ALMM Of PV Cell Manufacturers In 18 Months, Proposes MNRE

The Ministry of New and Renewable Energy, in an office memorandum issued on September 7, has proposed extending the ALMM (Approved list of module manufacturers) conditions to solar PV cell manufacturing as well. Thus, it proposes that from April 1, 2026, much like the requirement to source modules only from manufacturers enlisted in ALMM, solar projects post that date will need to source cells as well from manufacturers listed under List II, or a list of solar PV cell manufacturers. The last date for comments is October 6, 2024. The email id to send your perspective is [email protected], belonging to Sanjay Karndhar, Scientist-E.

Inviting comments before it notifies the proposed changes formally, the ministry has reasoned that over the coming two years, India’s solar PV cell manufacturing landscape would change significantly with new capacity, and to that extent, fears of shortages or quality of cells should not surface by then.

Presently, with total cell manufacturing capacity of just around 7 GW, most module manufacturers in ALMM as well import cells mostly from China. However, with cell manufacturing capacity a priority for virtually every manufacturer with a capacity over 2 GW for module manufacturing in India, there is every possibility that cell making capacity will top 20 GW by this financial year end, and possibly even 40 GW by the Financial year 2026 end. That would seem to indicate enough capacity to meet domestic requirements at least to 2030. Thus, manufacturers could lean on cell imports for their modules earmarked for exports, besides some domestic off grid projects, if at all.

For developers however, the risk of higher prices will remain, as domestically made cells already command a massive premium over imports, leading to a cascading effect on module prices as well. That is down to a lot of factors, not least of which is the size of the cell manufacturing set up in India versus that in China at almost 600 GW. A reversal of the current market price trends in China towards lower prices, especially in wafers (the precursors to cells), where India will continue to depend on imports, highlights the risks of higher prices post 2026.

That would mean at least sparing solar wafer imports from the kind of duties cell imports have been subjected to (25% currently), as catching up on domestic wafer manufacturing is a much more tougher grind for Indian manufacturers, with little hopes of crossing even a 12 GW figure for wafers by 2027 end.

In the longer term, there is the still more vexing question of how long ALMM itself can be used as a non-tariff barrier for the Indian market, Post 2030, when many similar initiatives in the US like the IRA, or the European green deal starts winding down, one can be sure that the ALMM will also be in the spotlight of global trade negotiators. To that extent, manufacturers investing in the security of protection through ALMM for their cell manufacturing investments will need to do so with a clear vision of life post 2030, and the need to be globally competitive.