PMKUSUM Component B: Solar Pump Subsidy Guide for Installers

If you only sell rooftop solar, you are ignoring one of the largest government-funded order books in Indian solar. Under PM KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan), the PMKUSUM Component B solar pump programme pays for standalone off-grid solar water pumps for farmers, and the government funds up to 60% of every system you install where the state pays its share: 30% from the Centre plus at least 30% from the state. Replacing diesel pumps (de-dieselisation of the farm sector) is a stated aim of the scheme, per the Ministry of New and Renewable Energy (MNRE).

This guide is written for EPCs and installers, not farmers. It covers the subsidy structure, who qualifies, how empanelment works, the application workflow, pump sizing and pricing, documentation, the rejection reasons that kill projects, and how to quote PMKUSUM-B work profitably.

What PMKUSUM Component B Actually Covers

PM KUSUM has three components, and confusing them is the first mistake new installers make. Component A covers small ground-mounted solar plants (500 kW to 2 MW) on farmland. Component B covers standalone solar agricultural pumps, fully off-grid systems that replace diesel or kerosene pump sets where no grid connection exists. Component C covers solarisation of existing grid-connected agricultural pumps.

Component B is the volume play. The target in MNRE's consolidated PM-KUSUM guidelines of 17 January 2024 is 14 lakh standalone solar agriculture pumps. Pumps above 7.5 HP may be allowed, but the central subsidy is limited to that for a 7.5 HP pump. In the northeastern region, hill states (Jammu and Kashmir, Ladakh, Uttarakhand, Himachal Pradesh) and islands, subsidy is available up to 15 HP, restricted to 10% of installations. Every system includes modules, mounting structure, pump motor and a controller with remote monitoring, and the vendor must provide a mandatory 5-year comprehensive maintenance contract (AMC) that includes insurance against natural calamities and theft. The scheme timeline was extended to 31 March 2027 for all components, per a Lok Sabha answer of 29 July 2026 (Unstarred Question 1613).

The Subsidy Structure: Central, State, and Farmer Share

The subsidy is calculated on the MNRE benchmark cost for each pump capacity, not on your invoice price. Per a Press Information Bureau release (2023), Central Financial Assistance (CFA) is 30% of the MNRE benchmark cost or the tender-discovered price, whichever is lower. The standard split:

Two details matter for your quote. First, the amendment of 20 November 2023 removed the mandatory state share (PIB, 23 December 2023): Components B and individual pump solarisation under C can run even where a state does not commit its 30% share, in which case the farmer's contribution rises to 70%. Second, MNRE releases the CFA to the state implementing agency, not to you: 30% as an advance after letters of award, up to 60% as a second tranche, and 10% on the completion report. The agency may pass funds to vendors in stages on milestones in the letter of award (guidelines 5.3.4). Your own payment schedule therefore comes from the tender terms, so read them before you bid and plan working capital for the gap.

Who Is Eligible: The Farmer and the Field

Eligibility is farmer-side, but you will be the one screening it in practice. The MNRE guidelines say Component B is for individual farmers in off-grid areas where grid supply is not available, installing standalone pumps or replacing diesel pumps. Exact documents and tests (land ownership or lease, water source, bank account) come from your State Implementing Agency, so treat the next lines as a screening checklist, not as national rules: a farmer with agricultural land, a working water source on or near the field, and no existing grid-connected pump on that survey number.

Under the guidelines, priority goes to small and marginal farmers and farmers using micro irrigation. In states where applications exceed the annual allocation, the agency's priority rules decide who clears the queue first. A farmer with an existing electric pump on the same field belongs in Component C, and pushing them into Component B is a likely rejection trigger.

Empanelment: How to Become an Approved Component B Vendor

You cannot install a subsidised Component B pump unless your firm is selected through the state's process. Unlike PM Surya Ghar, where there is no tender and vendors simply register on the national portal, Component B vendors are chosen by tender. States call for tenders through the State Implementing Agency, which can be a DISCOM, the Agriculture Department, the Minor Irrigation Department or another department the state designates, and in some states a state nodal agency such as GEDA in Gujarat or RRECL in Rajasthan (MNRE guidelines 5.1 and 5.2.3). Check which body runs it in your state. System integrators, aggregators, manufacturers of modules, pumps or controllers, and joint ventures of manufacturers with integrators can bid.

