- Component A = a small grid-connected plant on farmland that sells power to the DISCOM.
- Typical size 0.5–2 MW, built near a substation (verify the current cap).
- You earn from a fixed tariff over a long PPA, not a one-time subsidy.
- Winning the tender needs EMD; after award you post a PBG.
- The two killers are a full substation and a slow-paying DISCOM.
- Every tariff, cost and timeline here is an estimate — verify with the SNA or tender.
PM-KUSUM Component A turns idle or low-yield farmland into a small power plant. For an EPC or developer, it is the closest thing in PM-KUSUM to a normal ground-mount project — but with farmland rules, a DISCOM buyer and a long contract. This guide walks the full path, from finding land to running O&M.
What PM-KUSUM Component A is
PM-KUSUM Component A funds small ground-mounted, grid-connected solar plants on farmer or barren land that sell power to the DISCOM. Plants are typically 0.5 MW to 2 MW (verify the current cap with the SNA or live tender). The plant connects to a nearby 11 kV or 33 kV substation, and the DISCOM buys the output at a fixed tariff for the contract life.
Unlike pumps, there is usually no large subsidy slab here. The value is the long, predictable revenue from the power purchase agreement. See how Component A fits the wider scheme in our components A, B and C guide and the full hub at PM-KUSUM hub.
Who can develop a Component A project
A farmer, a group of farmers, a co-operative, a panchayat, or a private developer can develop a Component A project. In practice, most farmers do not have the cash or skill to build a plant, so they lease their land to a developer who funds and builds it. The owner of record signs the PPA.
The lease route for EPCs
The lease model is the common entry for an EPC. You sign a land lease with the farmer, build the plant, and either keep it or hand it over depending on the tender. This raises the question of who owns the asset — covered in our RESCO vs CAPEX guide and the self-development vs developer mode comparison.
Land and grid rules
The single most important rule is the grid connection. Your plant must sit close to a substation with spare capacity, usually within a few kilometres. If the substation is full, no plant can connect, no matter how good the land is. Check this first.
Land title and lease
The land must have clear title or a valid lease. Barren, uncultivable or low-yield land is preferred so farming is not lost. Read the rules in our land selection rules guide and the contract side in the land lease agreement guide.
Grid connectivity and CEIG
Before commissioning, the plant needs electrical safety approval from the inspector (CEIG/CEI) and a grid connection agreement. These steps gate the acceptance test and first payment — see grid connectivity and CEIG.
How the tariff works
You earn from a fixed tariff set in the tender, paid by the DISCOM for every unit your plant sends to the grid. The lowest evaluated tariff (L1) usually wins the tender, so your bid must cover your cost and still beat rivals. The tariff is locked for the PPA term, so your revenue is predictable if the DISCOM pays.
Tariffs vary widely by state and tender round, and they trend down as solar gets cheaper. Do not assume a national number — confirm the current ceiling and discovered tariff with the SNA or the live tender. The full money model is in Component A tariff economics and the returns calculator.
Step-by-step to build a Component A plant
Here is the end-to-end path, from land to running plant. Each step is a checkpoint where a project can stall, so plan the order carefully.
Find land near a substation
Secure farmer or barren land within the tender radius of a feasible substation. The grid connection point decides whether the project is even possible.
Check grid capacity
Confirm the substation has spare capacity for your plant size. A full substation kills the project before it starts, so check before you spend.
Bid in the SNA tender
Submit your bid with the earnest money (EMD). The lowest evaluated tariff (L1) usually wins, so cost discipline matters.
Sign the PPA
After award, sign the long-term power purchase agreement with the DISCOM at the tendered tariff and submit the performance bank guarantee (PBG).
Build and commission
Construct the plant to MNRE specs, pass the acceptance test, and connect to the grid. Meter and metering rules must match the tender.
Run O&M for the term
Operate and maintain the plant for the contract life, keeping generation and the payment trail clean so the DISCOM keeps paying.
Step order and approvals vary by state — verify the current process with the state nodal agency or the live tender.
Money you must put up
Component A needs real capital before any revenue arrives. You fund the EMD to bid, the PBG after award, and the full plant build, then wait through a long PPA to recover it. This is patient money, not a quick subsidy.
- EMD (earnest money) — submitted with your bid, returned if you lose.
- PBG (performance bank guarantee) — posted after award, held through delivery.
- EPC / build cost — the full plant, to MNRE benchmark cost or lower.
- Land cost — lease rent or purchase, plus the farmer's share if any.
The EMD and PBG mechanics, including liquidated damages for delay, are in EMD and PBG financials. All percentages are set per tender — verify the current figure with the live tender.
