participate directly in renewable energy generation and benefit from the associated revenue streams. Farmers who choose this route still need an experienced EPC partner to handle installation and commissioning; see Heaven Green Energy’s solar EPC services for what that scope typically covers.
2. Capacity Limitation: There is no MW cap on an FLS plant, but CFA is calculated on the capacity needed for the feeder’s agricultural load, with pumps above 7.5 HP counted at 7.5 HP.
3. Land Requirements: State portals commonly require a minimum of 5 acres of contiguous land per parcel.

Lease Rates and Simplified Land Lease Agreements

Lease rates are set by each state. Maharashtra’s feeder solarization programme, for example, offers up to ₹50,000 per acre per year or 6% of the ready reckoner rate, with an annual 3% increment. Check your state agency’s current terms.

To simplify the leasing process, the nodal agency (DISCOM or SPV) may act as a single entity to handle land lease agreements with all landowners. This eliminates the need for individual landowners to interact directly with Solar Power Developers (SPD), reducing uncertainties about timely lease payments.

Key Features of the Simplified Process:

1. The Nodal Agency will sign agreements with individual landowners, consolidating the leasing process.
2. A tripartite agreement will be established among the DISCOM, Nodal Agency, and SPD to ensure clear roles and responsibilities.
3. Lease rent payments will be transferred to the Nodal Agency, which will then distribute them to the landowners, ensuring timely and reliable payments.
4. The Nodal Agency will collaborate with the District Collector or District Magistrate to identify land requirements and connect with farmers willing to lease their land for solar power projects.

This structured approach simplifies the process for landowners and promotes trust and fairness, making it easier to implement large-scale solar projects. Some states run complementary schemes alongside Component C; for example, Gujarat’s DREBP framework, covered in Heaven Green Energy’s guide to DREBP and PM-KUSUM, follows a similar lease-and-solarize model.

Benefits of the PM-KUSUM Component-C Feeder Level Solarization Scheme

For Farmers

1. Access to Daytime Solar Power: Farmers can access reliable solar power during the day, ensuring uninterrupted energy for agricultural activities.
2. Additional Income: Farmers can earn lease rent by leasing their land for solar power projects, creating a stable source of supplementary income.

For DISCOMs

1. Cost-Effective Solar Power: The availability of affordable solar power at the distribution level helps reduce power purchase costs and Aggregate Technical and Commercial (AT&C) losses.
2. Flexibility in Plant Capacity: Unlike Component A, which caps plants at 2 MW, FLS has no MW cap, so plants can be sized to the feeder.
3. Reduced Transmission Infrastructure Costs: Localized solar power generation minimizes the need for extensive transmission infrastructure, leading to cost savings.
4. Improved Renewable Purchase Obligation (RPO) Compliance: Solar purchased under FLS counts toward the DISCOM’s RPO.

For the Government

1. No Mandatory State Share: FLS guidelines do not require a state financial contribution, which reduces the fiscal burden.
2. Lower Tariff Subsidy Burden: Cheaper daytime solar can reduce the subsidy burden of agricultural power tariffs.
3. Support for Renewable Energy Targets: FLS capacity counts toward state distributed-generation and renewable targets.
4. Daytime Solar Power for Agriculture: Farmers get daytime supply from clean power.

How Does the PM KUSUM Component C Bidding Process Work?

Type of Bidding:

• Single Stage, Two-Part Bidding (Technical and Financial proposals).
• Tariff-Based Competitive Bidding for selection of bidders.

Eligibility of Bidding Entities

• Individual companies registered in India.
• Joint Ventures (JV) of up to two members, with one designated as the Lead Member.
• Eligible participants include proprietors.
• Partnerships or Limited Liability Partnerships (LLPs).
• Farmers or landowners.
• Groups of farmers, cooperatives, panchayats, or Farmer Producer Organisations (FPOs).

The bidding details below follow typical state RfS documents; check the current tender for your state.

Additional Requirements

1. Essential Documents:

• Permanent Account Number (PAN) card.
• GST Registration (to be obtained within one month of receiving the work order).

2. Mandatory Undertakings:

• Non-blacklisting or non-debarment undertaking (required for both members in case of JV).
• No conflict-of-interest undertaking.

3. Authorization:

• Valid power of attorney for authorized signatory.
• Undertaking for landowners or farmers, if applicable.

4. Acceptance of Terms:

• Token of acceptance for the Request for Selection (RfS) document.

Selection Criteria

1. Tariff-Based Selection:

• The bidder offering the lowest (L1) levelized tariff for each solar power plant will be selected.
• In case two or more bidders quote the same tariff, a lottery system will be used to determine the selected bidder.

