PM-KUSUM turned India's farm pumps into power plants that pay farmers for surplus

India ran about 30 million agricultural pumps, 22 million electric and 8 million diesel. Electricity for farming was highly subsidised — the government itself called it a main cause of rapid groundwater depletion and of discoms' poor finances — and farms consumed around 200 billion units a year, 18 percent of national electricity. KUSUM was announced in the February 2018 budget but took until February 2019 to clear the cabinet, stalled over fund allocation with the finance ministry.

The March 2019 scheme had three parts: Component A put 10,000 MW of decentralised solar plants, each up to 2 MW, on farmers' barren and fallow land; Component B replaced diesel pumps with 17.5 lakh standalone solar pumps up to 7.5 HP; Component C solarised 10 lakh grid-connected pumps. Central financial support was set at ₹34,422 crore toward 25,750 MW of capacity, with states and farmers sharing the rest — and, crucially, the scheme let farmers sell generation from their barren land to the grid.

The design point was the tariff, not the panel. As the government put it: 'If farmers are able to sell surplus power, they will be incentivised to save power and, in turn, it will mean reasonable and efficient use of groundwater.' Standalone pumps work only 100–150 days a year, so the 2020 guidelines added a universal solar pump controller that runs other equipment in the off-season, and discoms were paid a procurement incentive of 40 paise per kWh for five years to buy the farmers' power.

Pay farmers for surplus solar — saving power saves water

Diesel replacement alone saves fuel but not water; the sell-surplus tariff fixes the incentive, not just the equipment.

Barren land becomes revenue land: Component A puts generation where the grid is weak and the land is idle.

Daytime solar next to the feeder cuts the discom's power purchase cost and its agricultural subsidy burden at once.

A procurement-based incentive pays the utility for buying farmers' power, aligning the discom instead of fighting it.

The universal pump controller converts 100–150 idle days a year into milling, cooling and battery-charging income.

When a subsidy rewards consumption you cannot police, convert the consumer into a producer and pay for what they don't use. The meter that pays out disciplines the pump better than any inspector.

Take-up was slow and the scheme was rescaled in September 2023: the standalone pump target came down from 17.5 lakh to 14 lakh while pump solarisation expanded to 35 lakh units plus feeder-level solarisation. As on 31 January 2024, more than 2.95 lakh standalone solar pumps had been installed — Haryana alone had sanctioned 252,655 and installed 80,004 — and the scheme ran demand-driven, open to farmers, water-user associations and cluster irrigation systems.