Promoting Distributed Solar for Agricultural and Rural Transformation

February 17, 2026

India’s rural electricity supply is shaped by an energyintensive agricultural sector that consumes nearly onefifth of national electricity through heavily subsidised or zero-tariff power. While this supports irrigation and food security, it has generated structural inefficiencies, including DISCOM financial stress, distorted price signals, inefficient water and energy use, and environmental degradation. The PM-KUSUM scheme, launched in 2019, aimed to address these challenges by promoting decentralised solar energy, reducing subsidies, replacing diesel pumps, and enhancing farmer incomes. However, implementation has been uneven, with weak performance under Components A and C due to land constraints, poor commercial viability, complex approvals, and weak rural grids. Addressing these gaps requires integrated land, financial, tariff, and grid reforms led by proactive state participation.