The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan — universally shortened to PM-KUSUM Yojana — is India’s most ambitious rural solar scheme. It targets 34.8 GW of decentralized solar capacity deployed directly at the farm gate, replacing diesel pumps, reducing DISCOM subsidy burdens, and putting recurring income into farmers’ hands. For EPCs and solar developers, PM-KUSUM represents a sustained pipeline of small-to-mid-scale projects backed by MNRE central financial assistance (CFA) and state co-funding.
Direct answer. PM-KUSUM Yojana is a Government of India scheme under MNRE that deploys solar energy in the agricultural sector through three components: Component A (10 GW of 0.5–2 MW grid-connected decentralized solar plants on farm/barren land), Component B (14 lakh standalone solar pumps for off-grid farmers), and Component C (solarization of 35 lakh grid-connected agricultural pumps including feeder-level solarization). Farmers receive 30–50% CFA; states add another 30%. EPCs execute the installations under state implementing agency (SIA) contracts.
If you are an Indian EPC or solar developer evaluating the rural solar market, understanding how PM-KUSUM’s three components are funded, structured, and tendered is the first step to winning projects in this space. This article walks through every component in detail — eligibility, cost-sharing, application process, and engineering considerations.
What PM-KUSUM Yojana Is Designed to Solve
India’s agricultural sector runs on approximately 22 million pump sets, of which a large fraction still depends on diesel or unreliable grid supply. The MNRE estimates that farm-sector diesel consumption for irrigation alone exceeds 1.5 billion litres per year — a direct cost to farmers and an indirect cost to the environment.
On the grid side, subsidized agricultural power is a significant financial burden on DISCOMs. Many state DISCOMs supply power to farm feeders at a heavily subsidized tariff, sometimes as low as ₹0 to ₹1/kWh, while procuring power at ₹4–7/kWh. The accumulated DISCOM subsidy deficit runs into tens of thousands of crores annually.
PM-KUSUM addresses both problems simultaneously by:
- Replacing diesel irrigation pumps with solar-powered equivalents (Components B and C).
- Monetizing surplus solar generation by feeding it back to DISCOMs at a state-approved feed-in tariff (Component A).
- Giving farmers a route to earn lease income when third-party developers install plants on their land (Component A again).
Definition. Central Financial Assistance (CFA) under PM-KUSUM is a direct grant from MNRE — not a loan. It is disbursed to the state implementing agency (SIA), which then channels it to reduce the upfront cost borne by the farmer or the EPC on behalf of the farmer.
The scheme was originally launched in 2019 and has been revised and extended multiple times. The current operational guidelines, available on the MNRE PM-KUSUM portal, should be consulted for the latest state-wise allocation and tender status.
The Three Components of PM-KUSUM: A Structural Overview
PM-KUSUM operates through three distinct components, each targeting a different segment of the agricultural power problem. The capacity targets and CFA structures differ significantly across components, so EPCs must understand which component a given tender falls under before pricing a bid.
| Component | Target Capacity | Who Benefits | CFA (General) | CFA (Special Areas) |
|---|---|---|---|---|
| A — Decentralized Grid Solar | 10 GW | Farmers, cooperatives, FPOs, DISCOMs | 30% of benchmark/tender cost | 50% of benchmark/tender cost |
| B — Standalone Solar Pumps | 14 lakh pumps | Off-grid farmers, diesel pump users | 30% of benchmark/tender cost | 50% of benchmark/tender cost |
| C-IPS — Grid Pump Solarization | 35 lakh pumps | Farmers with grid-connected pumps | 30% of benchmark/tender cost | 50% of benchmark/tender cost |
| C-FLS — Feeder Level Solarization | Entire feeders | DISCOMs and state governments | Up to ₹1.05 Cr/MW (general) | Up to ₹1.75 Cr/MW (special areas) |
Special areas include North-Eastern states, Ladakh, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Lakshadweep, and Andaman & Nicobar Islands.
Field tip. When bidding on Component A tenders, confirm whether the state SERC has notified the applicable feed-in tariff (FiT). Some states have delayed FiT notification, which creates off-take risk for the developer. Always obtain a copy of the SERC order before committing to project timelines in your bid.
