The government may provide relief to solar developers in the country by exempting them from the requirement of procuring solar modules only from the Approved List of Models and Manufacturers (ALMM), industry sources told Mercom India.

The exemption could be effective for up to two years for all solar projects, the sources said.

Over the last two years, the implementation of ALMM and 40% Basic Customs Duty (BCD) on solar modules have effectively closed the door on Chinese supplies, a traditional source of crucial components needed for solar projects in the country.

The import restrictions have come at a time when Indian manufacturers are preparing to ramp up the capacity required for the planned solar installation pipeline. Further, the ALMM regime pushed up the prices of even domestic modules due to the severe demand-supply mismatch.

Developers have also complained about a quality differential between domestic and Chinese modules.  A large portion of the current domestic capacity – 39 GW – comprises 70% monocrystalline technology. The remaining is polycrystalline capacity, which is expected to be phased out in a couple of years.

The move could ease the path for developers who have been pointing out that once the imported modules from before the ALMM regimes are exhausted, the country will see a virtual pause in solar capacity addition.

To closely monitor the component solar suppliers and their manufacturing facilities, the Ministry of New and Renewable Energy (MNRE) made it mandatory for solar cell and module manufacturers to register under ALMM. Only manufacturers enlisted in ALMM could supply to the projects tendered by the government agencies. For tenders issued after April 10, 2021, developers had to procure modules only from the list of module manufacturers enlisted under ALMM. Later, open access and projects under net metering also were mandated to procure from the ALMM list.

It was also clarified that open access and net metering renewable energy projects that applied for approval before October 1, 2022, would not come under the purview of the ALMM.

Mercom had reported that despite the continued cost-effectiveness of open access and net metering projects to customers, the introduction of ALMM could lead to a longer payback period for projects and dent developers’ margins due to uncertainty around the supply and pricing of domestic modules.

Early last year, the Distributed Solar Power Association filed a petition in the Delhi High Court stating that ALMM could adversely impact the projects under open access and net metering.