Centre gears up for the launch of PM-KUSUM 2.0 to meet growing demand

Business Standard

9 hours ago

The ministry of new and renewable energy (MNRE) is considering launching phase 2 of the PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) scheme—brought under the Agriculture Infrastructure Fund (AIF) last August—in response to rising demand, a senior official said. It would be implemented in the next financial year, they added.
While the current phase will run till FY26 to add 34.8 gigawatt (GW) of solar capacity, the second phase is likely to match or exceed Phase 1's scale (₹34,000–35,000 crore outlay and installation of 4.9 million pumps), with possible additions like agrovoltaics and minor guideline revisions.
'Allocations have been made for PM Kusum's demand that we have seen a spike in the last one year. We have demands which are now probably 2-3 times of what has been allocated, which we are seeing only in phase two of the programme as and when we get it through for the next financial cycle,' the government official cited above said.
Total demand rose to 4.9 million pumps from the initial target of installing 2 million standalone solar powered agricultural pumps and solarisation of 1.5 million existing grid-connected agricultural pumps. This has been entirely allocated and aggregation of demand for the next phase is being carried out, the official said.
Queries sent to the secretary and spokesperson of MNRE remained unanswered at the time of publishing this report.
Components B and C of PM-Kusum were merged with the AIF scheme in August 2024. By integrating PM-KUSUM components B and C with the AIF, farmers can access funding for solar-powered irrigation systems alongside other agricultural infrastructure projects.
'We have to submit the EFC (expenditure finance committee) note. Let's see how much we are able to get from EFC,' the official said when asked about the capex of phase 2. 'It will at least be equivalent to what was the phase 1 of the scheme, roughly Rs 35,000 crore.'
'Once we submit the EFC note, we might include a component on agrovoltaics–the practice of combining agriculture with solar energy production on the same land and small guideline changes based on the learning that we had in phase 1,' the official said.
Learnings from Phase 1 include the need to raise the central financial assistance (CFA) cap to 10 pumps, which is currently limited to 7.5 pumps. Another takeaway was Maharashtra's model, wherein the state aggregated 40,000 acres of farmer land through a centralised portal without centre support. The model is now being shared with other states for localised adaptation. Rajasthan, Madhya Pradesh, and Telangana were among other successful models, the official said.
'Guidelines in phase 1 have been amended multiple times based on learnings. Amongst the other ones, we have still not been able to increase the CFA capacity. Let's see if in phase 2 we are able to increase or not,' the official added.
For component C, which is feeder level solarisation, some states saw enthusiastic adoption, the official said. In gigawatt terms, Maharashtra and Rajasthan have tendered 16 GW and 12 GW respectively, against an allocation of 4 GW.
Launched in March 2019, with a total outlay of Rs 34,422 crore, the PM-Kusum scheme aims to enhance energy and water security for farmers, reduce reliance on diesel, and increase their income. The AIF scheme, on the other hand, focuses on providing loans for the creation of post-harvest management infrastructure and community farming assets.