Component A: Decentralized Grid-Connected Solar Plants
Component A is the most commercially interesting component for EPCs and solar developers. It enables the installation of 500 kW to 2 MW solar power plants on barren, fallow, marshy, pasture, or cultivable land near 33/11 kV sub-stations. The power generated is sold directly to the local DISCOM under a Power Purchase Agreement (PPA) at the feed-in tariff notified by the State Electricity Regulatory Commission (SERC).
Who Can Set Up a Component A Plant?
Eligible entities include individual farmers, farmer cooperatives, panchayats, Farmer Producer Organisations (FPOs), water user associations, and private developers working in partnership with landowners. DISCOMs can also act as Solar Power Generators (SPGs) directly.
When a farmer or cooperative cannot arrange equity capital, two options exist: (a) the farmer works with a private developer who funds, installs, and operates the plant, paying the farmer lease rent; or (b) the local DISCOM steps in as SPG under a state-owned CAPEX model.
Component A Financial Structure
The DISCOM receives a Performance-Based Incentive (PBI) of ₹0.40 per unit purchased or ₹6.6 lakh per MW installed, whichever is lower, for five years from the commissioning date. This PBI effectively de-risks DISCOM off-take risk and provides an incentive for DISCOMs to announce sub-station-wise capacity and invite developer applications promptly.
Landowners under the developer-SPG model earn lease rent at mutually agreed terms. The typical market rate is ₹10,000–30,000 per acre per year depending on the state and proximity to a sub-station.
Component A Application and Disbursement Process
- DISCOMs announce sub-station capacity — each DISCOM publishes available MW headroom near each 33/11 kV sub-station.
- Developers or farmers apply with project proposals to the state SIA or DISCOM.
- SERC-approved FiT is confirmed in the PPA before any commitment.
- Plant is commissioned within the permitted timeline — project completion is typically required within 18–24 months of agreement signing.
- PBI claims are submitted annually by the implementing agency to MNRE, along with the Joint Metering Report and lease rent receipts if applicable.
Watch out. Component A plants must be located within a specified radius of an existing sub-station — typically 5 km. Plants located outside this radius face higher evacuation costs that can erode project IRR significantly. Always verify sub-station proximity before acquiring land or signing lease agreements.
For detailed Component A mechanics, read our dedicated post on PM-KUSUM Component A.
Component B: Standalone Solar Agricultural Pumps
Component B targets off-grid areas where no reliable electricity supply exists. The scheme replaces diesel or kerosene pumps with solar-powered pump sets ranging from small 0.5 HP units to 7.5 HP pumps (and up to 15 HP in special areas). This component is critical for approximately 5–7 million farmers who currently depend on diesel for irrigation and bear fuel costs of ₹40–80 per hour of pump operation.
Component B Eligibility
- Individual farmers using diesel or kerosene pumps in off-grid areas.
- Small and marginal farmers are given priority during allocation.
- Farmers already enrolled in micro-irrigation schemes (drip or sprinkler) receive additional priority in several states.
- The solar pump capacity in kW cannot exceed the pump capacity in HP on a 1:1 basis (a 3 HP pump may have at most 3 kW of solar).
Component B Cost Sharing
| Funding Source | General Areas | Special Areas |
|---|---|---|
| Central Financial Assistance (CFA) | 30% of benchmark/tender cost | 50% of benchmark/tender cost |
| State Government Subsidy | Minimum 30% | Minimum 30% |
| Farmer Contribution | Up to 40% | Up to 20% |
| Farmer Loan Option | Farmer can reduce cash outflow to 10% | Farmer can reduce cash outflow to 10% |
Pump capacities above 7.5 HP are permitted but CFA remains capped at the rate applicable to 7.5 HP. If state subsidy is unavailable, farmers may proceed with only central CFA and bear 70% of the remaining cost via bank loans.
Component B Application Process
The application process runs through the state implementing agency, which is typically the state Agricultural Department, Minor Irrigation Department, or a nodal agency like KREDL (Karnataka), HAREDA (Haryana), or UPNEDA (UP).
Apply through State SIA or portal
Submit form at the designated state SIA with Aadhaar, proof of farmer status, land records, and pump ownership documents. Applications are available on state portals or at the MNRE PM-KUSUM national portal.
