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

📌 Summary:

• From June 1, 2026, Government of India mandates that only locally manufactured solar cells can be used in domestic, commercial and industrial solar projects; cells are the building blocks of solar modules that convert sunlight to electricity

• Mandate operationalised through expansion of the existing ALMM (Approved List of Models and Manufacturers) — earlier ALMM-I covered modules; new ALMM-II covers cells, restricting eligible suppliers

• Objective: reduce import dependence (mainly from China), strengthen the domestic manufacturing ecosystem, and operationalise Atmanirbhar Bharat in clean energy; aligns with PLI scheme for high-efficiency solar PV modules and PM-KUSUM, PM Surya Ghar deployment targets

• Capacity mismatch — why concerns are real:

  • India''s solar module manufacturing capacity: ~200 GW per annum (built rapidly via PLI + BCD on imported modules);
  • India''s solar cell manufacturing capacity: only ~30 GW per annum;
  • Bulk of module manufacturing therefore depends on imported cells (mostly Chinese);
  • From June 1, the binding constraint shifts to cell capacity → many module makers face raw-material shortage

• Impact on capacity addition: (1) Project costs likely to rise (domestic cells priced 10-25% higher than Chinese); (2) Possible slowdown in utility-scale commissioning in FY27 — could hit 500 GW non-fossil 2030 target; (3) Rooftop solar under PM Surya Ghar Muft Bijli (target 1 crore households) may see longer wait times; (4) Module exports (to US/EU markets that demand non-Chinese content) get a boost via "wafer-to-module" traceability

• Industry asks: phased enforcement (start with utility-scale only), exemptions for projects already bid out, faster ALMM listing of new domestic cell lines under PLI; transitional import quota until India crosses ~80-100 GW cell capacity (expected by 2028)

• Broader context: part of a wider economic strategy of supply-chain resilience in clean-tech — also covers wind turbines, electrolysers, EV batteries, semiconductors (NITI Aayog roadmap to $120-150 bn semiconductor industry by 2035)

🎯 UPSC Relevance: GS3 — Energy/Renewable Energy; manufacturing; trade policy & Atmanirbhar Bharat; environment (clean energy transition); India''s climate commitments

📝 Prelims Facts:

• ALMM = Approved List of Models and Manufacturers, maintained by MNRE
• India''s solar module capacity ~200 GW; cell capacity ~30 GW (May 2026)
• India''s non-fossil installed capacity target: 500 GW by 2030 (Panchamrit, COP26)
• PM Surya Ghar Muft Bijli Yojana — 1 crore rooftop solar households target
• PLI scheme for High Efficiency Solar PV Modules — outlay Rs 24,000 crore

🔑 Key Term: ALMM (Approved List of Models and Manufacturers) — MNRE''s positive list of solar module/cell makers whose products are eligible for use in government-supported projects; ALMM-II extends the list to cells, mandating domestic content from June 1, 2026.