In its initial steps towards reducing India’s dependence on solar imports and self-reliance, the Ministry of New and Renewable Energy (MNRE), as early as 2018, announced compulsory registration of solar module manufacturers under the Approved List of Models and Manufacturers (ALMM).

The ALMM lists eligible models and manufacturers of solar cells and modules complying with the BIS (Bureau of Indian Standards) certification. Enlisting in ALMM is mandatory for manufacturers supplying to the government-owned solar projects. The implementation deadline of ALMM has seen several extensions, and on March 10^th this year, the MNRE issued the first batch of manufacturers under the ALMM.

Per MNRE, developers have to source modules from this list for the bids that they participate in after 30 days of the list’s publication which is April 10, 2021.

Some of the manufacturers whose modules have been enlisted under the ALMM order include Mundra Solar, Vikram Solar, Bharat Electronics, Emmvee Photovoltaic Power, and ORB Energy among others.

There are no foreign manufacturers on the list so far, putting the developers in limbo.

More Clarity Required

The industry feels there is a need to speed up the enlistment process as it affects future projects. Developers will be impacted the most. With a supply and demand gap in the market, module prices are bound to go up, negatively impacting project costs.

Speaking to Mercom, an executive at a leading Chinese module supplier, said, “The situation is really bad. What is the idea behind having such a system in place? There is no clarity about the whole process. The government has to clear the air. We were the first to submit the fee of ₹700 million (~$9.34 million) for enlistment, but we have not received any government communication. We haven’t even received an acknowledgment.”

With just a few module manufacturers enlisted so far, future projects face uncertainty when it comes to supplies, a nightmare for project developers. “The order has taken effect from April 10, but we are not sure how things will pan out in the future,” he commented.

Referring to the Basic Customs Duty (BCD) on cells and modules that will come into force next year, he said, “The government says it is good for the domestic manufacturing sector, but that will make things difficult for us.”

The executive said that his company wants to withdraw from the ALMM enlistment process. “I want my money back as I don’t want to register for the enlistment process. We have 400W modules in India, which are outdated.”

He said that as of now, no big projects had been executed using modules sourced from Indian manufacturers.

“Most of the Chinese suppliers have paid for registration, but there’s still no clarity. The government is just putting stumbling blocks. The international flights have not started, so things are going to take time.” he said.

Covid-19 Crisis Adding to Delays

The ALMM enlistment process is long, with companies having to share their financial details, capacity, and purchase details of raw materials, among others. The Chinese players believe that this causes an unnecessary delay. While the Covid-19 induced travel ban continues to be in force, things are only going to take longer, and with the second wave of the pandemic in full force in India, there is further uncertainty.

Commenting on the long-drawn-out inspection process, Mohit Shrimal, a senior executive with LONGi Solar, said, “We have registered for ALMM, and they have to go to our factory (in China) and do the inspection. Unless the travel ban is lifted, they cannot do a factory visit. The inspection process will take time until the situation on the ground improves. The government has not reached out to any foreign suppliers as yet, and I think it is going to take some time.”

The government feels that the ALMM order is a positive move for domestic solar modules and cell manufacturers. While the absence of foreign names on the list will help the local manufacturers, stakeholders believe that more clarity is required to implement the order and make it a fair deal for all manufacturers.

Speaking at the recent Mercom India Solar Summit 2021, Amitesh Kumar Sinha, Joint Secretary, MNRE, said that it would take another year or year and a half to enlist foreign manufacturers, given the pandemic situation and travel bans.

“We will keep adding manufacturers to the list. I see India as a future manufacturing hub, and in the next two to three years, we will try our best to become self-reliant in the module manufacturing space,” he said.

Developers Worried

Many developers believe that the implementation of ALMM will deter foreign players from supplying to the Indian market. With the domestic market still far away from being self-reliant, project developers are staring at a supply bottleneck in the foreseeable future.

Putting things in perspective, Apoorva Ekbote, Senior Manager with Vector Green, said, “It will certainly affect the project developers. Recently, in the hybrid tender published by SECI, they have specified that modules from manufacturers in the ALMM list will only be allowed. This is going to be the norm and will certainly affect our participation in future bids. In India, the maximum module output is limited to 400W, and it is only available with a few manufactures, and only a handful are offering half-cut modules. The project configuration will change when we opt for Indian module manufacturers. Even if we are going to bid, we will have to network with Indian manufacturers to procure modules for large projects.”

“Many questions need to be answered. In India, you only get modules of 350W to 360W output, and this will increase the balance of system (BoS) cost,” he said.

ALMM aims to have a quality benchmark for modules and prevent low-quality Chinese manufacturers from dumping their products in India. “The intent is right, but MNRE has to visit the factories, and we are also getting inputs from manufacturers that they have paid the registration fee, but there has been no clarity.

“MNRE should reassess the situation and give a window to developers. It will also affect the capacity addition targets, and any capacity addition for Indian module manufacturers will take some time. Right now, it’s a complicated scenario for all the developers,” Ekbote added.

While the government’s initiative to ensure quality products for the Indian solar industry is commendable, it would do more harm than good to the industry without quick implementation.

“As it stands right now, lack of clarity about ALMM means supply uncertainty, limited module choices, no access to newer technologies, and cost increases for developers of large-scale projects. At a minimum, the industry should have clarity so developers can plan their procurement strategies and adjust their bid prices accordingly, said Raj Prabhu, CEO of Mercom Capital Group.