The re-imposition of the Approved List of Models and Manufacturers (ALMM) order appears to be a significant step aimed at strengthening the domestic manufacturing ecosystem for solar photovoltaic (PV) modules. However, myriad challenges lie ahead in terms of ground implementation of the order. It may be recalled that the initiative, launched in 2019, was temporarily put on hold after manufacturers started facing domestic availability of modules. Such a track record casts a shadow on the government’s objective of reducing import dependency, particularly from dominant manufacturing hubs like China and Taiwan. Nevertheless, the intention of nurturing the country’s indigenous solar manufacturing capabilities is praiseworthy.
The ALMM list is designed to ensure that solar projects funded or subsidised by the government utilise modules and cells produced by Indian manufacturers that meet stringent quality standards. This includes adherence to India's Bureau of Indian Standards (BIS), thereby promising efficiency and reliability in the solar products deployed across government-led projects. The rationale behind this move is threefold, to say the least. Firstly, it aims to spur domestic production. Secondly, the durability and performance of solar installations is meant to be ensured. Thirdly, the idea is to provide India’s ambitious renewable energy targets a reliable backing.
India's reliance on imports for its solar module needs is a well-documented challenge. With over 80 per cent of its solar cell and module demands met through imports, primarily from China and Taiwan, the country has faced significant trade and supply chain vulnerabilities. This heavy import reliance has been a concern for policymakers, especially given the strategic importance of the renewable energy sector for India's energy security.
The real paradox to this situation is that India has an estimated solar power potential of 748.99 GW—remaining largely untapped. It is against this backdrop that the slurry of government’s strategic interventions over the past few years can be seen. These include the introduction of customs duties on imported PV cells and modules, and the launch of the Production Linked Incentive (PLI) scheme. These policies reflect a clear intent to transition from an import-dependent model to a more self-sufficient, resilient solar manufacturing ecosystem. The re-imposition of ALMM can thus be seen as just the next element in a chain of efforts.
Critics of the ALMM argue that it acts as a barrier to the unfettered supply of cost-effective solar components, potentially slowing down the pace of solar energy adoption due to higher costs of domestically produced modules. However, proponents highlight the long-term benefits of such a move, including job creation, technology transfer, and the development of a robust local supply chain that is less susceptible to global disruptions.
The government’s stopgap incentives for promoting domestically produced modules notwithstanding, the sector is bound to act as per sustainable market forces—opting for cheaper and reliable sources of components. There could be no shortcut to success. Rather than trying to align the market forces in line with its own objectives, the government would do well in making long-term investment in research and innovation, so as to enhance the market competitiveness of domestically produced modules.
Looking ahead, the success of the ALMM and related policies in achieving their intended outcomes will hinge on careful implementation, continuous monitoring, and periodic adjustments based on industry feedback and global market dynamics. It will also require sustained efforts in research and development to enhance the competitiveness of Indian solar modules on the global stage. India's journey towards a self-reliant solar manufacturing industry is undoubtedly challenging, but it is a necessary step towards securing its energy future and meeting its ambitious renewable energy goals.