Even though the government’s decision to include solar cells — and not just PV modules — under the Approved Lists of Models and Manufacturers (ALMM) starting June 1, 2026, but may in the short term inflate delivered costs of domestic modules, drive up the capital cost of projects and affect timelines, analysts say.
Additionally, high prices of domestically manufactured cells can be a bane because they would tend to impact the tariff levels bid at solar power project auctions, according to Crisil Market Intelligence and Analytics.
Also ReadAccenture lifts FY25 growth forecast; signals trends for Indian IT sector
The industry experts believe that while the domestic supply of solar cells is expected to increase, there could be a transient shortfall till manufacturing ramps up.
Also Read Solar startup SolarSquare raises $40 million from Lightspeed, Lightrock, others Waaree Energies receives LoA for development of 170 MW solar power plant in Madhya Pradesh Gautam Solar plans to raise Rs 1,000 crore via IPO for solar cell manufacturing unit Waaree Energies to set up 11.4GW solar cell capacity by FY27
As per Crisil, the prices of Indian solar cells today are 1.5-2.0 times more than alternatives from China even after basic customs duty. “Such high prices can drive up the capital cost of solar power projects by Rs 5-10 million per MW and require tariff increase of 40-50 paise per unit as offset based on current market dynamics,” it said.
CareEdge Ratings too noted that the introduction of ALMM-II for domestic cells may result in an increase in the delivered cost of domestic modules by 6-7 cents per Watt-Peak, leading to a rise in solar tariffs by 40-50 paise per unit for the short run till local cell supply scales up.
Analysts also say that the ALMM cell mandate could also pose challenges for companies that don’t develop domestic cell manufacturing capability as they would not be in compliance and could face module-supply challenges, which can impact their market share over the long term.
“Of the 62 GW of installed capacity as of December 2024 owned by 79 entities, only 13 have an integrated cell manufacturing base. The rest will have to decide between expanding capacity or competing for domestic cell supplies,” said Surbhi Kaushal,
» Read More
