India's New Solar Rules Come Into Force: ALMM List-II Set to Boost Domestic Manufacturing but Raise Costs - Government Enforces Domestic Solar Cell Sourcing From June 1, 2026

India's solar industry entered a new phase on June 1, 2026, as the Ministry of New and Renewable Energy (MNRE) implemented the Approved List of Models and Manufacturers (ALMM) List-II requirement for solar photovoltaic (PV) cells. The policy mandates that solar projects covered under ALMM use only domestically manufactured solar cells sourced from government-approved manufacturers.

The move is part of India's broader strategy to strengthen domestic solar manufacturing, reduce dependence on Chinese imports, and build a self-reliant renewable energy supply chain.

What Is ALMM List-II?

The Approved List of Models and Manufacturers (ALMM) framework was introduced by MNRE to ensure quality, reliability, and traceability in India's solar sector. While ALMM List-I governs approved solar module manufacturers, ALMM List-II covers approved solar cell manufacturers. From June 1, 2026, only solar modules manufactured using cells from ALMM List-II can be deployed in eligible projects.

The mandate applies to government-supported solar projects, net-metering installations, and open-access renewable energy projects, significantly expanding the scope of domestic sourcing requirements.

Why India Is Tightening Solar Import Rules

India has historically relied heavily on imported solar cells, with a significant portion of supplies originating from China. While domestic module manufacturing capacity has expanded rapidly, solar cell manufacturing has lagged behind, creating dependence on foreign suppliers.

The government believes ALMM List-II will:

• Strengthen India's solar manufacturing ecosystem.
• Encourage investments in solar cell production.
• Improve quality and reliability standards.
• Reduce import dependence and enhance energy security.
• Support India's long-term renewable energy goals.

Rooftop Solar Installations Likely to Become More Expensive

While the policy benefits domestic manufacturers, it may increase costs for consumers and project developers in the near term.

According to industry estimates, domestically manufactured solar cells currently command a premium over imported alternatives. As a result, rooftop solar installation costs could rise by approximately ₹3,000 per kilowatt (kW) following the implementation of the new rules.

For residential consumers considering rooftop solar systems, the increase may slightly extend payback periods, although government subsidies and long-term electricity savings continue to make solar installations economically attractive.

Industry Concerns: Capacity Constraints and Supply Shortages

Despite broad support for the government's localization agenda, industry stakeholders have expressed concerns regarding domestic cell availability.

Several industry bodies have warned that India's current solar cell manufacturing capacity may not fully meet demand immediately after implementation. Estimates suggest that annual demand significantly exceeds current operational domestic cell capacity, creating the risk of supply shortages and project delays.

Developers have sought extensions to the implementation timeline, but MNRE has clarified that there will be no blanket extension beyond June 1, 2026. Relief will be considered only on a case-by-case basis for projects where substantial investments have already been made.

Key Beneficiaries of the New Solar Policy

The ALMM List-II implementation is expected to benefit Indian solar manufacturers that have invested aggressively in integrated solar manufacturing capacity.

Companies expanding solar cell production capabilities stand to gain from increased demand and stronger pricing power as project developers shift toward domestic sourcing. The policy also aligns with India's Production Linked Incentive (PLI) scheme, which aims to build a globally competitive solar manufacturing ecosystem.

Outlook

The implementation of ALMM List-II marks one of the most significant policy shifts in India's renewable energy sector in recent years. While the transition may lead to higher costs and short-term supply challenges, the policy is designed to accelerate the development of a domestic solar manufacturing value chain and reduce strategic dependence on imports.

For investors, manufacturers, and renewable energy developers, the coming years will reveal whether India's solar manufacturing ecosystem can scale quickly enough to support the country's ambitious clean energy targets while maintaining cost competitiveness.

Source: http://ndtv.com/business-news/rooftop-solar-panel-june-1-new-rules-india-manufacturing-higher-price-china-imports-renewable-energy-11573804