Document verification and approval
SIA verifies documents, checks eligibility, and publishes the approved beneficiary list on the state portal. MNRE allocates pump targets state-wise; states then allocate to districts.
Vendor assignment and installation
Approved farmers are assigned a MNRE-empanelled vendor. The vendor handles design, supply, installation, and commissioning. A mandatory 5-year Annual Maintenance Contract (AMC) is included in the package.
Subsidy disbursement
Subsidy is transferred directly to the empanelled vendor, reducing upfront cost to the farmer. Funds are released in two tranches: 30% advance after work order issuance and 70% after commissioning and verification.
Component C: Individual Pump Solarization (C-IPS)
Component C-IPS targets farmers who already have grid-connected agricultural pumps and want to add a solar PV system. Unlike Component B, which serves off-grid areas, C-IPS operates on the grid and allows farmers to both meet their own irrigation demand from solar and sell surplus energy back to the DISCOM.
C-IPS Technical Specifications
- Solar PV capacity of up to 2 times the pump capacity (in kW) is eligible for CFA when the pump is up to 7.5 HP.
- For special area states, the pump ceiling extends to 15 HP.
- In the “solar + grid” mode, net metering ensures that any surplus generation above irrigation demand is exported to the grid and credited against the farmer’s electricity bill or purchased at the approved tariff.
- Vendors must provide a 5-year AMC covering remote monitoring, periodic inspections, and component replacements under warranty.
The cost-sharing structure for C-IPS mirrors Component B: 30% CFA (central), at least 30% state subsidy, and up to 40% farmer contribution — reducible to 10% through bank loans in most states.
For a deeper look at C-IPS and the parallel feeder-level solarization model, read our dedicated post on PM-KUSUM Components B and C-IPS.
Component C: Feeder Level Solarization (C-FLS)
While C-IPS solarizes individual pump connections, C-FLS solarizes entire agricultural feeders — the distribution lines that collectively serve multiple pump connections in a block or tehsil. This is structurally different because the beneficiary is not the individual farmer but the DISCOM or the state government.
C-FLS Structure
Two implementation models operate under C-FLS:
CAPEX Mode: The state government or DISCOM directly funds and owns the solar plant. CFA is released in two tranches — up to 40% after tendering and signing contractor agreements, and the remaining 60% after successful commissioning.
RESCO Mode: A third-party developer finances, installs, and operates the solar plant for 25 years and sells power to the DISCOM under a PPA. No advance CFA is released. The full CFA — up to 100% of the eligible amount — is released to the RESCO developer through the DISCOM only after the Commercial Operation Date (COD) is declared.
| Feature | CAPEX Mode | RESCO Mode |
|---|---|---|
| Who owns the plant | State / DISCOM | Private RESCO developer |
| CFA advance available | Yes — up to 40% | No — 100% on COD |
| Capital risk | Government | Developer |
| O&M responsibility | Government / DISCOM | Developer for 25 years |
| Power tariff to farmer | Free or subsidized | Subsidized through DISCOM |
| Best for | States with budget availability | States preferring private capital |
The CFA ceiling under C-FLS is ₹1.05 Cr/MW for general states and ₹1.75 Cr/MW for special areas. If the feeder has not yet been separated from the general distribution network, states may take loans from NABARD, PFC, or REC to finance feeder separation before solarization.
Note. Feeder separation is a prerequisite for C-FLS in most states. Without a separated agricultural feeder, DISCOM operators cannot isolate pump load and track solar generation vs. consumption accurately. Check the state's feeder separation progress before committing to a C-FLS project timeline.
The PM-KUSUM Project Lifecycle Framework
EPCs bidding on PM-KUSUM tenders should plan their project development around what we call the KUSUM 5-Gate Delivery Framework — a sequence of five approval and execution gates that every component follows, though the specifics differ.
State Allocation Gate
MNRE announces state-wise capacity targets. The state SIA/nodal agency publishes tender documents and timelines. No CFA flows until MNRE formal allocation is confirmed in writing.
Application and Vetting Gate
Farmers or developers submit applications. SIAs conduct document verification, GPS mapping, and load surveys. For Component A, a site feasibility check against sub-station capacity headroom is mandatory.
