Recently, the Ministry of New and Renewable Energy notified that timeline of the PM KUSUM scheme has been extended till March 31, 2027, as the set targets have not been achieved. PM KUSUM, a flagship scheme of the government, is intended to de-dieselise agriculture through micro-irrigation and transform the farmer into a prosumer (producer + consumer) through generation of decentralised solar power.
As India receives sunlight 250-300 days in a year, the agriculture sector is in a sweet spot to generate power for (micro) irrigation and agrivoltaic farming — growing crops between or underneath solar panels to improve the efficiency of the land apart from reducing the dependence on water. According to one study, India can electrify the entire country by tapping just one tenth of the sunshine in the Thar desert, wherein the plant load factor will be the optimum (19 per cent and above) due to high solar irradiance.
By extending the Production Linked Incentive scheme and reducing the goods and services tax from 12 per cent to 5 per cent, the government has been promoting domestic manufacture of solar panels/photovoltaic cells.
Policy suggestions
Component B of KUSUM (replacing diesel pumps with off-grid solar ones) has been relatively popular probably due to: a) higher subsidy amount provided for establishing off-grid solar pumps; b) delay in development of transmission grids; and c) reluctance of discoms to sign long-term power purchase agreements on account of their financial distress, declining tariffs, and demand-supply mismatches during peak hours. Although the Centre earmarked ₹34,422 crore under the scheme, most of the funds have not been released due to reluctance of banks in granting loans for lack of collateral security. So, the following measures may help farmers achieve energy security:
By establishing mandatory escrow accounts with banks, revenue from sale of additional solar power may lower the risk of loan defaults.
Farmers and discoms may be incentivised through monetisation of carbon credits to enhance financial viability of the projects.
By deploying real-time dual axis solar tracking and bi-facial module technologies, maximum sunlight may be captured; besides, maintenance of the solar panels may be undertaken through robotics to improve efficiency.
And, excessive solar power may be tapped to generate round-the-clock power supply by recharging batteries for electric vehicles in the context of fuel shortage triggered by the Iran war.
Srikanth is Director, MANAGE, Hyderabad, and Venkatesha is the DMD of NaBFID, Mumbai; Views are personal. With inputs from M Bhanusri and Shanmukh Raju
Published on May 11, 2026