Inclusion Of Solar Cells Under ALMM Will Drive Up Manufacturing Costs In Short-to-Medium Term

The government’s plan to bring solar cells in the approved list of models and manufacturers (ALMM) from April 2026 is expected to increase costs for existing solar panel manufacturers in the short-to-medium term, according to experts and company officials. Under this rule, manufacturers listed in the ALMM will be required to source their cells only from producers included in ALMM List II or they must invest in new cell production lines.India currently produces only 6 GW of cells, while the module manufacturing capacity has grown to 60 GW. Two years ago, this capacity was just 20 GW, but bringing the solar modules under ALMM helped India raise it to the present level. However, experts and officials from the industry believe expanding the domestic solar cell capacity by bringing the solar cells under ALMM will face significant challenges.Indian manufacturers have lined up capital for setting up module capacities, but bringing cells under ALMM will necessitate sourcing from Indian manufacturers alone or setting up new production lines that they had not planned for initially..Adani Wins Bid To Supply 6,600 MW Hybrid Solar And Thermal Power In Maharashtra.“In India, the cost of producing cells from wafers imported from China is very high, compared to the cells prepared in China. The cost in India comes to around 12 cents/watt peak due to higher conversion costs compared with 4 cents/watt peak in China,” said Manish Narula, executive vice president of Jinko Solar India, one of the top five producers of solar modules in the world, from China.He said the cost of domestic solar panels with Chinese cells is around 15-17 cents/watt peak that jumps to 27 cents/watt peak if domestic panels use domestic cells, making the panels extremely costly and unviable.Another important aspect that government needs to consider is the long gestation period of commissioning new cell plants. It may take anywhere between 18-24 months for the plants to get commissioned, and another six months to get the ALMM approval. Hence, one should be mindful of the 2030 target of 500 GW of renewable capacity before hastening into any policy initiative, he said.As per the draft amendment to the ALMM Order for Implementation of ALMM for Solar PV cells issued on September 7, from April 2026 onwards, no modules or cells can be sourced from China or foreign countries for government projects, unless the models and manufacturers are approved under List-1 and List-2 of ALMM.As of now there are no foreign entities listed under ALMM List-1 for module manufacturing. The Jinko Solar plant in China was inspected and approved in February but has not been included in the list as of now.Finding a balance between domestically manufactured products and accelerating the pace of solar adoption is critical to time the implementation of ALMM policies, according to Gautam Das, founder and chief executive officer of Oorjan Cleantech. "Given the enhanced momentum of renewable energy adoption, this policy should be enforced gradually, coupled with Production Linked Incentive, to the manufacturers. The demand-supply sensitivity is the key in such implementation, to ensure that adoption of green power is not the victim.".Adani Green Energy Poised To Grow Over Five Times In Six Years, Says Investec.Given India’s present low cell manufacturing capacity at 6 GW, and assuming India adds 12-15 GW of new capacity till March 2026, it would still fall short by 10-15 GW to meet the annual expansions planned by 2030. “I believe India will have to increase the deadline by 12-18 months, as it will fail to achieve the required capacity by March 2026. Besides, the plants, after commissioning, take at least a year to stabilise production which will add to the pressure on companies,” Tanmoy Duari, CEO of Axitec Energy India, said.He added cell manufacturing, unlike modules, is capital intensive and cannot be set up anywhere, as it requires continuous supply of water and corresponding government clearances. Also, any cell plant would require three to four highly qualified professionals, potentially with Phds across respective sciences, to manage the process. “I believe we do not have that type of talent as of now for the cell plants and would take some time to create that type of ecosystem,” Duari said.Going ahead, experts believe government intervention to prevent domestic cell manufacturers from driving up prices would be required, especially with solar cell production capacity far below demand. Without intervention, India's dream of achieving 500 GW of renewable energy by 2030 could be at risk, experts said..RMC Switchgears To Develop Solar Power Project In Maharashtra

Inclusion Of Solar Cells Under ALMM Will Drive Up Manufacturing Costs In Short-to-Medium Term

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP

Inclusion Of Solar Cells Under ALMM Will Drive Up Manufacturing Costs In Short-to-Medium Term

Choose a plan

Follow Us

DOWNLOAD THE APP