New Delhi, April 8, 2026 — Solar‑powered irrigation can cut agricultural power subsidies, provide reliable daytime electricity, boost farmers’ incomes, and create jobs, according to a new report.

The report Scaling Solar Power for Irrigation in India: Lessons from PM‑KUSUM by the Council on Energy, Environment and Water (CEEW), the Center for Study of Science, Technology and Policy (CSTEP), and the International Institute for Sustainable Development (IISD), finds that in many states, decentralized solar irrigation already costs INR 3–4 per unit, far below utilities’ INR 6–7 per unit supply cost.

Using a purpose-designed methodology, researchers estimate that solarizing just 10% of agricultural electricity demand could generate significant savings for states for over a 25-year period—INR 2,543 crore in Rajasthan, INR 6,305 crore in Madhya Pradesh, INR 3,113 crore in Karnataka, and INR 1,935 crore in Tamil Nadu. In Rajasthan alone, these savings are equivalent to more than 12.5% of the state’s annual agricultural power subsidy, highlighting PM-KUSUM’s potential to ease pressure on state budgets.

“Even modest solarization of agricultural power demand can significantly reduce long-term subsidy burdens while delivering reliable electricity to farmers,” said Anas Rahman, senior policy advisor, IISD. “As the scheme enters its next phase, states should focus on tariff design, grid readiness, and payment security to make solar irrigation financially sustainable for both utilities and farmers.”

The study focuses on Component A (small-scale grid-connected solar plants on farmers’ land) and Component C-FLS (feeder-level solarization) of Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), India’s flagship program to promote solar energy in agriculture. While the scheme has delivered clear benefits, implementation has fallen short of targets. Deployment to date stands at 8.4% under Component A and 38.2% under Component C-FLS.

Beyond fiscal savings, the scheme has also supported jobs and farmer incomes. Over 32,000 jobs have been created under components A and C-FLS, and farmers can earn an estimated 11%–16% annual return on investment by installing 0.5 MW–2 MW solar plants and selling electricity to the grid. Leasing land can generate around INR 30,000 per acre per year.

Despite early interest from states, progress has been slowed by low farmer awareness, land availability constraints, tariff viability challenges, grid limitations, and broader institutional and financial bottlenecks. Addressing these barriers will be critical to scaling impact in the next phase.

A growing pipeline signals readiness for scale

State‑level interest in the scheme has been building. More than 40 GW has been tendered under PM‑KUSUM over the past 2 years, and power purchase agreements have been signed for over 20 GW. Much of the remaining capacity is at the letter-of-award stage, with commissioning timelines of 9–15 months, pointing to a strong near-term pipeline of projects.

“PM‑KUSUM has moved beyond pilots to a scale‑ready pipeline, with significant capacity already tendered and under development,” said Shalu Agrawal, director of programmes at CEEW. “What matters now is execution—getting tariffs rights, reducing payment risk, and integrating projects smoothly into the grid. Done well, solar irrigation will become a cost-effective, mainstream solution for meeting agricultural power demand while easing subsidy pressures.”

With the first phase of the scheme concluded on March 31, 2026, the report recommends a next-generation scheme that incorporates lessons learned and is flexible and investment-ready, enabling states to adapt, innovate, and tailor the scheme to local conditions.

“States have been the real drivers of innovation under PM‑KUSUM,” said Rishu Garg, senior policy specialist, CSTEP. “The next phase must allow states more flexibility, strengthen state implementing agencies, expand planning capacity at the distribution level, and prepare rural grids to handle decentralized solar. Without these institutional foundations, scale will remain uneven across states.”

The challenge ahead is no longer proving the viability of solar irrigation but enabling scale. With the right reforms, PM‑KUSUM can evolve from a promising start into a durable shift toward clean, reliable power for Indian agriculture.

Key recommendations

• Ensure tariff viability through competitive bidding or market-linked benchmarks  
• Ease land constraints through geographic information system-based tools and approval-ready land banks  
• Strengthen distribution company ownership and planning  
• Prepare the grid through hosting-capacity assessments and feeder planning  
• Unlock financing through payment security mechanisms and blended finance  
• Improve farmer uptake through local outreach and extension networks

Media Contacts

• Anas Rahman, senior policy advisor, IISD; [email protected]
• Richik Bandyopadhyay, senior engagement associate, CEEW; [email protected]
• Madhulika Verma, senior communications officer, IISD; [email protected]
• Tulshe Agnihotri, communications specialist, CEEW; [email protected]
• Merlin Francis, senior manager communication (content), CSTEP; [email protected]

About CEEW

The Council on Energy, Environment and Water (CEEW)—a homegrown institution with headquarters in New Delhi—is among the world’s leading climate think tanks. The Council uses data, integrated analysis, and strategic outreach to support public policy, transform markets, shape technology, and nudge behaviour. CEEW seeks to explain—and change—the use, reuse, and misuse of resources. It addresses pressing global challenges through an integrated and internationally focused approach. The Council prides itself on the independence of its high-quality research and strives to impact sustainable development at scale. In over 15 years of operation, CEEW has impacted over 400 million lives and engaged with over 20 state governments. Follow us on LinkedIn and X (formerly Twitter) for the latest updates.

