As Govt Reimposes ALMM, New Challenges Emerge For Solar Industry

ALMM Reimposition To Temporarily Slow Down Solar Market, Say Experts

Approved List of Module Manufacturers (ALMM) reimposition in India by the Ministry of New and Renewable Energy (MNRE) has led to speculations in the solar industry ranging from solar module manufacturers, and developers to other stakeholders. The ministry had earlier kept it in abysence for a few years to allow the domestic solar market to mature to cater to domestic requirements.

Notwithstanding the longer demand of the Indian solar industry to reimpose it in its original form, concerns are now also high for the industry on the immediate impacts. Although the Indian solar module manufacturers have mostly welcomed the move. The reimposition of ALMM is now all set to create an additional ‘non-tariff’ barrier against the imports of Chinese modules. Tanmoy Duari, Chief Executive Officer (CEO) of Axitec Energy told Saur Energy that the move is likely to create a temporary slowdown in the Indian solar module. He however said that the recovery would be made sooner.. 

“In assessing the current impact of the Approved List of Models and Manufacturers (ALMM), it’s evident that this initiative will temporarily slow down the market due to existing constraints in manufacturing capacity for meeting the demand in solar module supply. However, this challenge is anticipated to be addressed within the next 6 to 9 months,” he told Saur Energy.

In the long term, he said that this move is poised to be beneficial, catalyzing existing manufacturers to expand their production capabilities. Furthermore, it presents a significant opportunity for manufacturers, given the broad demand for modules, he said.

Capt. Ishver Dholakiya, Founder of Gujarat-based module manufacturer-Goldi Solar said that the reimposition of ALMM was a significant step towards strengthening the domestic solar manufacturing sector. “It underscores the government’s commitment to energy security and consumer protection by ensuring approved, high-quality solar PV modules and cells are used in government projects. This move is expected to bolster stakeholders’ confidence in the reliability of domestic products and support the industry’s growth trajectory,” Dholakia told Saur Energy.

The entrepreneur said that the domestic manufacturing sector is maturing at a promising pace, with the nameplate manufacturing capacity for solar photovoltaic (PV) modules projected to reach self-sufficiency levels by 2026. 

“The future of Chinese module and cell makers in the Indian market will likely be shaped by the evolving regulatory environment and the increasing competitiveness of Indian manufacturers. Therefore, it’s crucial for Indian module makers to understand the ALMM and align their strategies with the national vision for renewable energy. The recent updates to the ALMM list provide a clearer roadmap for compliance and participation in government projects,” Dholakia added. 

Price Challenges 

Duari from Axitec said that from a cost perspective, the imposition of high duties and taxes results in minimal price disparity between Chinese and Indian modules (approximately 0.25 to 0.5 paisa per watt-peak). He said that advancing Indian manufacturing could mitigate supply chain challenges, fostering consumer trust and confidence in domestic manufacturers. 

“This shift is expected to foster positive cost competition within the Indian market, facilitating exponential growth. Taking this into account, it’s foreseeable that ALMM will substantially diminish Chinese dominance within the Indian solar market over the next 1 to 2 years,” Duari added. 

As per the MNRE’s latest ALMM List, India’s total enlisted capacity stands at around 37 GW. There are around 80 enlisted local manufacturers of solar modules in the country.

Concerns for the developers

A solar developer told Saur Energy that the impact on ALMM is likely to be felt by the developers directly who have a direct business relationship with the module manufacturers in the commercial projects or working as Independent Power Producers (IPP). With the discouragement against Chinese imports, triggered by the new order on ALMM developers dealing in government projects fear higher prices of domestic modules and the ability of local producers to cater to the demands in the country for such projects.

India’s push for local manufacturing 

Besides the latest imposition of the ALMM, there are several other policies and new schemes that are set to give an impetus to domestic solar module manufacturing in the country. This comes at a time when most of the Indian solar module manufacturers are dependent on China for solar cells, ingots and wafers for the backward linkages to produce a solar module. On one side the ALMM will mandate the government-funded projects to use locally produced solar modules.

On the other hand, the newly launched ambitious PM Surya Ghar Muft Bijli Yojana, specially crafted for the residential rooftop segment mandates the use of DCR (Domestic Content Requirement). The scheme also is set to prompt the local industry to produce more locally-made modules. This is in addition to other government schemes like PM-KUSUM which also mandates DCR obligations. The PLI scheme is another scheme of the government that has promised more local production with better backward integration if the plants are set to manufacture modules in India.