2. Bid Security and Performance Bank Guarantee (PBG):

• Bid Security: ₹1 lakh per MW of capacity.
• PBG: ₹5 lakhs per MW of capacity

Technical Requirements

1. For Landowners/Farmers/Individuals (Sole Bidders with Required Land): An undertaking on non-judicial stamp paper of ₹500 confirming:

• Ownership of clear title land of adequate size corresponding to the required capacity of the solar power plant.
• Ownership of assets (movable and immovable) amounting to at least 20% of the total project cost, where the total cost is calculated at ₹3.5 Crores per MW of quoted capacity.

2. For Firms or Other Entities: An undertaking on non-judicial stamp paper of ₹500 ensuring:

• Access to clear title land of adequate size suitable for the proposed solar power plant.
• Commitment to the availability of all technical prerequisites for project implementation.

Financial Requirements

1. For Landowners/Farmers/Individuals (Sole Bidders with Required Land): An undertaking on non-judicial stamp paper of ₹500 confirming:

• Ownership of assets (movable and immovable) amounting to at least 20% of the total project cost. The total cost is calculated at ₹3.5 Crores per MW of quoted capacity.
• Access to adequate financial tie-ups (e.g., lending institutions or banks) to meet the financial requirements for setting up the quoted capacity.

2. For Firms or Other Entities:

• A Minimum Annual Average Turnover (MAAT) equivalent to 30% of the total project cost, calculated at ₹3.5 Crores per MW of quoted capacity over the last three financial years.

Important Note:

MNRE’s FLS guidelines calculate the plant capacity eligible for CFA using a minimum annual Capacity Utilization Factor (CUF) of 19%, and estimate installation cost at ₹3.5 crore/MW for the CFA calculation. In RESCO mode, CFA is released against a bank guarantee that is returned in stages over the first ten years of operation, so sustained performance matters.

Maintaining CUF of 19% or more over the 25-year life of the plant is also what protects return on investment. Four activities decide it:

1. Site Assessment (Pre-Execution)
2. Design Optimization (Pre-Execution)
3. Regular Maintenance (Post-Execution)
4. Performance Monitoring (Post-Execution)

At Heaven Designs, we focus on Site Assessment and Design Optimization, the two Pre-Execution activities that set up long-term performance.

Pre-Execution Stage

1. Site Assessment

I) Solar Irradiance Measurement

Tools like pyranometers or satellite data are used to measure global horizontal irradiance (GHI), direct normal irradiance (DNI), and diffuse horizontal irradiance (DHI). Analysing historical solar data lets us estimate the site’s energy production accurately; our India GHI, DNI and DHI guide compares the data sources.

II) Land Assessment

When planning a solar power plant, make sure you have enough land: typically 4-5 acres per MW for ground-mounted systems. The land’s features matter as well as its size. Checking slopes and elevations helps avoid costly leveling work, and soil tests ensure the foundations are strong and durable. Identifying shadow-casting obstructions, like trees, buildings, poles, etc., helps build shadow-free plants.

Complete the project within the given time frame to avoid penalties. To speed up land assessment, we recommend drone surveys.

Drone surveys of small sites can be completed in under an hour, depending on size and complexity. High-resolution images captured by drones provide precise details, enabling the creation of ultra-detailed 3D models. Exporting the 3D models directly into CAD formats such as DXF also shortens layout work.

III) Climatic and Weather Assessment

When you’re signing a Power Purchase Agreement (PPA) for 25 years, the stability of your solar power plant becomes a top priority. The plant should be prepared for heavy rainfall, snowfall and flood risk.

At Heaven Designs, we handle the key aspects of climate assessment. We analyse temperature variations to address efficiency losses, assess wind speeds to design adequate structures, and study rainfall and snowfall patterns to create effective drainage systems and cleaning plans. Additionally, we evaluate flood risks to protect ground-mounted systems. The aim is a plant designed for the site’s real conditions.

Advanced Wind Analysis

The data gathered during site assessment then feeds design optimization.

2. Design Optimization

I) Pre-Design Stage

The Pre-Design stage uses data from the Site Assessment to create foundational layouts and validate the feasibility of the solar power plant.

1. Data Utilization for String Design: The temperature data collected during the Site Assessment is essential for designing solar PV strings. PV module strings are designed to account for temperature variations using the module’s temperature coefficient. This keeps string voltages within the inverter’s Maximum Power Point Tracking (MPPT) window across the site’s temperature range.
2. General Arrangement (GA) Layout: The General Arrangement (GA) layout, created using AutoCAD, is like the blueprint for the solar power plant. It helps us map out the plant while keeping the design shadow-free and maintaining the right pitch distance and inter-row spacing. This ensures the solar modules are arranged optimally to capture the most sunlight and make the best use of the available space.
3. Preliminary 3D Design in SketchUp: At the same time, we create a 3D design in SketchUp to show stakeholders how the plant will look. The model is not just for visuals: it is the basis in generating a tentative PVsyst report. The report provides valuable insights into the plant’s energy generation potential and checks if the design is feasible for the location. Plus, it helps us decide whether a fixed tilt, seasonal tilt, or tracker system would work best for the site. This way, we can choose the most efficient option for the plant’s specific needs.

