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The ministry of new and renewable energy has updated the approved list of models and manufacturers (ALMM) for solar modules adding more Indian players to the list.
The list now has 66 manufacturers who can supply equipment to solar projects in India, showed a notification from the ministry. The list had 58 manufacturers after its previous update in April. This is the seventh update to the list.
Being on the list is essential to do business in the country for solar equipment manufacturers. Equipment of firms on the list can be sourced for government-supported schemes and projects from where electricity discoms procure electricity. Manufacturers and solar modules are to be approved by the Bureau of Indian Standards (BIS) and the ministry of new and renewable energy (MNRE).
The new additions to the list include Rajasthan Electronics and Instruments Limited (REIL), Neety Euro Asia Solar Energy, Shivam Photovoltaics Pvt Ltd, Sahaj Solar Pvt Ltd, Raajratna Ventures Ltd, Mundra Solar Energy Ltd, Renewsys India Pvt. Ltd and Waaree Energies Ltd.
The ministry came up with the ALMM order in 2019 in a bid to reduce import dependence for solar modules.
The update to the list comes at a time when the cost of solar modules in the country has increased.
A recent report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics solar module prices have risen in the past 18-20 months owing to supply chain constraints and increasing raw material prices, such as polysilicon.
Akhil Thayillam, Senior Research Associate at JMK Research said that India-specific challenges, such as the imposition of basic customs duty (BCD) of 40% on imported modules and paucity in domestic manufacturing capacity of high-wattage modules, are exacerbating an “already worrying" situation. An added risk is the implementation of the approved list of models and manufacturers (ALMM), he said.
The cost of open access solar projects in India has increased by at least 15% because of the global supply chain constriction, the report said. “Module price volatility will persist in the Indian solar landscape for the next 1-2 years. We expect a substantial portion of the high-wattage domestic module capacity will cater to the export market. This would be an added constraint to the supply of such modules for the Indian market," it said.
On 24 June, Mint had reported that the government has kept on hold for a year its decision to grant foreign manufacturers permission to feature in the approved list of solar photovoltaic (PV) models and manufacturers (ALMM).
The non-approval to foreign companies is being viewed as a non-tariff barrier to stop solar equipment imports from Chinese companies, which supply a major chunk of equipment for solar power projects.
In January 2022, the MNRE made amendments extended the scope of the ALMM to open access and net metering projects.
The push for domestic sourcing of equipment comes at a time when the government is looking at boosting the local manufacturing and lower import dependence.
Government has also come up with a production linked incentive (PLI) scheme for solar modules. In the union budget for FY23, finance minister Nirmala Sitharaman allocated ₹19,500 crore in PLI incentives to make solar modules, bringing the total to ₹24,000 crore. Initially the government had announced an incentive of ₹4,500 crore under the scheme.
The policy focus domestic solar module production has also gained momentum with prime minister Narendra Modi’s commitment at the COP26 summit at Glasgow to achieve renewable energy target of 500 GW by 2030 out of which 280 GW is expected to be solar power.
As of 30 June, installed solar power capacity in the country was 57.706 GW, which is 14.3% of the total installed capacity of 403.760 GW.