Tendering and Agreement Gate
SIA calls for bids from empanelled vendors (B/C-IPS) or runs open tenders (A/C-FLS). PPA/contract is signed. First CFA tranche is triggered for CAPEX mode projects.
Installation and Commissioning Gate
Project must be commissioned within 24 months of agreement signing (extensions require valid justification and SIA approval). COD is declared after successful commissioning testing and metering verification.
Post-COD Reporting Gate
Annual PBI claims (Component A) or AMC performance reports (B/C) are submitted. Remaining CFA tranches are released. Continuous monitoring via SCADA or remote IoT sensor is required in most state contracts.
Engineering Considerations for PM-KUSUM Projects
PM-KUSUM projects look simple on paper — small scale, rural sites — but they carry specific engineering challenges that catch EPCs off-guard.
Sub-station proximity and evacuation design: Component A plants must be connected to the nearest 33/11 kV sub-station. The evacuation line design, protection relay settings, and DISCOM-approved interconnection drawings are mandatory deliverables. According to CEA Connectivity Regulations 2019, even plants below 1 MW must comply with minimum protection requirements before grid connection is permitted.
Module selection and DCR compliance: All solar PV modules used in PM-KUSUM projects must comply with the Domestic Content Requirement (DCR) where mandated by the state tender. DCR modules must appear on the MNRE Approved List of Models and Manufacturers (ALMM). Non-compliant modules will invalidate CFA claims.
Pump system integration (B and C-IPS): Solar pump systems require proper hydraulic design matching the pump head-flow curve to the solar array output. A mismatch between solar PV capacity and pump HP rating leads to either under-pumping (lost irrigation hours) or controller-driven curtailment. The system integrator must provide a commissioning test report comparing actual vs. design flow rates.
Structural and wind load design: Rural Gujarat and Rajasthan sites face wind zone III and IV conditions as defined in IS 875 Part 3. Component A plant structures must have STAAD Pro or equivalent structural analysis reports confirming that mounting structures can withstand the 50-year return period wind load. DISCOM sub-station officials increasingly check structural reports before approving grid connection.
Field tip. On Component A projects, always obtain a sub-station load flow study from the DISCOM before finalizing plant capacity. DISCOMs routinely overbook sub-station capacity, and your 2 MW plant may be approved in principle but then curtailed to 1.5 MW at the metering stage — cutting your revenue projections with no recourse unless this was documented at agreement signing.
State-Wise PM-KUSUM Progress and Opportunities
According to Mercom India’s 2025 PM-KUSUM tracker, states like Rajasthan, Madhya Pradesh, Maharashtra, and Karnataka lead in Component B and C-IPS installations, while Component A progress has been slower due to SERC FiT notification delays and DISCOM sub-station headroom constraints.
The current national status highlights opportunities:
10 GW
Component A target capacity
MNRE PM-KUSUM Guidelines, 2023
14 lakh
Standalone pump target (Comp. B)
MNRE PM-KUSUM Guidelines, 2023
35 lakh
Grid pump solarization target (Comp. C)
MNRE PM-KUSUM Guidelines, 2023
₹34,035 Cr
Total outlay approved
MNRE PM-KUSUM Guidelines, 2023
How Heaven Designs Helps EPCs Win PM-KUSUM Projects
PM-KUSUM tenders require more than procurement skills. They require bankable engineering documentation — GA drawings, SLDs, structural calculations, and DISCOM-approved formats — delivered fast enough to meet tender submission deadlines. That is exactly where most EPCs hit a bottleneck: their in-house designers are either fully loaded with existing projects or lack experience with rural DISCOM interconnection requirements.
Heaven Designs has supported EPCs across Rajasthan, Gujarat, Maharashtra, and Karnataka on Component A grid-connected plant documentation and Component C-IPS system design. Our team delivers:
- Solar Rooftop and Ground Mount Detailed Engineering Design — Complete IFC pack including GA layout, SLD, single-line diagram, structural BOQ, and DISCOM-format drawings.
- Electrical CEIG Drawings — CEIG-approval-ready electrical drawings required for grid interconnection under CEA Connectivity Regulations 2019.
