India Provides Relief From ALMM Obligation

• MNRE has announced an exemption of 1 year to solar power projects from using modules listed in the ALMM
• It will be applicable to facilities that start commercial operations by March 31, 2024, according to its notification
• The decision should provide a relief to developers who had been struggling to procure modules in the light of limited domestic capacity to meet demand

The Indian Ministry of New and Renewable Energy (MNRE) has decided to exempt solar power project developers from the requirement to procure solar modules only from manufacturers listed in its Approved List of Models and Manufacturers, for projects commissioned till March 31, 2024. The decision is likely to see the Indian solar market reporting some big installation numbers in fiscal year 2023-24.

"With reference to the Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirements for Compulsory Registration) Order, 2019 and subsequent amendments and clarification thereto, the undersigned is directed to convey that subject Order is hereby held in abeyance for one financial year, i.e. FY 2023-24. Thus Projects commissioned by 31.03.2024 will be exempted from the requirement of procuring Solar PV modules from ALMM," reads the order.

The ministry's order comes after Energy Minister RK Singh announced unofficially in February 2023 that he plans to provide a 2-year exemption for solar projects from meeting the ALMM requirement. He was responding to demand from the market that current Indian manufacturing capacity is not enough to meet the country's solar installation target.

India has 70 GW solar under implementation but only 21.68 GW module capacity under ALMM list 1 as on January 25, 2023. The decision to exempt may not go down well with domestic manufacturers though.

With the Basic Customs Duty (BCD) imposed on imported cells and modules, developers were being forced to procure modules at high prices. Back then he had said, "If I depend only on this (Indian manufacturing), it will take 7 years. I can't wait for 7 years so I have just decided to relax this ALMM for 2 years. Incidentally some countries have gone against ALMM to the WTO. We will fight it there." (see Breather For Indian Solar Power Project Developers).

Now, instead of 2 years the ministry has given 1-year extension which should boost pace of installations in the coming year after the country exited CY2022 with 13 GW capacity (see India: Solar PV Record Installations Of 13 GW In 2022).