Is ALMM List a Win for Solar Industry?

The ALMM List is expected to boost India's solar manufacturing by creating trade barriers against foreign competition, enhancing local production, and supporting renewable energy goals despite potential initial challenges.

August 07, 2024. By EI News Network

The Approved List of Models and Manufacturers (ALMM) by the Ministry of New & Renewable Energy (MNRE) is being hailed as a transformative move for India’s solar energy sector. The ALMM list was recently updated, which is expected to boost local production and support India’s renewable energy goals.

According to the government, the need for such an order arose from the necessity to ensure the long-term reliability of solar PV installations, which can last up to 25 years. This requires verifying the authenticity of production facilities. In response to these concerns, the MNRE issued the 'Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirement for Compulsory Registration) Order' in 2019. This order introduced the ALMM, which includes LIST-I for solar PV modules and LIST-II for solar PV cells. While the initial ALMM list for modules was released on March 10, 2021, the list for cells is still pending.

Industry leaders are characterising the ALMM list as a 'game-changer' for the domestic industry; as Gautam Mohanka, CEO of Gautam Solar, put it, “The ALMM list is set to offer significant advantages to domestic solar manufacturers. It establishes a trade barrier against foreign competition and levels the playing field between domestic and imported solar modules. This shift not only promotes the growth of local manufacturing capabilities but also aims to boost domestic production capacity from 40-45 GW to 80-100 GW by 2026.” He emphasised that the new list will enhance domestic manufacturing and improve India’s position in the global solar market.

Anurag Garg, CEO of Jakson Solar, echoed Mohanka’s sentiments, focussing on the protective aspect of the ALMM. “The ALMM safeguards manufacturers against foreign competition, especially with the Basic Customs Duty (BCD) on imported modules,” Garg stated. He noted that while the ALMM and BCD have reduced the cost gap between domestic and imported modules, this may initially raise project costs.

However, he is optimistic that over time, this will foster a competitive domestic industry, potentially stabilising and lowering prices as manufacturing scales and efficiencies improve. “A predictable policy environment and assurance of quality may attract more investment into the sector, potentially offsetting higher initial costs,” added Garg.

Onkar Singh Rajpurohit, Business Head at Solar Pulse, a Solar EPC firm based in Jodhpur, expressed optimism about the ALMM. He stated, “If domestic manufacturers produce high-quality solar cells that meet global standards, this could significantly advance the solar industry in India.”

Rajpurohit highlighted that the ALMM could boost local manufacturing, enhance production capacity, create jobs, and stimulate economic growth. He noted that focussing on high-quality products would help Indian manufacturers improve global competitiveness, reduce dependence on imported solar cells, and foster self-sufficiency, thereby lowering trade deficits.

He also emphasised that the ALMM could drive innovation and research, supporting the 'Make in India' initiative and enhancing India’s role as a manufacturing hub. This, in turn, could attract more investments in the solar sector. “For success, Indian manufacturers must meet global quality standards, offer competitive pricing, and scale up production to meet growing demand and compete internationally,” Rajpurohit added. He stressed the importance of significant efforts in skill development, speed, and scaling while upholding high international quality standards.

While the ALMM is generally seen as beneficial, it also introduces certain challenges. It is believed that the requirement to use only ALMM-approved modules may restrict developers' choices and hinder the adoption of potentially cost-effective or innovative technologies.

Interestingly, Tapasvi Patel, a local developer in Gujarat, admitted he was unfamiliar with the ALMM, as he stated, “We are not aware of ALMM, but we use modules from well-known companies. They offer warranties, and users can address any issues with them directly.” He also discussed small-scale module manufacturers, noting, “They often do white labelling,” and added, “These small-scale manufacturers produce for larger firms and label the products accordingly. However, the larger firms ensure thorough quality checks on these modules.”

Commenting further, Mohanka remarked, “While we are dedicated to producing high-quality solar panels, the new compliance requirements might restrict flexibility for developers and could potentially cause project delays due to supply constraints.”

Garg expressed similar concerns, stating, “The rapid expansion needed to achieve India’s renewable energy targets could strain domestic manufacturers, leading to possible project delays. Additionally, the complex approval processes and compliance requirements increase the administrative burden for developers.”

Thus, while the ALMM list presents both benefits and challenges, it has garnered mixed feedback across the sector. Manufacturers view it positively as it protects their market share from foreign competition, while industry experts are also concerned about limitations on flexibility and the risk of supply delays. Government and policy advocates see the ALMM as a crucial element in promoting national self-reliance and ensuring quality in renewable energy projects. Each perspective highlights the complex balance between immediate industry needs and long-term energy goals.

Garg summarised the prevailing sentiment, as he said, “Overall, the ALMM is a critical component of India’s strategy to build a robust domestic solar manufacturing industry, essential for achieving its renewable energy goals. While it presents certain challenges, the long-term benefits of creating a sustainable and self-sufficient solar ecosystem could significantly outweigh the initial hurdles.”

Mohanka concurred, stating, “The ALMM is vital for achieving our ambitious sustainability targets and fostering a self-sufficient solar industry.”

Looking ahead, industry experts believe the ALMM could become more manufacturer friendly by adopting less stringent rules and addressing regional imbalances. By reducing compliance burdens and enhancing support for regions with limited manufacturing infrastructure, the ALMM has the potential to drive growth in the solar sector. Addressing these issues could promote more inclusive and balanced development across various regions, ultimately strengthening the domestic solar industry and supporting its long-term development.

However, despite the ALMM List, India’s solar sector will still rely heavily on imports for solar PV cells and wafers due to the country's limited cell manufacturing capacity and lack of wafer production facilities. Experts believe that establishing fully integrated manufacturing units, as promoted under the Production-Linked Incentive (PLI) program, is essential. These units aim to reduce reliance on imports by boosting domestic production capabilities, thus supporting the sector’s long-term growth and sustainability.

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Approved List of Models and Manufacturers

ALMM list by MNRE

India solar energy sector

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