Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

MNRE’s ALMM-II Exemption Extension Eases Solar Project Pipeline While Supporting Domestic Cell Manufacturing Growth

The Ministry of New and Renewable Energy (MNRE) has extended the exemption from the Approved List of Models and Manufacturers (ALMM) List-II requirement for net metering and open access solar projects until December 31, 2026, providing a significant boost to India's commercial and industrial (C&I) solar market. The decision allows these projects to continue using imported solar cells for an additional six months, easing immediate supply constraints while giving domestic manufacturers more time to ramp up production capacity.

Industry stakeholders have welcomed the extension, describing it as a pragmatic move that strikes a balance between sustaining solar deployment and advancing the government's 'Make in India' vision for the solar manufacturing sector. Developers believe the additional window could help unlock up to 10 GW of delayed solar projects, many of which have already secured financing but were facing uncertainty due to the limited availability of domestically manufactured ALMM-compliant solar cells.

The exemption is expected to be particularly beneficial for commercial and industrial rooftop installations, captive power plants, and open access projects, where execution timelines are often affected by financing approvals, grid connectivity, land acquisition, and distribution utility clearances. By allowing greater procurement flexibility during the transition period, developers anticipate improved project execution, reduced procurement bottlenecks, and lower overall installation costs, ultimately benefiting industrial consumers seeking to reduce electricity expenses through solar power.

The extension also provides breathing space for India's rapidly expanding solar manufacturing ecosystem. While the country has already built over 190 GW of ALMM-listed solar module manufacturing capacity, domestic solar cell production remains significantly lower and continues to expand through new investments supported by the Production Linked Incentive (PLI) Scheme and private sector manufacturing projects. Industry participants expect operational cell manufacturing capacity to increase substantially by the end of 2026, helping bridge the current demand-supply gap and enabling a smoother implementation of ALMM List-II requirements.

Several industry experts have noted that the temporary relaxation is not a reversal of policy but rather a calibrated transition. Developers emphasise that ALMM List-II remains an important step toward strengthening domestic value addition, improving supply chain resilience, and reducing dependence on imported photovoltaic components. However, they also stress that the success of the policy will depend on timely expansion of domestic cell manufacturing, competitive pricing, faster certification processes, and transparent approval mechanisms that ensure adequate availability of compliant products before the exemption expires.

From an economic perspective, the extension is expected to moderate procurement costs for eligible projects by reducing immediate pressure on domestic cell supplies. Lower module procurement costs could shorten payback periods for commercial and industrial consumers investing in captive solar plants while maintaining momentum in India's fast-growing distributed renewable energy market. Industry estimates suggest the temporary relief could lower engineering, procurement, and construction (EPC) costs for certain projects by several thousand rupees per kilowatt, depending on project configuration and sourcing strategy.

Looking ahead, developers are seeking greater long-term policy visibility to facilitate investment planning. Open access projects typically require six to eight months from conception to commissioning, making predictable regulatory timelines critical for financing, procurement, and execution. Many stakeholders have recommended a phased implementation roadmap supported by periodic reviews of domestic manufacturing capacity, ensuring that future ALMM compliance aligns with actual market readiness rather than creating supply disruptions.

The extension reinforces the government's broader objective of simultaneously accelerating renewable energy deployment and building a globally competitive domestic solar manufacturing industry. As India works towards achieving 500 GW of non-fossil fuel-based installed electricity capacity by 2030, maintaining a balanced transition between rapid project execution and localisation of the solar supply chain will remain essential for sustaining investment, strengthening energy security, and supporting long-term growth of the country's renewable energy sector.