From June 1, solar projects must use only locally made cells: Why this raises concerns

What Happened

• From June 1, 2026, all solar projects under government schemes, open access, and net-metering installations in India must use solar modules manufactured with cells sourced exclusively from the Approved List of Models and Manufacturers (ALMM) List-II — meaning domestically manufactured solar cells only.
• The ALMM List-II (solar cells) was first issued on 31 July 2025; ALMM List-I (solar modules) has been in force since March 2021. The June 1, 2026 deadline extends the existing module-level requirement down the supply chain to the cell level, operationalising full Domestic Content Requirement (DCR) compliance.
• The policy is part of the Atmanirbhar Bharat initiative and aims to reduce India's heavy dependence on imported solar equipment — particularly solar cells from China, which currently supply the overwhelming majority of India's module production inputs.
• Industry concerns are significant: India's certified domestic solar cell manufacturing capacity currently covers under 13% of its total module production capacity, meaning supply will be tight and prices of DCR-compliant modules are expected to rise sharply.
• Analysts warn that the supply-demand mismatch could delay solar project commissioning, raise tariffs for power procurement, and create compliance gaps that, if poorly monitored, could generate loopholes; the government may consider extending the implementation timeline by 3–4 months to allow new domestic cell capacity to be fully commissioned.

Static Topic Bridges

Approved List of Models and Manufacturers (ALMM)

ALMM was created by the Ministry of New and Renewable Energy (MNRE) through the "Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirement for Compulsory Registration) Order" issued on 2 January 2019. Its purpose is to ensure quality, traceability, and domestic manufacturing preference in government-supported solar projects. ALMM is structured in two lists: List-I covers solar PV modules (first issued March 2021; currently 93–107 domestic manufacturers, ~91,000 MW capacity); List-II covers solar PV cells (first issued 31 July 2025, updated regularly). Only ALMM-listed products are eligible for government projects, government-assisted projects, PM Surya Ghar, PM KUSUM, CPSU Phase-II, open access, and net-metered installations.

Domestic Content Requirement (DCR) in Solar Policy

Domestic Content Requirement in India's solar sector originated with the JNNSM (launched 2010) and required solar projects under certain government schemes to use domestically manufactured solar cells and modules. DCR provisions survived a WTO dispute (India — Certain Measures Relating to Solar Cells and Solar Modules, DS456, 2016) in which the WTO Appellate Body ruled against India's blanket DCR as inconsistent with GATT Article III:4 and the TRIMS Agreement. India subsequently retained DCR only for government-procurement schemes (not open-market projects), arguing security of supply and public procurement exemptions. MNRE has maintained DCR provisions under PM KUSUM, PM Surya Ghar: Muft Bijli Yojana, and CPSU Scheme Phase-II even after the WTO ruling.

Atmanirbhar Bharat and Solar Manufacturing Push

Atmanirbhar Bharat (Self-Reliant India), announced in May 2020, is the government's framework for reducing import dependence across strategic sectors including electronics, pharmaceuticals, defence, and renewable energy. In solar, the key interventions include: Production Linked Incentive (PLI) scheme for solar PV manufacturing (MNRE, 2021, ₹24,000 crore for 10 GW high-efficiency module manufacturing); Basic Customs Duty (BCD) on imported solar modules (40%) and solar cells (25%), effective April 2022; and the ALMM framework enforcing sourcing from certified domestic manufacturers. The PLI scheme was expanded to include integrated manufacturing (polysilicon → wafer → cell → module) to reduce dependence on imported cells specifically.

Key Facts & Data

• Effective date of ALMM List-II (cell) mandate: June 1, 2026
• ALMM Order issued: 2 January 2019 (MNRE)
• ALMM List-I (modules) first issued: 10 March 2021
• ALMM List-II (cells) first issued: 31 July 2025
• India's domestic cell capacity as share of total module production capacity: <13%
• Basic Customs Duty on imported solar modules: 40% (from April 2022)
• Basic Customs Duty on imported solar cells: 25% (from April 2022)
• Solar PLI scheme outlay: ₹24,000 crore (Phase II)
• WTO dispute DS456 ruling against India's DCR: 2016
• Schemes requiring DCR compliance: PM Surya Ghar, PM KUSUM, CPSU Phase-II, open access, net metering
• Industry estimate for domestic cell capacity ramp-up: needs additional 3–4 months beyond June 2026
• India's installed solar capacity: ~100 GW (January 2025); 500 GW non-fossil target by 2030