Despite significant concerns raised about potential price inflation and market concentration, the Ministry of New and Renewable Energy has reinstated its directive requiring solar projects to source modules solely from a government-approved list of domestic manufacturers, effective April 1.
The decision to reimpose the Approved List of Models and Manufacturers (ALMM) order comes amidst criticism from high-level officials regarding the risk of excessive profiteering by domestic producers. Former Union Minister of Power and New and Renewable Energy, along with central public sector enterprise SJVN Ltd, had expressed concerns that such a mandate could result in inflated household electricity tariffs due to higher costs of domestically produced modules, as revealed through documents obtained under the RTI Act.
Currently, a handful of manufacturers, including Waaree Energies, Adani Solar, Nasdaq-listed ReNew Power, US-based First Solar, and Tata Power, dominate the ALMM list, controlling nearly 50% of the existing capacity. This market concentration has led to a sharp increase in the cost of domestic solar modules, which are now priced 90% higher than their international counterparts. Recent data shows that the price disparity between domestic and imported modules, predominantly from China, has widened considerably. In the first quarter of FY22, domestic modules were only 6% more expensive than imported ones. However, by the first quarter of FY24, the cost gap had surged to 50%, and nearly doubled in Q1 FY25, according to CRISIL’s analysis.
The ALMM order, initially put on hold in March 2023, was criticised by the then Union Minister  for being imposed prematurely and potentially enabling manufacturers to charge excessively high prices. Singh had highlighted that the premature implementation of the ALMM could slow the addition of solar capacity and ultimately burden consumers with higher power costs. Official trade data reveals that in FY24, India imported solar PV modules and panels worth Rs 36,134 crore, with Rs 23,678 crore (66%) coming from China. Despite the imposition of the Basic Customs Duty (BCD) on Chinese solar PV modules, imports surged by 107% in April 2024, only to drop by 65% the following month.
The reimposition of the ALMM order represents a pivotal moment in India’s renewable energy landscape, balancing the need for domestic manufacturing with the challenges of cost and market competition. As the country strives to enhance its solar capacity, the impact