DCR, ALMM and technical specs
Your modules and equipment must meet domestic-content (DCR) and approved-list (ALMM) rules and the MNRE technical specification. This area is volatile and litigated — including the Component-C LoA cutoff and the post-1 June 2026 domestic-cell direction — so confirm the rules against the latest MNRE office memorandum before you order any equipment.
Getting this wrong can void your acceptance test and your subsidy or payment. The full picture is in our DCR/ALMM compliance guide and MNRE technical specification.
How developers earn over the PPA
You earn by selling every generated unit at the fixed tariff over the PPA term, often around 25 years. Your return depends on four things: the tariff you won, your build cost, how well the plant performs, and whether the DISCOM pays on time. Strong sun, low cost and a reliable buyer make the project work.
Why payment security decides everything
A plant that generates well but waits months for payment can sink a developer's cash flow. Check the DISCOM's payment record and the security in the PPA — letter of credit, payment security fund, or escrow — before you bid. The detail is in DISCOM PPA payment security.
Risks to manage
Component A is lower-risk than many tenders, but it has its own traps. Manage these from the start.
- Full substation — confirm spare grid capacity before you commit to land.
- Slow DISCOM payment — check the payment record and PPA security.
- Land title disputes — verify clear title or a clean lease.
- Compliance change — DCR/ALMM rules shift; confirm before ordering.
- Delay penalties — liquidated damages bite if you miss the timeline.
How SuryaHub helps with Component A
A Component A project runs for decades, so the paperwork and milestones must be tracked, not kept in someone's head. SuryaHub holds the tender, EMD, PBG, PPA milestones, build schedule and DISCOM payment trail in one place. The project management module keeps construction on the tender timeline, and government workflows tracks each SNA and DISCOM step. SuryaHub is pre-revenue; the only real pilots are Suryantra Energy and RGESPL, and the figures here are scheme facts to verify, not promises.
Run your Component A plant end to end
See how SuryaHub tracks the PPA, build and DISCOM payments.
Related guides
Frequently asked questions
What is PM-KUSUM Component A?+
PM-KUSUM Component A funds small ground-mounted, grid-connected solar plants, typically 0.5 to 2 MW, built on farmer or barren land near a substation. The plant owner sells the power to the DISCOM under a long power purchase agreement at a fixed tariff set in the tender.
How big is a PM-KUSUM Component A plant?+
A PM-KUSUM Component A plant is typically between 0.5 MW and 2 MW. The exact cap and step size are set in each state tender and revised periodically, so confirm the current range with the state nodal agency or the live tender before you plan a project.
Who can develop a PM-KUSUM Component A project?+
A farmer, a group of farmers, a co-operative, a panchayat, or a private developer can develop a PM-KUSUM Component A project. Many farmers lease their land to a developer who funds and builds the plant. The owner signs the power purchase agreement with the DISCOM.
How does a developer earn from PM-KUSUM Component A?+
A developer earns from PM-KUSUM Component A by selling power to the DISCOM at the fixed tariff set in the tender, over the full PPA term of around 25 years. Returns depend on the tariff, the build cost, the plant performance and whether the DISCOM pays on time.
What land do you need for PM-KUSUM Component A?+
PM-KUSUM Component A needs farmer or barren land close to a feasible substation, usually within a few kilometres. The land must have clear title or a valid lease, and the nearby substation must have spare capacity, or the plant cannot connect to the grid.
How does SuryaHub help with PM-KUSUM Component A?+
SuryaHub runs each Component A project from tender to O&M in one place, tracking the EMD, PBG, PPA milestones, construction and DISCOM payments. SuryaHub is pre-revenue; the only real pilots are Suryantra Energy and RGESPL, and all tariffs and costs here are estimates to verify.
Sources & references
Component A rules, tariffs and benchmark costs come from primary government sources. Every tariff, benchmark cost, capacity cap and timeline is set by MNRE and the states and is revised periodically — confirm the current figure with the state nodal agency or the live tender before you bid.
- Ministry of New & Renewable Energy (MNRE) ↗
PM-KUSUM Component A guidelines and benchmark costs.
- PM-KUSUM National Portal ↗
Component A capacity allocation and state progress.
- SECI ↗
Model PPA and Component A tender documents.
Written by the SuryaHub team · reviewed against MNRE, PM-KUSUM portal & SECI sources · updated 19 June 2026.
Method: Component A rules and tariffs are taken from the government sources above and re-checked every 30 days. All tariffs, costs and capacity caps are estimates to verify with the state nodal agency. SuryaHub is pre-revenue; only Suryantra Energy and RGESPL are real pilots.
Change log: 19 Jun 2026 — first published.