- Solar Ground Mount Design — Utility and semi-utility scale layouts optimized for the available sub-station capacity and SERC-notified FiT economics.
- STAAD Pro Structural Reports — Mounting structure calculations that satisfy DISCOM and state agency technical review requirements.
- Download a sample deliverable — Redacted IFC pack from a completed Component A project.
Contact us for a project quote and our team will respond within 24 hours with a scope and timeline estimate.
Need DISCOM-ready drawings for your next PM-KUSUM bid?
Download a redacted sample IFC pack from a completed Component A project. Includes GA layout, SLD, structural BOQ, and CEIG drawing format checklist.
Get the sample pack →FAQ
What is the difference between PM-KUSUM Component A and Component C?
Component A installs new solar power plants (0.5–2 MW) on barren or agricultural land to sell power to the DISCOM grid. Component C solarizes existing pump connections — either individual (C-IPS) or at the feeder level (C-FLS) — primarily to meet on-farm irrigation demand. Component A is primarily a revenue-generation model for landowners and developers, while Component C is a cost-reduction model for farmers and DISCOMs.
How much CFA does a farmer get under PM-KUSUM?
For most states, the farmer receives 30% CFA from the central government (MNRE) plus a minimum 30% subsidy from the state government. The remaining 40% is the farmer’s contribution, but this can be reduced to 10% through bank loans arranged via NABARD, SBI, or cooperative banks. In special areas (North-Eastern states, Ladakh, Himachal Pradesh, Uttarakhand, Lakshadweep, Andaman & Nicobar Islands), CFA rises to 50%, reducing the effective farmer share further.
Can a private developer set up a Component A plant on a farmer’s land?
Yes. A private developer can lease a farmer’s land, install a solar power plant of 500 kW to 2 MW, and sell power to the local DISCOM at the SERC-notified FiT. The farmer earns lease rent at mutually agreed rates. The developer gets no direct CFA in this arrangement; instead, the DISCOM receives the PBI of ₹0.40/unit or ₹6.6 lakh/MW (whichever is lower) for five years after commissioning.
What solar pump capacities are eligible for CFA under Component B?
CFA is available for pump capacities up to 7.5 HP in general states. In special area states, CFA extends to 15 HP. Pumps above 7.5 HP are allowed but the CFA is calculated at the 7.5 HP benchmark rate regardless of actual pump size. The solar PV capacity is capped at 1 kW per 1 HP of pump rating — a 3 HP pump may not have a larger than 3 kW solar array.
What documents does a farmer need to apply for PM-KUSUM?
Required documents include: Aadhaar card for identity verification, land ownership or possession records (Khasra/Khatauni), proof of existing pump ownership or connection (electricity bill or pump registration), bank account details for subsidy credit, and a recent passport-size photograph. For C-IPS, the existing grid connection number and pump HP rating are also required to enable the SIA’s load survey.
How long does a PM-KUSUM project take from application to commissioning?
For Component B and C-IPS projects, the timeline from SIA approval to commissioning is typically 4–8 months depending on vendor workload and component availability. For Component A projects, the developer must commission within 24 months of agreement signing; the typical realistic timeline including SERC FiT confirmation, land lease finalization, and DISCOM interconnection approval is 12–18 months. Extensions are permitted with valid justification submitted to the SIA before the deadline.
Are modules in PM-KUSUM projects required to meet DCR / ALMM requirements?
Yes. Any PM-KUSUM project that draws central CFA must use solar PV modules listed on the MNRE ALMM (Approved List of Models and Manufacturers). Using non-ALMM modules disqualifies the project from CFA disbursement. State tender documents may specify additional requirements such as BIS IS 14286 or IEC 61730 certifications. Always check the specific tender document rather than assuming generic module standards apply.
What is feeder separation and why is it needed for PM-KUSUM Component C-FLS?
Feeder separation means creating a dedicated distribution feeder that supplies power only to agricultural pump connections, separate from domestic and commercial consumers on the general distribution network. Without a separated feeder, the DISCOM cannot install a bidirectional meter to accurately track solar generation, and grid operators cannot isolate agricultural load during solar generation periods. States that have not completed feeder separation must use NABARD, PFC, or REC financing to fund the separation work before applying for C-FLS CFA.