1. 1

   Get your compliance file ready

   Each tender sets its own eligibility, and it usually asks for company registration, GST, PAN and financials, plus an EMD (earnest money deposit) and a tender fee. The amounts are in the tender. As one example, the Kerala ANERT expression of interest for Component C (June 2024) set an EMD of ₹5,00,000, with exemptions allowed.

2. 2

   Lock compliant hardware

   The guidelines make it mandatory to use indigenously manufactured solar modules with indigenous cells, and the motor-pump set, controller and balance of system must also be manufactured in India, with a declared list of any imported components. Only items on MNRE's approved list can be used (guidelines 5.2.3). Modules also sit under the ALMM list. Our explainer on the ALMM list and what it means for your procurement covers the module side in detail.

3. 3

   Bid in the state tender or EOI round

   You quote a per-HP rate, and the subsidy is on the benchmark cost or the tender cost, whichever is lower. Tenders usually pick the lowest valid bid, so know your breakeven before you bid, including the 5-year AMC and service cost.

4. 4

   Sign the rate contract and build a service network

   The guidelines require the vendor to keep one authorised service centre in each operational district (or cluster of districts, as the agency decides) and a helpline in the local language, to inspect each pump at least once a quarter and submit a quarterly inspection report, and to provide remote monitoring. A vendor that fails to install the allocated pumps in time can be debarred for five years (guidelines 5.2.3). Budget those quarterly inspections and the insurance cover into your rate.

The Application Workflow, Step by Step

The farmer applies, but in practice the selected vendor drives the file. The national portal is pmkusum.mnre.gov.in, while most states route applications through their own nodal agency portals.

1. Screen and register the farmer. Verify land record, water source, and no existing grid connection. Register on the portal your state's implementing agency runs, if it has one, with the farmer's mobile number. Check which portal applies in your state.
2. Submit the application with documents. Land records, Aadhaar, bank details, water source proof. See the documentation section below.
3. Wait for selection and the demand letter. Selection timelines are set by each state, and MNRE publishes none. Ask your agency how its batches and demand letters work.
4. Collect the farmer's contribution. The demand letter says how and by when the farmer's share is due. Farmers who miss the window may lose the slot, so check your state's terms.
5. Install and commission. The agency then inspects and certifies the installation. MNRE expects the whole project to be completed within 24 months of its sanction (guidelines 5.3.3).
6. Claim the subsidy. Payments to you follow the milestones in the letter of award, and the agency can pass funds to vendors in stages (guidelines 5.3.4). The timing depends on the tender terms and on funds released to the agency.

For the farmer-facing version of this process with state portal links, the PM KUSUM Component B application guide from Heaven Green Energy is a useful handout for your customers.

Pump Sizing and Pricing: The Benchmark Math

The guidelines cap solar PV capacity in kW at the pump rating in HP (a 3 HP pump cannot have more than 3 kW), allow pumps above 7.5 HP but limit the subsidy to that for 7.5 HP, and allow up to 15 HP in northeastern, hill states and islands for 10% of installations. The acreage rules of thumb in the table below are our assumptions, not MNRE norms. The agency's field officer confirms the approved HP during site verification, so never pre-sell a larger system before that check.

MNRE publishes benchmark costs per HP (it issued the Component B benchmark in September 2023, per PIB of 23 December 2023), and the subsidy applies to the lower of benchmark and tender cost. The table below uses round numbers we assumed for illustration, not MNRE's benchmark; always pull the current benchmark from MNRE before quoting.

If your tender rate exceeds the benchmark, the farmer pays the difference, and that difference is where deals die. Keep your per-HP rate at or under benchmark, and make margin on volume and efficient installation instead. For broader pricing context across system types, see our data on solar system pricing by state.