About CSTEP

The Center for Study of Science, Technology and Policy (CSTEP) is one of India’s leading think tanks, with a mission to enrich policymaking with innovative approaches using science and technology for a sustainable, secure, and inclusive society. CSTEP’s interdisciplinary research encompasses diverse fields, such as energy, climate, and air pollution.

February 18, 2026,  New Delhi—India can build on its clean cooking success by expanding decentralized biogas and electric cooking alongside liquefied petroleum gas (LPG) and piped natural gas (PNG), according to a new report.

The report, India’s Clean Cooking Shift: Scaling Non-Fossil Fuel Solutions by the International Institute for Sustainable Development (IISD), finds that non-fossil options—particularly decentralized biogas and electric cooking—can work at scale if supported by finance, services, and targeted regulations.

“Building on the success of LPG, India now has an opportunity to gradually widen its clean cooking options by unlocking non-fossil fuel solutions alongside existing fuels,” said Sunil Mani, policy advisor at IISD. “A more diverse cooking energy mix can strengthen energy security, support climate goals, and help manage costs for both families and the government over time. The question is not whether LPG has worked—it clearly has. The question is how India builds on this success while gradually reducing long-term costs, import dependence, and emissions.”

Over the past decade, India has made major gains through flagship initiatives such as the Pradhan Mantri Ujjwala Yojana (PMUY) and the rapid build-out of city gas distribution networks. LPG connections doubled from 16.6 crore in 2016 to over 33 crore [TP1.1]in 2025, while domestic PNG connections grew from about 0.33 crore to over 1.6 crore. Yet 37% of Indian households still rely primarily on solid fuels for cooking.

Connection growth has also outpaced fuel use. Domestic LPG consumption grew by 48% between 2015–16 and 2023–24, and annual PNG consumption rose by only 11% between 2021–22 and 2023–24 despite a 40% rise in connections. The gap points to affordability constraints, particularly among low-income and rural households who are unable to rely on LPG or PNG as their primary cooking fuel.

While LPG has expanded access to cleaner cooking for millions of households, it has also increased India’s exposure to international fuel markets. India’s annual LPG consumption more than doubled between 2011–12 and 2024–25, rising from around 15 million metric tons to 31 million metric tons, with more than 93% of this growth met through imports. This reliance on imported fossil fuels heightens fiscal exposure to volatile global prices and raises long-term energy security concerns. The report finds that gradually scaling non-fossil alternatives alongside LPG and PNG offers a pathway to improved affordability, greater energy security, and alignment with India’s long-term climate commitments.

Field research in Punjab, Rajasthan, Uttarakhand, Karnataka, and Delhi shows that decentralized biogas systems can provide a locally available renewable solution in rural areas.

Households adopting biogas reduced firewood use by about 70% annually, improving health and environmental outcomes. Users reported high satisfaction and minimal day-to-day maintenance challenges when reliable operations and maintenance networks and accessible financing are available. Prefabricated models performed well due to faster installation and lower maintenance needs.

Upfront costs remain the main barrier: even with a 40% capital subsidy, household contributions can be prohibitive for many households, stressing the value of additional financial support.

In urban and peri-urban areas, electric cooking is becoming an increasingly competitive option. At current prices, annual cooking costs are estimated at INR 6,800–6,900 annually for LPG or PNG, compared to INR 5,800–5,900 for electric cooking. This cost advantage persists even with a moderate increase in electricity tariffs.

Adoption of electric cooking remains limited due to high upfront appliance costs, cooking habit adaptation, reliable electricity supply concerns, and gaps in repair and maintenance services. Many households currently use electric cooking as a backup rather than a primary cooking option.

The analysis shows that scaling electric cooking in urban areas can reduce LPG demand and imports immediately, even before long-term impacts materialize. Under higher adoption scenarios, urban e-cooking could halve LPG demand by mid-century, significantly reducing import dependence while easing pressure on subsidy budgets.

“While the impact by 2030 may be modest, sustained adoption could deliver significant subsidy savings, potentially up to INR 2.4 trillion by 2050. Over time, these savings could be utilized to further support clean cooking consumption among low-income households,” Mani said.

The report recommends a sequenced and targeted approach to diversification, with LPG and PNG continuing to play a critical role as primary fuel while non- fossil options are scaled through focused policy support.

Key recommendations include:

• targeted incentives to lower upfront costs for electric cooking and biogas technologies.
• redirecting a small share of future LPG subsidy savings to support non-fossil cooking options for low-income households.
• integrating clean cooking diversification into India’s climate, energy security, and public health strategies.
  strengthening after-sales service and local capacity to ensure robust operation and maintenance and sustained adoption of non-fossil clean cooking solutions.

