Exclusive | ALMM for solar panels may be implemented from April 2024, say govt officials

The ministry recently also made changes to the ALMM norms and allowed only those firms to participate, which had a minimum efficiency of 19 percent.

After being kept in abeyance for a year, the Approved list of Models and Manufacturers (ALMM) for solar modules is likely to be implemented from April 2024, according to two senior officials from the Ministry of New and Renewable Energy (MNRE).

“There is no plan to defer the imposition of ALMM for another year. We are regularly having meetings with solar photovoltaic (PV) manufacturers to increase domestic production capacity, which has already crossed the 40 GW mark this year,” said a senior MNRE official requesting anonymity.

The ALMM mandate was introduced in 2021 as a non-tariff barrier to boost domestic manufacturing, by approving the list of indigenous models and manufacturers who could participate in the solar development projects bids put out by the government. The mandate was later extended to the government’s open-access projects as well. Currently, 79 Indian manufacturers have been approved under the list.

However, in March this year, the government kept the ALMM in abeyance for a year stating that it would not apply to any solar project commissioned before March 31, 2024. The government said the ALMM mandate was kept in abeyance to boost solar project installations in India, which had suffered sluggish growth, first due to the Covid-19 pandemic and then due to the imposition of basic customs duty.

But the move hit domestic solar manufacturers as they now had to compete with the increased influx of imported solar modules and cells. Import data from the Ministry of Commerce showed that 3.43 GW solar modules worth Rs 6,856 crore were imported between April and August this year. At the same time, solar installations in the country during the same period stood at about 4.12 GW, which means domestic solar modules were, in all likelihood, used only for installations to the tune of 0.69 GW or 690 megawatts (MW).

The ministry recently also made changes to the ALMM norms and allowed only those firms to participate, which had a minimum efficiency of 19 percent. The idea of the rule was to weed out outdated solar modules which are not based on the latest technology and are lower in efficiency.

Boosted by the production-linked incentive (PLI) schemes, India’s domestic solar module manufacturing capacity is expected to reach 50 GW by next year and 95-100 GW by 2026. Under the government’s PLI scheme (Tranche-II), green power arms of Reliance Industries Ltd, Tata Power Company Ltd, and JSW Energy Ltd are setting up solar photovoltaic (PV) module manufacturing capacities.

“But, the good news is that a number of companies in India are setting up solar module manufacturing units and backward integrated manufacturing units even without the PLI schemes. A number of smaller solar manufacturing companies have sprung up in India in just about two-three years and most of them are currently sitting on the fence awaiting the implementation of the ALMM to enter the domestic market,” said a second senior official from the MNRE requesting anonymity.

Gyanesh Chaudhary, Chairman and Managing Director of Vikram Solar Ltd, said the industry has been grappling with delayed implementation of ALMM, which he termed “essential” to promote domestic solar module demand. He further said India’s journey towards indigenising the solar manufacturing value chain will necessitate investments of approximately $7.2 billion (around Rs 60,026 crore) in the next 3-4 years.

The government is also preparing a trajectory for manufacturers to ensure complete indigenisation of solar modules in India spread over a period of two to three years.

“We are going to make the approved list of models and manufacturers (ALMM) norms more stringent. We will give a trajectory for the indigenisation of solar modules. We have to reach a point where manufacturers can no longer claim themselves as a 'Made in India' brand if they import most of their components,” Union Minister for Power and New and Renewable Energy RK Singh said on October 20.