March 2023

India is eyeing roughly 280 GW of solar power installations by 2030, to reach its target of 500 GW of clean energy by the end of the decade. While historically much of the country’s installed solar capacity has been based on imported solar cells and modules, the government is now focusing on improving local solar manufacturing for future deployments.

Many efforts and policy initiatives have been taken in this direction including implication of safeguard duties, domestic content requirement for government solar projects, manufacturing-linked solar project development tenders, and more recently imposition of basic custom duties on imported solar cells and modules and production-linked incentive scheme for high efficiency solar modules.

One particular policy intervention that has been a source of some confusion is the Approved List of Models and Manufacturers (ALMM) of solar photovoltaic modules. Introduced to ensure quality of solar panels and the manufacturer’s reliability, only government projects, government-assisted projects, projects under the government, government schemes and programmes had to comply with ALMM initially. Later on, even open access and net metering solar projects had to opt for only those products and manufacturers that were mentioned in ALMM.

Interestingly, the ALMM features only domestic manufacturers, thereby severely restricting solar cell and module import possibilities for project developers. Moreover, the country’s own domestic manufacturing capability is currently inadequate to cater to the industry’s needs raising concerns about future solar capacity deployments.

Thus, to address these concerns, the Ministry of New and Renewable Energy recently announced that ALMM is in abeyance for one financial year and all solar projects that are commissioned by March 2024 will be exempted from the requirements of procuring solar modules that comply with ALMM.

This new order is expected to bring much needed relief, though temporary, to the solar industry by allowing developers to source imported solar cells and modules for their solar projects.