New Delhi: India’s solar industry entered a new phase on June 1 as the government implemented stricter sourcing norms requiring solar projects under net-metering and open-access arrangements to use only domestically manufactured solar cells. The move is aimed at strengthening India’s solar manufacturing ecosystem and reducing dependence on imported components, particularly from China.
Under the revised regulations, solar modules installed in eligible projects must contain cells sourced exclusively from manufacturers approved under the government’s Approved List of Models and Manufacturers (ALMM) List-II. The rule applies to rooftop solar installations, including those under the PM Surya Ghar: Muft Bijli Yojana, as well as open-access projects used by commercial and industrial consumers.
The government says the policy will encourage investment in domestic solar cell production and help create a self-reliant clean-energy supply chain. While India has developed an annual solar module manufacturing capacity of nearly 200 GW, domestic solar cell production remains significantly lower at around 30 GW, resulting in continued reliance on imports.
However, industry experts warn that the transition could lead to higher costs for consumers. Estimates suggest rooftop solar installations may become around Rs 3,000 per kilowatt more expensive due to the higher cost of locally manufactured cells. For a typical 5-kW residential system, this could increase installation expenses by approximately Rs 15,000.
Smaller solar manufacturers have expressed concerns over potential supply shortages and rising costs, as many depend on imported cells and do not have integrated production facilities. Industry representatives fear that limited domestic supply could strengthen the market position of larger manufacturers while placing financial pressure on smaller players.
Despite these concerns, several industry stakeholders support the policy, arguing that temporary challenges are necessary to build a robust domestic manufacturing base. They believe the new mandate will ultimately strengthen India’s renewable energy sector and reduce long-term dependence on foreign suppliers.
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