II) Post-Design Stage

The post-design stage turns the initial plans into a finalized design ready for execution. Here is how we make sure your solar power plant is both structurally sound and operationally efficient:

1. Mounting Structure System (MMS): Once we have the Soil Bearing Capacity (SBC) reports, we can determine the most suitable foundation type for the site. We decide whether to use helical piles, earth-screws, ballasted foundations, or driven piles, depending on the soil conditions. Our pile foundation design guide explains how soil data drives that choice. Additionally, we calculate the optimal tilt angle to maximize sunlight capture and energy production.
2. Structural Feasibility Analysis: We analyse the finalized layout in STAAD Pro to check structural integrity. This step verifies the plant’s ability to withstand environmental challenges like wind loads, seismic activity, and other site-specific factors. Together with a foundation chosen from the SBC report, this check is what stops a plant becoming a “flying kite” in high winds over its 25-year life.

1. Detailed Electrical Design: The final step involves creating Single Line Diagrams (SLDs), optimizing cable sizing, and configuring protection systems and inverter placement. The aim is low energy losses and safe operation. Our electrical design covers:

• AC/DC Cable Sizing: Calculating the appropriate cable sizes to handle the expected current while minimizing losses and ensuring safety.

• DC/AC Voltage Drop Calculation: Ensuring voltage drops are kept within permissible limits to maintain system efficiency.
• Cable Layout Using Optimized Methods: Strategically designing cable routes to minimize lengths and costs while maximizing performance.
• Cable Trench Layout: Planning and designing cable trenches for safe and efficient cable installation.
• Single Line Diagram (SLD): Developing clear, detailed diagrams to outline electrical connections and system flow.

• Earthing and Lightning Arrestor Layout: Designing a reliable earthing system and lightning protection layout to safeguard the plant and personnel from electrical hazards.
• HT Side and LT Side Designing: Creating detailed designs for both High Tension (HT) and Low Tension (LT) sides for reliable power evacuation.

Post-Execution Stage

After installing and commissioning a solar power plant, Heaven Designs recommends focusing on these two key aspects: Regular Maintenance and Performance Monitoring.

I) Regular Maintenance

• Cleaning of Solar Panels: Solar module cleaning at least twice a month is recommended for solar power plants for good output.
• Inspection of Components: Routine checks of inverters, cables, mounting structures, and junction boxes to identify and resolve any wear or damage.
• Preventive Maintenance: Proactive measures like tightening electrical connections, checking for corrosion, and ensuring proper functioning of protection systems like earthing and lightning arrestors.

II) Performance Monitoring

• Real-Time Data Monitoring: Using advanced monitoring systems to track energy generation, module temperatures, and inverter performance.
• Analysis of Key Performance Indicators (KPIs): Evaluating metrics like CUF, PR (Performance Ratio), and downtime to measure the plant’s operational efficiency.
• Alerts and Fault Detection: Automated alerts for issues like string failures, inverter faults, or unusual energy drops to ensure immediate resolution.

Frequently Asked Questions (FAQs)

Is there any subsidy or loan available if I want to install a power plant?

Yes. CFA of 30% of the estimated cost (₹3.5 crore/MW, so up to ₹1.05 crore/MW) is available for eligible FLS capacity, rising to 50% in special-category states. Some states also arrange escrow or payment-security mechanisms that help developers raise loans.

Who will bear the cost of the transmission line?

In most state tenders the plant developer bears the cost of the line to the substation. Check the RfS for your state.

What happens if my project’s capacity does not match the requirement of the grid substation (GSS)?

This is handled under the state’s tender rules. Some states allow the DISCOM to split or adjust substation capacity and set a minimum plant size (often around 1 MW); check the RfS.

Are the unit purchase rates fixed for 25 years? What about inflation?

Yes. The tariff is a levelized rate fixed for 25 years, so it already prices in expected inflation. Discovered tariffs vary by state and tender round.

What is the RESCO model of implementation for feeder-level solarization?

The RESCO model is the model where a Renewable Energy Service Company (RESCO) or a developer will set up the solar plant for feeder-level solarization and sign a PPA with the DISCOM for supplying the solar power to DISCOM for 25 years at a fixed tariff discovered through a competitive bidding process.

What is the minimum and maximum plant capacity permitted under PM-KUSUM Component C?

