Mandatory domestic solar cells to reshape market, spur consolidation: Report
New Delhi, June 8
India's solar industry is entering a structural transformation phase as the mandatory use of domestically manufactured solar cells under ALMM List-II comes into effect. With this transformation, the solar power market will likely move towards oligopoly, says JM Financial.
With over 120 manufacturers, the Indian solar industry's collective installed module capacity exceeds 210GW, of which 173GW is enlisted under the ALMM List I. These manufacturers can be further classified into three categories: potentially large integrated players, technologically strong domestic players, and policy-dependent assemblers who largely depend on import duties and ALMM protection. Meanwhile, India's "solar cell manufacturing capacity lags at 30GW across 13 enlisted players, expected to touch 60-70GW by FY28E (10-15 players)," the report added.
On the other hand, "the ALMM List-III, which proposes to extend the domestic mandate to ingots and wafers, is currently under consultation with a proposed implementation timeline of Jun'28," the report said.
Effective June 1, 2026, all solar projects commissioned under Net-Metering and Open Access are required to use solar PV modules from ALMM List-I and solar PV cells from ALMM List-II.
Noting the "government implemented the ALMM List-II without a blanket deferral despite significant industry pressure," JM Financial expects that "the ALMM List-III will be introduced within the stipulated timeline of Jun'28."
In FY26, India installed 44.6GW of solar power capacity -- including 15 GW from the commercial and industrial (C&I) segment and captive projects, up from 10 GW in FY25. By the end of March 2026, cumulative installed solar open-access capacity reached 32.9 GW.
As per CEA, total RE capacity under construction at end-Mar'26 is 138GW, comprising 90GW solar, 29GW wind and 19GW hybrid. As per JM Financial, "10-15GW of solar open access capacity under construction may be eligible for relaxation and will have insignificant impact on opportunities for cell-module integrated players."
As the policy focus shifts toward capital- and capability-driven integration--with solar cells from June 2026 and ingots/wafers likely by June 2028 - "the industry will inevitably witness consolidation, exit of weaker manufacturers and a gradual move towards an oligopoly," said JM Financial.
— ANI
Reader Comments
As someone working in renewable energy financing, this is a double-edged sword. The ALMM mandate will certainly push prices up in the short term—domestic cells cost 15-20% more than imported ones. For commercial and industrial users, this means higher payback periods for rooftop solar. I'm all for Atmanirbhar Bharat, but we need to ensure the transition doesn't kill the momentum of solar adoption. The government must also ramp up PLI schemes to make domestic cells competitive.
Great move but the timeline feels rushed. Our cell manufacturing is barely 30GW while module capacity is 210GW! How will we bridge this gap by 2026? Unless the government also fast-tracks new cell factories and gives them priority land/clearances. Otherwise, we'll just have more imports of cells through some loophole. Hope the PLI scheme works this time—too many delays already. 🤞
I've seen this playbook before in other industries—when you force domestic content without building capacity, you end up with inferior, expensive products and crony capitalism. The "oligopoly" the report mentions is concerning. A handful of politically connected players could capture the market and jack up prices. The government needs to ensure there's real competition, not just replacing Chinese monopoly with Indian monopoly. Also, what about quality standards for these domestic cells?
My company installs rooftop solar across Maharashtra. This ALMM list-II has already caused chaos—our suppliers don't know which new panels will qualify, project timelines are slipping, and customers are getting nervous. I agree with the long-term vision, but the implementation has been clumsy. The government should have given more notice and allowed a phase-in period. Now we're scrambling to find compliant modules while the cell mandate hasn't even started. Kaam toh humein karna hai boss!
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