PM-KUSUM can cut farm power subsidies, boost solar irrigation: Report

India’s flagship rural solar initiative, the PM-KUSUM scheme, is emerging as a powerful lever to reduce the country’s growing farm electricity subsidy burden while accelerating clean irrigation adoption. According to a recent report released on April 8, 2026, by leading climate research institutions, including CEEW, CSTEP, and IISD, solar-powered irrigation could reshape agricultural energy economics over the next decade.

The study highlights that solarising just 10% of agricultural electricity demand could generate massive fiscal savings for states over a 25-year horizon. Estimated savings include ₹6,305 crore in Madhya Pradesh, ₹2,543 crore in Rajasthan, ₹3,113 crore in Karnataka, and ₹1,935 crore in Tamil Nadu, significantly easing subsidy pressures on state discoms. In many regions, decentralized solar irrigation already delivers power at ₹3–4 per unit, compared to the ₹6–7 per unit cost of conventional supply, making solar a financially competitive alternative.

Beyond fiscal relief, PM-KUSUM is also driving structural transformation in rural energy systems. The scheme, which targets 34.8 GW of solar capacity by March 2026, supports decentralized solar plants, standalone solar pumps, and feeder-level solarisation. With over 40 GW already tendered and 20 GW of PPAs signed, the pipeline indicates strong scalability, though execution remains uneven across states due to financing gaps and grid integration challenges.

Experts note that farmers can also benefit directly, earning returns of 11–16% annually through surplus power sales or additional income via land leasing models. However, the report stresses the need for improved tariff design, stronger DISCOM participation, and better infrastructure planning to fully unlock the scheme’s potential. As India enters the next phase of PM-KUSUM, solar irrigation is positioned not just as an energy solution—but as a long-term fiscal and agricultural reform driver.

Resource: Energy World

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