There is no formally specified upper MW cap for an individual solar power plant under Component C, but the plant capacity must be sized to match the energy requirement of the agricultural feeder it serves, typically calculated on the basis of connected 7.5 HP pump loads.

In practice, plant sizes depend on the aggregate pump load on the feeder or substation. Minimum plant size and land parcel (often 5 contiguous acres) are set in state tenders.

How does the 19% CUF rule affect Central Financial Assistance?

MNRE’s FLS guidelines use a minimum annual CUF of 19% to calculate the plant capacity eligible for CFA. CUF is calculated as actual energy generated (kWh) divided by the maximum possible energy generation (plant capacity in kW multiplied by the number of hours in the period).

A CUF of 19% over a full year is equivalent to approximately 1,664 kWh per kWp of installed capacity, a threshold most well-designed ground-mount plants in high-irradiance Indian states can meet. However, maintaining CUF above 19% throughout the 25-year plant life, without deration, requires high-quality design optimization, regular maintenance, and performance monitoring.

Can a farmer participate in Component C without owning the solar plant?

Yes. A farmer or landowner has two distinct participation options under Component C. The first option is to lease the land to a registered RESCO developer, who installs and owns the solar plant, pays the farmer a state-set lease rent, and sells power to the DISCOM under a 25-year PPA. The second option is for the farmer to develop the plant independently, provided they have the technical capability and financial resources, including ownership of assets worth at least 20% of the total project cost, calculated at ₹3.5 Crores per MW. Most farmers participate via the lease model; independent farmer development is less common but legally permitted.

What engineering documents does a developer need to submit at the bid stage for Component C?

A developer bidding for a PM-KUSUM Component C project must prepare and submit a package covering technical and financial eligibility. On the technical side, this includes an undertaking confirming land availability and title, preliminary site assessment data (irradiance, land slope, proximity to the 33/11 kV substation), and a commitment to all technical prerequisites for project implementation.

The financial package includes proof of minimum annual average turnover of 30% of project cost over the last three financial years, or in the case of farmer-owned plants, an undertaking confirming assets worth 20% of project cost.

After bid selection, the developer must produce a full IFC (Issued for Construction) engineering package, including the General Arrangement drawing, Single Line Diagram, structural calculations per IS 875 Part 3 for wind loads, PVsyst yield report, and DISCOM interconnection documentation.

Many of these same elements also feed into the project’s Detailed Project Report; see how to prepare a solar DPR for MNRE submission for a template and checklist. Heaven Designs prepares the complete IFC package for Component C developers through its Solar Ground Mount Design service.

How does the bidding process work, and how is the L1 tariff determined?

PM-KUSUM Component C uses single-stage, two-part competitive bidding: a technical proposal and a financial proposal. Bids are evaluated first on technical compliance, then ranked by the levelized tariff offered. The bidder offering the lowest L1 levelized tariff for each solar power plant is selected. In the event of a tie (two bidders quoting the same tariff), a lottery system determines the winner.

The bid security is ₹1 lakh per MW of quoted capacity, and the Performance Bank Guarantee is ₹5 lakhs per MW. The discovered tariff varies by state and round, and is then fixed for the 25-year PPA.

Developers who engineer plants at the lowest LCOE (through optimized design, efficient procurement and strong O&M planning) are best positioned to submit a sustainable L1 bid.

What happens at the end of the 25-year PPA period?

The PM-KUSUM program guidelines specify a PPA duration of 25 years. At the end of this term, the PPA expires and the arrangement between the developer and the DISCOM must be renegotiated or the plant decommissioned. For farmer-leased land, the land lease agreement typically has a duration matching the PPA, meaning the lease also concludes at 25 years, at which point the land reverts to the farmer.

In practice, many developers are expected to negotiate PPA extensions or repowering agreements with upgraded equipment at the end of the initial term. Farmers who own their plants independently have more flexibility: they can renegotiate directly with the DISCOM or explore open-access arrangements if the regulatory framework permits by that time.

What role does Heaven Designs play in PM-KUSUM Component C project execution?

Heaven Designs provides the pre-execution engineering scope for Component C projects: the two stages that determine long-term CUF compliance and project bankability. The site assessment stage covers solar irradiance measurement and analysis, land feasibility assessment (slope, soil bearing capacity, shadow mapping), and climatic assessment (wind, temperature, rainfall) per IS 875 Part 3.

The design optimization stage covers General Arrangement layout using AutoCAD, preliminary 3D modeling and PVsyst energy yield report, mounting structure selection based on soil test results, structural feasibility analysis using STAAD Pro, and detailed electrical design including Single Line Diagram, cable sizing, and earthing layout.

These deliverables form the technical documentation package used for DISCOM approval, CEIG clearance, and lender acceptance. Contact us to discuss your Component C engineering requirements.