MNRE Softens, Extends ALMM Compliance Date to October 1, 2022 for Open Access, Net Metering Projects

In a major effort to reconcile the demands of developers vis a vis domestic manufacturers, the Ministry of New and Renewable Energy (MNRE), in a fresh office memorandum yesterday (March 28), has extended the start date of compliance with ALMM list for all open access and Net metering projects to October 1, 2022, from April 1, 2022 earlier.

The move follows multiple representations and assertions by both sides of the debate, especially the developers side, which last made its stand clear on Monday through DiSPA. While developers have contended that open access projects by their very nature do not get any government subsidies on equipment, MNRE’s stated position on the issue had been that these do benefit from preferential rates or exemptions on specific fees, which was as good as a subsidy. However, with corporate investment in renewables picking up sharply, it is clear that the ministry has seen some logic in allowing these projects some more time before forcing ALMM compliance on them. Keep in mind that by October this year, some more capacity of more ‘modern’ solar modules, mostly Mono PERC should be coming online, which, the MNRE clearly hopes, will take away the major argument of developers of being forced to settle for older technology in the form of polycrystalline modules.

For domestic manufacturers, the decision is a blow, although not wholly unexpected, it has to be said. When the requirement of using only ALMM approved products for open access, Net metering and PM KUSUM component A projects was first propounded, we had noted a degree of surprise in some of these manufacturers. Possibly, even they realised the challenge of immediate benefits from developers who had already placed orders elsewhere, or had access to domestic inventory of imported stocks.

The ALMM list has been touted as a key non-tariff barrier to support domestic manufacturing by the MNRE through its Minister, Sh. R.K. Singh. Till date, the list has no foreign manufacturer approved for selling solar modules.