PM KUSUM 2.0 Is Coming — India's Rs 50,000 Crore Agricultural Solar Push

What PM KUSUM Was

PM KUSUM — Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan — was India's flagship agricultural solar programme, running from 2019 to March 2026. It had three components: Component A set up small solar plants (500 kW to 2 MW) on farmer's land; Component B replaced diesel irrigation pumps with solar pumps; and Component C solarised grid connected agricultural pumps at the feeder level.

The scheme's total outlay was Rs 34,422 crore. By early 2026, industry and policy-linked reporting indicated that it had installed around 10,203 MW across all components, falling short of the 34,800 MW target, but building a foundation of technology, vendor networks, and state experience that Phase 2 can build on. In FY2025, the scheme saw record execution: 4.4 lakh solar pumps installed under Component B — a 4.2x jump from the previous year — and 2.6 lakh grid connected pumps solarised under Component C, 25 times more than FY2024.

What PM KUSUM 2.0 Will Look Like

According to Mercom India, Union Minister Pralhad Joshi confirmed at the National Agro RE Summit in March 2026 that PM KUSUM 2.0 will include a 10 GW agrivoltaics component — solar panels installed on elevated structures over farmland, allowing crop cultivation to continue underneath. The budget is expected to rise to approximately Rs 50,000 crore, an increase of nearly 45%. The scheme will sharpen focus on feeder level solarisation (Component C), which has proven most effective at reducing state subsidy burdens while delivering reliable irrigation power to farmers.

A new report by CEEW, CSTEP, and IISD published on April 8, 2026 estimates that solarising just 10% of agricultural electricity demand could save states enormous sums over 25 years: Rs 2,543 crore in Rajasthan, Rs 6,305 crore in Madhya Pradesh, Rs 3,113 crore in Karnataka, and Rs 1,935 crore in Tamil Nadu. The same report notes that decentralised solar irrigation already costs Rs 3 to 4 per unit — far below utilities' Rs 6 to 7 per unit supply cost — making the economic case for PM KUSUM 2.0 even stronger than Phase 1.

The design is also expected to include battery storage to improve reliability and allow evening dispatch, and stronger payment security through escrow like mechanisms that have already proven effective in states like Madhya Pradesh, where developer payment timelines have improved significantly.

The Agrivoltaics Angle — A New Project Type for EPCs

The 10 GW agrivoltaics target in PM KUSUM 2.0 is significant for EPCs who have never worked with this project type. Agrivoltaics means solar panels mounted on elevated structures at least 2.1 metres high, allowing farming to continue underneath. The panels can be spaced more widely than in conventional ground mounted installations to allow sunlight to reach the crops below. Panels may be tilted differently to manage shade distribution.

For EPCs, this means learning a new structural design approach and quoting accurately for the elevated mounting structures, which cost more per kW than standard ground mounted frames. The trade off for farmers is powerful: they earn from both crops and solar generation, with the solar income covering the additional structure cost within a few years while providing 25 years of electricity revenue.

States like Gujarat, Andhra Pradesh, and Rajasthan already have agrivoltaics pilot experience. EPCs based in these states who want to be ahead of PM KUSUM 2.0 should start building design capability now — before the scheme is formally notified and competition intensifies.

Why Component A Has Struggled — and How 2.0 May Fix It

Component A — small solar plants (500 kW to 2 MW) on farmers' barren land connected to the DISCOM — had the most difficulty in Phase 1. Many projects stalled at the Power Purchase Agreement stage because DISCOMs were reluctant to commit to buying power from farmers at regulated tariffs. Land availability was also a challenge in states where agricultural land is politically sensitive.

PM KUSUM 2.0 is expected to address this by increasing private sector participation, allowing more flexibility in Component A project design, and incorporating payment security mechanisms that reduce DISCOM counterparty risk. The agrivoltaics option specifically helps with land resistance — because panels go above crops rather than replacing them, farmer opposition is typically lower.

Frequently Asked Questions

When will PM KUSUM 2.0 be formally notified?

As of April 21, 2026, PM KUSUM 2.0 has not yet been formally notified by MNRE with full guidelines. The scheme has received Expenditure Finance Committee approval, and MNRE has been running stakeholder consultations since September 2025. The announcement is expected with the Union Budget for FY2026-27. Watch the MNRE website for the official notification, which will include the per MW benchmark costs, subsidy structure, and state wise targets.

What is agrivoltaics and how does it differ from a standard solar plant?

Agrivoltaics means solar panels installed on elevated structures at least 2.1 metres above the ground, allowing farming to continue underneath. Unlike a standard ground mounted plant that occupies the land fully, an agrivoltaic plant shares the land with crops or animal husbandry. The panels are typically spaced more widely to allow sunlight to reach the crops below. For EPCs, this means elevated steel mounting structures (costing more per kW than standard frames) but access to farmland that would otherwise be unavailable for solar. The cost premium for elevated mounting is typically Rs 40,000 to 80,000 per kW above standard ground mounted structure costs.

What size projects will fall under PM KUSUM 2.0 Component A?

Component A under Phase 1 covered decentralised solar plants of 500 kW to 2 MW each, set up by farmers, cooperatives, panchayats, or Farmer Producer Organisations on barren or fallow land. The power was sold to the local DISCOM at a pre fixed tariff. PM KUSUM 2.0 is expected to maintain a similar size range but may allow slightly larger installations, particularly for agrivoltaic projects where land availability and elevated structure costs make slightly larger capacities more economical. Final size limits will be confirmed in the official notification.

Sources

• IISD / CEEW / CSTEP — iisd.org — "PM-KUSUM Can Cut Electricity Subsidies While Accelerating Solar Irrigation in India" (April 8, 2026)
• Mercom India — mercomindia.com — PM KUSUM 2.0 to include 10 GW agrivoltaics (March 12, 2026)
• MNRE — mnre.gov.in — PM KUSUM scheme guidelines and progress data
• Down to Earth — downtoearth.org.in — PM KUSUM 2.0 policy discussions and feeder solarisation focus