Is a solar farm an earning opportunity?
It can be, in three different ways, and they suit different people. A farmer can set up a small power plant and sell the output to the DISCOM under PM-KUSUM, lease land to a developer who does, or use solar on their own land to cut what they pay for power.
Updated 27 September 2026
Three ways to earn from solar on your land
| Your own plant (KUSUM A) | Lease to a developer | Solar for your own use | |
|---|---|---|---|
| Size | 500 kW to 2 MW | As the developer builds it | Sized to your own use |
| Who invests | You, usually with a loan | The developer | You |
| Where the money comes from | Selling power to the DISCOM | Lease rent | Lower electricity or diesel bills |
| Risk | Highest | Lowest | Depends on your use |
1. Your own power plant under PM-KUSUM
Component A of PM-KUSUM, the central government’s scheme for farmers, lets individual farmers, groups of farmers, cooperatives, panchayats, farmer producer organisations and water user associations set up solar plants of 500 kW to 2 MW. The DISCOM buys the power at a feed-in tariff set by the state electricity regulator.
A few things decide whether this works:
- The DISCOM has to have room for the power. It notifies how much capacity each substation can take and invites applications, so you cannot simply build and connect.
- The tariff is set in the power purchase agreement. Check what it is and whether it changes over the term before you plan around it.
- A plant of this size is a large investment, usually funded with a bank loan. The return depends on the tariff, the building cost and the loan.
The scheme’s timelines have changed. The ministry extended the deadlines for projects already awarded, and a follow-on scheme, often called KUSUM 2.0, has been reported as under consideration. In Punjab, watch the notices from PEDA, the state’s nodal agency for the scheme, and from PSPCL for the next call for applications.
2. Leasing land to a developer
If you have suitable land but not the money or the appetite for a power plant, the scheme allows a developer or the DISCOM to build the plant on your land. You receive a lease rent agreed between you and the developer. It is the lowest-risk route: you give up the use of the land for the length of the lease and take no part in selling the power.
Before signing, have a lawyer read the lease. Check the length, the rent and any increase over the years, who removes the plant at the end, and what happens if the developer stops paying.
3. Solar that cuts your own bills
For most farmers and landowners, the most certain return from solar is the money it saves.
- A solar pump replaces diesel or grid power for irrigation. PM-KUSUM Component B subsidises standalone solar pumps through PEDA; see the solar pump subsidy for Punjab farmers and solar pumps.
- Under Component C, a grid-connected farm pump can be solarised, with the farmer using the power for irrigation and selling the surplus to the DISCOM.
- A farmhouse, dairy, cold store or shop on the land can run on its own rooftop or ground-mounted system; see commercial solar in Punjab and off-grid systems where there is no reliable grid.
Be wary of promised returns
Anyone offering a guaranteed income from a solar farm, or asking for money to reserve a place in a scheme, should be checked carefully. Scheme applications go through the DISCOM and PEDA. The official sources are listed below.
Sources
Questions we are asked
Can a farmer sell solar power to PSPCL?
Under PM-KUSUM Component A, farmers, groups of farmers, cooperatives and panchayats can set up plants of 500 kW to 2 MW and sell the power to the DISCOM at a feed-in tariff set by the state regulator. The DISCOM invites applications when it has capacity to take the power.
Can I lease my land for a solar farm?
Yes. Under PM-KUSUM, a landowner who cannot fund a plant can let a developer or the DISCOM build it on the land, and receives a lease rent agreed between the two parties.
How much can a solar farm earn?
It depends on the tariff in the power purchase agreement, the cost of building the plant, the loan terms and the land. We do not quote a return without those figures, and nobody should promise you one without them either.