Documentation: What the File Must Contain

Rejections at the documentation stage are avoidable. Each state sets its own list, so use this as a typical file and confirm against your agency's checklist:

• Aadhaar card of the applicant, matching the bank account for DBT.
• Land record in the state format: 7/12 Utara and 8A in Gujarat, Jamabandi in Rajasthan, Khasra or Khatoni in MP and UP.
• Bank passbook or cancelled cheque of an Aadhaar-seeded account.
• Water source proof: borewell completion report or groundwater permission where required.
• Tenancy agreement plus landowner consent, for tenant farmers.
• Recent passport-size photograph.

GST treatment on your invoice is separate from the subsidy file. Solar pump supply-and-install is generally billed as a composite supply; our breakdown of GST on solar installation services covers how to structure it.

Common Rejection Reasons and How to Prevent Them

Most Component B files that stall do so for administrative, not technical, reasons. These are common causes we hear of, not an official ranking, and the first four depend on your state's rules:

1. Name mismatch between Aadhaar and the land record. Fix it at the Talati or Tehsildar office before applying.
2. Existing grid connection on the same survey number. Makes the farmer ineligible for Component B; redirect to Component C.
3. Stale land records. Some states ask for recently issued records, so check the window your agency sets.
4. Bank account not Aadhaar-seeded. Where the agency pays the farmer or checks the account, a mismatch can stall the file.
5. Unverified water source. Missing borewell completion report or groundwater permission.
6. State quota exhausted. MNRE allocates state-wise annual targets; late-year applications get waitlisted. File early in the financial year.

One more worth stating plainly: the government application is free. Agents charging "application fees" or "guaranteed selection" fees before the demand letter are a fraud risk that damages the whole vendor ecosystem. Tell your farmers this explicitly.

Component B vs Component C vs PM Surya Ghar: Where to Focus

Each scheme serves a different customer and a different margin profile. Choose based on your working capital, service network, and district mix.

Compared with PM Surya Ghar rooftop work (our PM Surya Ghar subsidy slabs guide covers that side), Component B has less sales friction but thinner margins and heavier after-sales obligations. Pumps also add to a village's total in the Model Solar Village challenge. Component C sits between the two: grid-connected farmers, DISCOM involvement, but an existing customer base you can identify from agricultural feeder data. For the wider policy picture, our roundup of MNRE guidelines for 2026 tracks what changed across schemes.

How to Quote PMKUSUM-B Projects Profitably

The installers who lose money on Component B all make the same error: they quote like it is a rooftop job with a subsidy discount. It is not. We call the correct method the KUSUM-B Bid-to-Bank Stack: price against the benchmark, not the customer; fund the receivable, not just the install; and price the AMC, not just the pump.

In practice, the stack means four things on every quote. Show the benchmark price, the exact subsidy split (with and without the state share), the farmer's share and loan option, and the diesel saving payback, all on one page. Add your cost structure on top: module, pump set, structure, transport to a rural site, installation crew, the 5-year AMC with quarterly inspections and insurance, and the financing cost of waiting for milestone payments. If that full stack still clears your margin floor at the tender-discovered rate, bid. If it does not, skip that state and put the capital into rooftop instead. Our solar installation cost breakdown is a good base for building the line-item model, and the Quickest Solar CRM pricing page shows what it costs to run the quoting side digitally.

The exception worth admitting: where the discovered rate is very close to benchmark and the agency pays on time, Component B volume can outperform residential rooftop on a pure margin-per-crew-day basis. Check that on your own numbers, because no official data compares the two.

How Quickest Solar CRM Fits

PMKUSUM-B sales are high-volume and documentation-heavy. Your field team is collecting land records, Aadhaar copies, and water-source photos at farm gates, then chasing demand letters and farmer contributions over WhatsApp for weeks. That workflow collapses if it lives in a notebook and a personal WhatsApp account.

• Proposal Generator, make a quote with your logo, items and terms, and add the benchmark cost, the subsidy split with and without the state share, the farmer share and the diesel payback as items or notes. Share the PDF on WhatsApp from the field.
• WhatsApp Follow-up, keep saved message templates and follow-up reminders for the demand-letter window and the farmer's deposit, so nobody on your team forgets to call.
• Quotation System, keep an admin-set price list with margin, so every rep quotes the same per-HP rates. Update it when the benchmark or the tender rate changes.
• Pipeline Management, track each file by stage (applied, demand letter, deposit paid, installed, commissioned, subsidy received) instead of losing files between site visits.