“India’s clean cooking story is a success—but it is also evolving. Including non-fossil cooking solutions now allows the country to protect past gains, reduce future risks, and align clean cooking with a net-zero, fiscally resilient energy system,” concludes Mani.

Media contacts:

Sunil Mani, Policy Advisor, [email protected] 
Madhulika Verma, Senior Communications Officer, [email protected]

December 16, 2025, New Delhi — Government support for fossil fuels in India fell to five times the level of clean energy in financial year (FY) 2024—the smallest gap in 5 years—as clean energy subsidies rose sharply, according to a new report released today.

Clean energy subsidies increased by 31% year-on-year to nearly INR 32,000 crore (USD 3.9 billion) in FY 2024, reflecting continued policy support for renewables, according to Mapping India’s Energy Policy 2025, a report by the International Institute for Sustainable Development.

Fossil fuel subsidies, by contrast, fell by 12%—the sharpest decline since the pandemic—although this drop was driven by temporary price dynamics rather than strategic policy reforms. Together, these trends have helped lift India’s non-fossil electricity capacity above 50% in 2025, 5 years ahead of schedule and a key milestone under India’s updated nationally determined contribution 2.0.

These trends signal progress in energy transition, but sustaining the momentum hinges on diversifying major energy-related public sector undertakings (PSUs). India’s public financial institutions, such as the Rural Electrification Corporation and Power Finance Corporation, are already expanding lending for renewables and distribution reforms. However, among PSUs, total capital allocation remains heavily skewed toward fossil fuels. In FY 2024, 83% of capital expenditure by central energy-related PSUs continued to flow into fossil fuel sectors, including coal mining, refinery construction, and oil and gas development. Clean energy diversification among state-owned enterprises (SOEs) remains limited in scale, raising the risk of locking in energy infrastructure that may not align with India’s long-term climate objectives.

“India’s budget shows encouraging signs of a gradual shift toward clean energy, but larger public financial flows reveal a deeper issue,” said Swasti Raizada, senior policy advisor at IISD and a lead author. “New investments in fossil assets are increasingly moving onto the balance sheets of India’s state-owned enterprises due to weak market signals. As critical state actors in ensuring a just and equitable energy transition, SOEs will need stronger policy signals and robust diversification plans to actively participate in India’s clean energy transition.”

The report also finds that electricity subsidies climbed to an all-time high of INR 2.1 lakh crore (USD 25 billion) in FY 2024—an 18% increase, despite electricity demand growing by only 7%. This widening gap between the cost of supply and consumer tariffs continues to strain state finances, indicating that efficiency gains and financial reforms in the power distribution sector are unable to contain rising subsidy burdens.

At the same time, India continued to rely heavily on revenue from fossil fuels, which brought in nearly INR 9 lakh crore (USD 108 billion)—about 16% of all government revenue across the centre and states. Fossil fuels still make up 90% of the country’s energy-related revenues, through excise duties, VAT, and GST collected on coal. This heavy dependence exposes public finances to global fuel price volatility and makes it harder for governments to create stable, long-term funding for clean energy.

"Fossil fuel use imposes significant social costs, but 79% of India’s fossil fuel tax revenue is paid by consumers,” said Saumya Jain, policy analyst at IISD and co-author. “The recent removal of the GST compensation cess on coal and reduction of taxes on ICE vehicles has diluted the polluter-pays approach. The government should align fossil fuel taxation measures to better reflect social and environmental costs, while exploring other goods and services where tax cuts can increase buying power for consumers. Some of the revenues from higher fossil taxation can be used to scale clean energy.”

The report sets out three priority recommendations to help redirect government support toward clean energy while supporting India’s development goals:

1. Improve targeting of electricity subsidies

   Better subsidy delivery—through smart metering, direct benefit transfers, and performance-linked grants to states—can help maintain affordability while containing fiscal growth in subsidy outlays. These reforms also strengthen distribution company finances and enable renewable energy integration through improved price signals.

2. Guide SOE capital expenditure toward clean energy priorities

   As India expands offshore wind, battery storage, and green hydrogen, SOEs can play a catalytic role by diversifying portfolios, adopting sustainability metrics, and reinvesting in emerging clean-tech supply chains. Shifting a part of SOE capital expenditure from fossil fuel expansion to clean infrastructure can accelerate India’s long-term energy independence goals.

3. Build fiscal resilience through revenue diversification

   Introducing next-generation measures—such as targeted carbon pricing, green taxes, and broader tax-base adjustments—can help gradually reduce reliance on volatile fossil revenues while supporting social and environmental objectives.

Media Contacts:

Swasti Raizada, senior policy advisor,  [email protected] 

Madhulika Verma, senior communications officer, [email protected]