MSKVY 2.0 Explained: Maharashtra's Feeder Solarisation Scheme and the Two Ways In

Maharashtra runs one of the largest agricultural power loads in the country - around 45 lakh agricultural connections drawing roughly 22% of the state's electricity, much of it supplied at night and at deeply subsidised tariffs. The Mukhyamantri Saur Krushi Vahini Yojana 2.0 is the state's structural answer: put solar generation next to the substations that feed farms, and shift agricultural supply to daytime.

With applications now open, this is what the scheme contains, how the two allocation routes differ, and what a developer needs before applying.

MSKVY 2.0 at a glance

What the scheme is, and why it exists

Maharashtra first launched MSKVY in June 2017, allowing decentralised projects of 2 to 10 MW within a 5 km radius of agriculture-dominated substations. In May 2023 the state reframed it as MSKVY 2.0, widening the project band to 0.5-25 MW and the siting radius to 5-10 km, and setting a Mission 2025 objective of solarising 30% of agricultural feeders through 7,000 MW of fast-track capacity. A subsequent government resolution in September 2024 raised the target to 16,000 MW, making it among the largest distributed solar programmes in the country.

The rationale is not primarily environmental. Four structural pressures drove it:

• Subsidy and cross-subsidy burden. Agricultural supply at subsidised rates is funded partly by higher tariffs on commercial and industrial users, which weighs on both MSEDCL's finances and the state's industrial competitiveness.
• Night-time supply. Load management pushed farm feeders to night-time energisation, requiring farmers to irrigate in unsafe and inconvenient conditions.
• Power purchase cost. MSEDCL needed cheaper generation to bring down its average cost of supply.
• Renewable obligations. The utility must meet Renewable Purchase Obligations, including a distributed renewable component that feeder-level solar directly serves.

Siting generation next to load addresses all four simultaneously, and reduces transmission and distribution losses in the process. It is worth noting that MSKVY 2.0 was originally structured under Component C of the central PM-KUSUM programme but has since been de-linked, and now runs as a state scheme with its own tariff and procurement framework.

The two routes to capacity

Both routes end at the same place - a 25-year Power Purchase Agreement (solar PPA) with MSEDCL, with performance security of ₹5 lakh per MW. They differ in how capacity is allocated and how the tariff is set.

Competitive bidding

The original and continuing route. MSAPL and MSEDCL float tenders, substation-wise or in clusters, and the tariff is discovered through an e-reverse auction under a MERC-approved ceiling. The lowest bidder wins the capacity. The ceiling tariff was revised down to ₹2.90 per unit in 2026, and recent rounds have cleared below that.

The MoU route

To move the remaining capacity toward the 16,000 MW target without waiting on successive auction cycles, MSEDCL opened an MoU route allocated on a first-come, first-served basis. A developer proposes a capacity at an identified substation and, subject to meeting the scheme's criteria, signs an MoU and proceeds toward a PPA. The tariff is MERC-determined and fixed rather than bid. Applications are made online through MSEDCL's MSKVY 2.0 MoU Route portal, and applicants must clear a financial eligibility gate covering net worth and liquidity per MW.

Side by side

Evaluating a substation or parcel for MSKVY 2.0? Send us the district, target substation and approximate land available - Talk to our team.

One regulatory point worth knowing

MERC has been explicit that competitive bidding remains the norm for power procurement, and that the MoU route - adopted to give MSKVY 2.0 momentum - should not be treated as a precedent for future renewable procurement. The Commission has also raised concerns about the pace of contracted capacity actually reaching commissioning.

For a developer, that has a practical implication in both directions. It means the MoU window should not be assumed to remain open indefinitely, which argues for readiness rather than deliberation. It also means allocations obtained through it are likely to be scrutinised on execution, so a developer who takes capacity and then stalls is more exposed than the low headline barrier to entry suggests.

What a developer actually needs

Neither route is won on paperwork alone. Across both, the same four things determine whether an allocation converts into a commissioned asset.

Site control near a viable substation. The siting radius is narrow, and the substations with available capacity are published. Land within that radius must be aggregated, title-clear and suitable - which in practice usually means a solar power plant on agricultural land, with the conversion and tenure questions that brings.

Evacuation certainty. Available bay capacity at the target substation is the constraint that most often kills otherwise sound projects. It should be confirmed before land is committed, not after.

A defensible generation and cost model. With the tariff fixed under the MoU route and bid-compressed under the auction route, returns are determined almost entirely by landed cost and yield. A properly built DPR - resource assessment, geotechnical picture, single-line diagram, generation estimate - is what makes the financing case, and engaging a solar DPR consultant early is the cheapest risk reduction available.

An execution route that fits the portfolio. MSKVY projects are usually multiple ground-mount sites rather than one large plant, which changes how procurement and construction are best structured. Our comparison of solar EPC and EPCM delivery models covers the trade-offs in detail, including when a ground mounted solar EPC approach or an EPCM service fits better.

Where projects stall

• Land aggregated before substation bay capacity was confirmed.
• Title and conversion issues on agricultural parcels surfacing after the MoU is signed.
• Bank guarantee mechanics - the e-BG process has specific documentation requirements that delay otherwise complete applications.
• Underestimating the interconnection scope, which sits outside the solar plant but inside the schedule.
• Treating a fixed tariff as a guaranteed return without stress-testing generation assumptions.

Working on an MSKVY 2.0 project?

SLNKO Energy is an engineering-led EPCM and PMC partner with over 10 GW of solar capacity delivered across 19 states, including work under PM-KUSUM and other government programmes. We support substation and site evaluation, DPR and pre-bid engineering, EPCM execution, public sector PMC and long-term O&M.

Evaluating a substation or a parcel?

Send us the district, target substation and approximate land available. We will come back with an indicative view on viability before you commit capital. Talk to our team.

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Official scheme resources: MSEDCL MSKVY 2.0 portal · MoU route application portal

Frequently Asked Questions

Scheme terms, tariffs and eligibility criteria are set by MSEDCL and MERC and are subject to revision. Verify all figures against the official scheme documents before making commercial decisions. Figures current as of 5 August 2026.