If you are building the farmer-lead side of this business, our guide on how to manage solar leads at volume covers the intake and follow-up structure that keeps a 100-file pipeline moving.

What to Do This Week, For Your EPC

1. Check your state's tender calendar. Visit the site of your State Implementing Agency (a DISCOM, a department or a nodal agency such as GEDA, RRECL, UPNEDA or MAHAURJA, depending on the state) and note the next tender or EOI window, the previous discovered rate, and the EMD amount.
2. Pull the current MNRE benchmark costs from mnre.gov.in and rebuild your per-HP rate card. If your numbers predate the last benchmark revision, your subsidy math is wrong in at least one direction.
3. Run the Bid-to-Bank Stack on ten past quotes. Add the financing cost of milestone payments and the 5-year AMC with quarterly inspections to your old per-HP price. If the real margin survives at your state's discovered rate, bid the next round. If not, you just saved a working-capital mistake.

Frequently Asked Questions

What is PMKUSUM Component B?

PMKUSUM Component B is the part of the PM KUSUM scheme that funds standalone, off-grid solar water pumps for farmers, replacing diesel pump sets where no grid supply is available. Central subsidy is available for pumps up to 7.5 HP (larger pumps may be allowed, with the subsidy limited to that for 7.5 HP). The central share is 30% of the benchmark or tender cost, whichever is lower, and a state share of at least 30% is optional since 20 November 2023 (MNRE guidelines, 17 January 2024).

How much subsidy does a farmer get under Component B?

The central CFA is 30% of the benchmark or tender cost, whichever is lower, and 50% in northeastern, hill states and islands. If the state also gives at least 30%, the farmer pays up to 40% (20% in northeastern and hill states), and bank finance can bring the first payment down to 10%. If the state gives nothing, the central share stays 30% (or 50%) and the farmer pays the remaining 70% (or 50%). Total subsidy is therefore up to 60% in general states with a state share, and up to 80% in northeastern and hill states with one.

Who is eligible for a PMKUSUM Component B pump?

The guidelines make Component B for individual farmers in off-grid areas where grid supply is not available, with priority for small and marginal farmers and farmers using micro irrigation. Your State Implementing Agency sets the documents and tests, such as land ownership or lease, a working water source and no existing grid-connected pump on that survey number, so check its checklist.

How does an installer get selected for PMKUSUM Component B?

Through a tender or expression-of-interest round run by the State Implementing Agency, which can be a DISCOM, the Agriculture Department, the Minor Irrigation Department or another department the state designates. System integrators, aggregators, manufacturers of modules, pumps or controllers and joint ventures can bid. The guidelines require indigenous modules with indigenous cells, MNRE-approved equipment, a 5-year AMC with insurance, quarterly inspections, a service centre in each operational district and a local-language helpline. Eligibility and EMD come from the tender.

How long does a Component B project take end to end?

MNRE sets no national figure for selection, demand letter, installation or inspection. It requires projects to be completed within 24 months of its sanction, with limited extensions (guidelines 5.3.3). The scheme timeline was extended to 31 March 2027 for all components (Lok Sabha answer of 29 July 2026). Your own timeline comes from the state tender and the letter of award.

What is the most common reason Component B applications get rejected?

There is no official ranking. Causes we hear of include a name mismatch between the applicant's Aadhaar and the land record, an existing grid connection on the same survey number (which belongs in Component C), stale land records where a state asks for recent ones, and bank details that do not match. A pre-check before filing avoids most of them.

Is PMKUSUM Component B profitable for installers?

It can be at volume, if you price against the tender cost rather than the MNRE benchmark ceiling and budget for the 5-year AMC with quarterly inspections and insurance, plus the wait for milestone payments from the implementing agency. Margins per project may be thinner than residential rooftop, but sales friction can be lower because up to 60% of the cost is subsidised where the state pays its share. Check this on your own numbers.