The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) is a flagship initiative launched by the Government of India in 2019. The scheme aims to provide energy security to farmers, promote solar power generation, reduce dependence on diesel-based irrigation, and create additional income opportunities through renewable energy.
This guide explains the PM-KUSUM Scheme in Gujarat, its components, benefits, eligibility criteria, project development process, financial viability, and investment opportunities.
Table of Contents
- What is PM-KUSUM?
- Objectives of the PM-KUSUM Scheme
- PM-KUSUM Components
- PM-KUSUM in Gujarat
- Component A: Investment Opportunity
- Benefits of PM-KUSUM Projects
- Project Development Process
- Business Models Available
- Financial Snapshot of a 1 MW Project
- PM-KUSUM vs Rooftop Solar vs Open Access
- Best Locations in Gujarat for PM-KUSUM Projects
- Frequently Asked Questions
- Conclusion
What is PM-KUSUM?
PM-KUSUM stands for Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan.
The scheme was launched by the Ministry of New and Renewable Energy (MNRE) to:
- Improve energy access for farmers
- Promote solar-powered irrigation
- Reduce diesel consumption
- Encourage decentralized renewable energy generation
- Enhance farmer income through power sales
The program supports both farmers and investors by enabling solar power generation at the agricultural level.
Objectives of the PM-KUSUM Scheme
Energy Security
Provide reliable electricity for agricultural operations.
De-dieselization
Replace diesel-powered irrigation pumps with solar-powered alternatives.
Additional Income Generation
Enable farmers and landowners to earn revenue through solar power generation and sale of surplus electricity.
Environmental Sustainability
Reduce carbon emissions and encourage renewable energy adoption.
PM-KUSUM Components
Component A
Installation of decentralized grid-connected renewable energy plants ranging from 0.5 MW to 2 MW.
Key Features:
- Ground-mounted solar projects
- Power sold directly to DISCOMs
- Long-term revenue generation
Component B
Deployment of standalone solar-powered agricultural pumps.
Benefits:
- Suitable for off-grid locations
- Eliminates diesel costs
- Reliable irrigation support
Component C
Solarization of existing grid-connected agricultural pumps.
Advantages:
- Reduced electricity consumption
- Surplus power export opportunities
- Improved energy efficiency
PM-KUSUM in Gujarat
Gujarat has emerged as one of India's leading states in implementing PM-KUSUM initiatives.
Role of GEDA
The Gujarat Energy Development Agency (GEDA) serves as the state nodal agency responsible for:
- Planning
- Monitoring
- Coordination
- Project implementation support
Gujarat Allocations
Component A
- 500 MW sanctioned capacity
Component B
- More than 8,000 standalone solar pumps approved
Component C
- Thousands of grid-connected pumps targeted for solarization
These initiatives demonstrate Gujarat's commitment to renewable energy and agricultural transformation.
Component A: The Major Investment Opportunity
Component A provides a strong opportunity for:
- Farmers
- Landowners
- Solar developers
- Renewable energy investors
Eligible participants can install decentralized solar plants and sell electricity to local DISCOMs through long-term Power Purchase Agreements (PPAs).
Key Project Parameters
| Parameter | Details |
|---|---|
| Capacity | 0.5 MW – 2 MW |
| Land Requirement | 4–5 acres per MW |
| PPA Duration | 25 Years |
| Tariff | Approximately ₹3.00–₹3.25 per unit |
| Annual Revenue | ₹40–₹70 lakh per MW |
| Estimated IRR | 12%–14% |
| Payback Period | 6–7 Years |
Benefits of PM-KUSUM Projects in Gujarat
Reliable Daytime Power Supply
Farmers gain access to dependable daytime electricity for irrigation.
