Is PM KUSUM 2.0 Set to Redefine India’s Renewable Energy Growth Cycle?
About The Renewable Energy Push And Budget Context
India’s renewable energy roadmap appears poised for a meaningful acceleration in the upcoming Union Budget, with policymakers signalling a renewed focus on decentralised solar, agricultural energy security, and private sector participation. At the centre of this strategy lies the proposed next phase of the PM KUSUM scheme, widely referred to as PM KUSUM 2.0. With the existing scheme scheduled to lapse in March 2026, the forthcoming Budget is expected to lay the foundation for the next multi-year expansion cycle.
Sources indicate that the Ministry of New and Renewable Energy has already submitted a comprehensive proposal to the Finance Ministry, outlining higher incentives, reduced compliance friction, and the inclusion of new technologies. The intent is not merely capacity addition, but structural transformation of how solar power integrates with agriculture, rural infrastructure, and grid stability.
What PM KUSUM Has Achieved So Far
🔹 Phase 1 allocation of approximately ₹32,400 crore.
🔹 Targeted creation of nearly 35 GW of solar capacity.
🔹 Incentives for decentralised grid-connected solar plants.
🔹 Support for solar pumps and feeder-level solarisation.
The first phase of PM KUSUM laid the groundwork for decentralised energy generation by aligning farmer income, rural electrification, and renewable capacity goals. However, execution challenges, financing bottlenecks, and technological limitations constrained the pace of adoption. PM KUSUM 2.0 is expected to directly address these gaps.
Market participants tracking renewable-linked stocks often position tactically using a Nifty Trend Call once policy clarity emerges in the Budget speech and subsequent notifications.
Key Expectations From PM KUSUM 2.0
| Focus Area | Likely Direction |
|---|---|
| Budget Allocation | Crossing ₹50,000 crore |
| Technology | Battery storage integration |
| Participation | Higher private sector involvement |
One of the most significant proposed shifts is the inclusion of battery storage. This could fundamentally change the economics of decentralised solar by enabling load balancing, improving grid reliability, and expanding usable solar hours. If implemented effectively, this move would mark a strategic evolution from capacity creation to energy reliability.
Strengths🔹 Strong government policy backing 🔹 Alignment with energy security goals 🔹 Rural income and employment linkage |
Weaknesses🔹 Execution complexity at state level 🔹 Financing and subsidy disbursement delays |
Another critical element under discussion is the reduction of compliance burdens to attract private developers. Simplified approvals, standardised contracts, and predictable incentive structures could significantly improve project viability and attract long-term capital into the decentralised renewable space.
Opportunities🔹 Scale-up of decentralised solar 🔹 Battery and storage ecosystem growth |
Threats🔹 Policy execution delays 🔹 Cost overruns in new technologies |
From a market perspective, renewable energy policy continuity provides visibility rather than immediate trading triggers. Valuations tend to re-rate over time as execution confidence improves, order books expand, and return ratios stabilise. Short-term volatility around Budget announcements often fades as clarity replaces speculation.
Investment And Market View
PM KUSUM 2.0, if executed as envisaged, could become one of the most structurally impactful renewable initiatives of the decade. Investors should focus on execution capability, balance sheet strength, and technology readiness rather than headline allocation numbers. Tactical exposure may be balanced using a BankNifty Trend Call during broader market consolidations.
Investor Takeaway
Derivative Pro & Nifty Expert Gulshan Khera, CFP®, believes PM KUSUM 2.0 represents a structural policy shift rather than a short-term stimulus. Investors should assess renewable opportunities through the lens of execution discipline, technological integration, and long-term capital efficiency instead of reacting to Budget headlines. A calibrated, patient approach is likely to benefit most as India deepens its renewable transition. More structured market insights are available at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on PM KUSUM And Renewable Energy
What is PM KUSUM 2.0?
How does PM KUSUM impact renewable stocks?
Why is decentralised solar important for India?
Will battery storage change solar economics?
How should investors approach renewable policies?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