Significant Cost Savings
Benefits include:
- Reduced diesel expenses
- Lower electricity costs
- Improved farm profitability
Enhanced Income Opportunities
Farmers can:
- Generate solar power
- Sell surplus electricity
- Create a stable secondary income source
Environmental Sustainability
Solar energy helps:
- Reduce greenhouse gas emissions
- Improve air quality
- Support climate goals
Government Subsidies
Financial support typically includes:
- Up to 60% subsidy support
- Institutional financing options
- Reduced upfront investment
Rural Development
Solar projects contribute to:
- Job creation
- Local economic development
- Infrastructure improvement
Project Development Process in Gujarat
Step 1: Eligibility Assessment
Eligible applicants include:
- Individual farmers
- Farmer groups
- Cooperatives
- Panchayats
- FPOs
- Water User Associations
Step 2: Land Identification
Requirements include:
- Suitable land parcel
- Preferably near a substation
- Clear ownership documentation
Step 3: Feasibility Assessment
Authorities conduct:
- Technical surveys
- Grid connectivity evaluations
- Site inspections
Step 4: Application Submission
Required documents generally include:
- Land ownership records
- Project report
- Financial details
- Technical feasibility documents
Step 5: Power Purchase Agreement
Successful applicants sign a long-term PPA with the DISCOM.
Step 6: Financial Closure
Project financing may include:
- Government subsidies
- Bank loans
- Equity investment
Step 7: Project Execution
Activities include:
- Procurement
- Installation
- Grid connectivity
- Commissioning
Step 8: Monitoring and Operations
Post-commissioning activities include:
- Performance monitoring
- Maintenance
- Reporting requirements
Business Models Available
CAPEX Model
Characteristics:
- Full ownership by beneficiary
- Higher upfront investment
- Greater long-term returns
RESCO Model
Characteristics:
- Lower initial investment
- Developer ownership
- Revenue through leasing arrangements
Financial Snapshot: Sample 1 MW PM-KUSUM Project
| Parameter | Typical Value |
|---|---|
| Plant Capacity | 1 MW |
| Land Requirement | 4–5 Acres |
| Project Cost | ₹3.75–₹4.25 Crore |
| Annual Generation | 14.5–16.2 Lakh Units |
| Annual Revenue | ₹43–₹52 Lakh |
| O&M Cost | ₹6–₹8 Lakh |
| PPA Duration | 25 Years |
| IRR | 12%–14% |
| Payback Period | 6–7 Years |
PM-KUSUM vs Rooftop Solar vs Open Access
| Feature | PM-KUSUM | Rooftop Solar | Open Access Solar |
|---|---|---|---|
| Users | Farmers & Landowners | Residential & Commercial | Large Industries |
| Location | Ground Mounted | Rooftops | Remote Solar Plants |
| Subsidy | Available | Available | Generally Not Available |
| Revenue | PPA Income | Electricity Savings | Energy Cost Reduction |
| Investment | Medium to High | Low to Medium | High |
Top Locations in Gujarat for PM-KUSUM Projects
Several districts have shown strong potential for PM-KUSUM implementation:
Banaskantha
Known for:
- Agricultural activity
- High solar irradiation
- Farmer participation
Surendranagar
Emerging hub for decentralized solar projects.
Kutch
Advantages include:
- Large land availability
- Excellent solar resource
- Utility-scale potential
Other Prominent Districts
- Rajkot
- Bhavnagar
- Jamnagar
- Patan
- Mehsana
Frequently Asked Questions
What is PM-KUSUM?
A government scheme that promotes solar energy adoption in agriculture through solar pumps and decentralized solar power plants.
Who can apply?
Eligible applicants include:
- Farmers
- Farmer groups
- Cooperatives
- Panchayats
- FPOs
- Private developers (under approved models)
How much land is required for a 1 MW project?
Typically 4–5 acres.
What is the PPA duration?
Most projects operate under a 25-year Power Purchase Agreement.
What is the typical payback period?
Approximately 6–7 years.
Can landowners lease their land?
Yes. Land leasing models allow landowners to earn annual rental income while developers build and operate the solar plant.
Which PM-KUSUM component offers investment opportunities?
Component A provides the strongest investment opportunity through decentralized solar power plants connected to DISCOM networks.
Conclusion
The PM-KUSUM Scheme has become one of India's most impactful renewable energy initiatives, particularly in Gujarat. By combining agricultural development with clean energy generation, the scheme helps farmers reduce costs, improve energy security, and generate additional income.
For investors, developers, and landowners, Component A offers a compelling long-term opportunity backed by government support, stable PPAs, and predictable cash flows. As Gujarat continues expanding its renewable energy ecosystem, PM-KUSUM projects are expected to play a critical role in the state's sustainable growth and rural development.