India’s ALMM List-II rules require government-backed, net-metered and open-access solar projects commissioned from 1 June 2026 to use domestically manufactured solar cells.
Manufacturers warn that domestic solar cell capacity, at about 31GW, is far below module manufacturing capacity of around 193GW.
The mismatch is sharper in TOPCon technology, where approved module capacity is nearly 172GW but domestic cell capacity is only around 10GW.
Standalone module makers say limited open-market cell supply could strand investments, disrupt production and favour large vertically integrated manufacturers.
Industry leaders broadly support domestic solar manufacturing, but several manufacturers are seeking a transition period to allow cell production to scale up.
India’s push to build a self-reliant solar industry is facing a test, as new domestic content rules expose a sharp shortage of locally made solar cells.
The implementation of the Approved List of Models and Manufacturers (ALMM) List-II from June 1, 2026 has triggered concern across the country’s solar manufacturing industry. Manufacturers have warned that a shortage of domestically produced solar cells could disrupt production, strand investments and concentrate the market among a handful of vertically integrated players.
The Ministry of New and Renewable Energy (MNRE), clarified on May 25, 2026 that it would not extend the ALMM List-II deadline for solar photovoltaic cells beyond June 1, 2026. Projects commissioned after this date must comply with the requirement to use domestically manufactured solar cells. Relief has been provided for projects with existing investments and completed installations, while developers can submit claims for extensions until June 30, 2026.
The ALMM-II domestic content requirement mandate requires all government-backed, net-metered and open-access solar projects commissioned on or after June 1, 2026 to use solar panels manufactured exclusively with domestically produced solar cells.
In a letter to MNRE on May 26, 2026, Contendre Greenergy Ltd, a solar panel manufacturer in India, said the current structure and timeline could lead to unintended industry-wide consequences. The company highlighted what it described as a significant structural mismatch between module manufacturing capacity and domestic cell availability.
Industry data points to a major gap between module manufacturing capacity and domestic cell availability. ALMM List-I module manufacturing capacity currently stands at around 193 gigawatts (GW), while ALMM List-II cell manufacturing capacity is approximately 31 GW.
The gap is more pronounced in advanced technologies. TOPCon, a highly efficient next-generation solar cell technology, accounts for 171,862 megawatts (MW), or 88.96 per cent, of approved module capacity. Mono PERC modules, premium solar panels that combine high-purity monocrystalline silicon with a specialised rear-surface coating, account for 12,702 MW, or 6.57 per cent, while other technologies contribute 8,634 MW, or 4.47 per cent.
On the cell side, Mono PERC dominates with 17,103 MW, or 54.93 per cent, of approved capacity. TOPCon cell capacity stands at 9,584 MW, or 30.78 per cent, while other technologies account for 4,450 MW, or 14.29 per cent. This highlights a critical mismatch between nearly 172 GW of TOPCon module capacity and only around 10 GW of TOPCon cell manufacturing capacity.
Domestic cell manufacturing capacity of about 31,137 MW accounts for only around 16 per cent of India’s 193,198 MW module manufacturing capacity. After integrated manufacturers use roughly 28,579 MW of cells for their own module production, only about 2,558 MW remains available in the open market, meeting less than 1.9 per cent of the requirements of standalone module manufacturers.
Contendre said in its letter that the mismatch is not merely a supply constraint, but a broader operational challenge. The shortage of domestically available TOPCon cells could force module manufacturers to modify production lines to accommodate alternate cell technologies, undertake fresh product certifications and manage operational disruptions that may reduce manufacturing efficiency during the transition.
These adjustments would also entail additional capital expenditure and project delays, placing further financial strain on manufacturers already grappling with tight margins and significant debt obligations.
Standalone module manufacturers argue that the policy could make existing investments commercially unviable. According to industry estimates, establishing a 1 GW module manufacturing line requires investment of approximately Rs 50 crore to Rs 80 crore, often financed through loans, working capital borrowings and promoter capital.
Contendre Greenergy Ltd said module manufacturers had invested under the prevailing policy framework and now face the risk of being unable to source compliant domestic cells. The company argued that backward integration into cell manufacturing is not a practical solution for most standalone players.
According to the company, a 1 GW solar cell manufacturing facility requires investment of Rs 250 crore to Rs 400 crore — roughly five to eight times higher than module manufacturing. Cell manufacturing projects also involve gestation periods of 18 to 24 months and require specialised semiconductor-grade manufacturing expertise.
The company warned that standalone manufacturers would face “double financial jeopardy” by servicing existing debt while attempting to raise capital for cell manufacturing facilities.
Manufacturers have also raised concerns that most domestic cell producers are themselves integrated module manufacturers. A cross-analysis of ALMM List-I and List-II indicates that the total approved cell manufacturing capacity of about 31,137 MW largely belongs to companies that collectively possess around 58,926 MW of module manufacturing capacity. Industry estimates suggest these manufacturers would require approximately 28,579 MW of cells for captive consumption, leaving only around 2,558 MW available for sale in the open market.
Manufacturers argue that this would make less than 1.9 per cent of standalone manufacturers’ approximately 134 GW module capacity serviceable with domestically sourced cells.
According to the industry, the resulting supply shortage would make it mathematically impossible for most standalone manufacturers to operate their facilities at viable utilisation levels. Manufacturers have also warned that the policy could accelerate market concentration.
Industry representatives contend that if domestic cell supplies remain constrained, only vertically integrated companies would be able to participate effectively in government and government-assisted projects.
They argue that module supply could increasingly be concentrated among a small group of large integrated manufacturers such as Waaree, Adani, Tata and ReNew, reducing competition and potentially increasing module prices for project developers.
The industry estimates that around 138 standalone manufacturers collectively represent nearly 134 GW of module manufacturing capacity.
Despite concerns over implementation, industry leaders broadly support the objective of strengthening domestic manufacturing. Ganesh Moorthi, chief technology officer at Luminous Power Technologies, said: “The implementation of the Domestic Content Requirement mandate from June 1 marks a significant step towards strengthening India’s solar manufacturing ecosystem and advancing the vision of a self-reliant renewable energy sector.
“The move is expected to accelerate investments across the solar value chain, improve supply chain resilience, and create long-term opportunities for domestic manufacturers.”
He added that while the industry may witness near-term supply constraints around DCR-compliant cells for rooftop solar, continued government support could accelerate capacity expansion and enable a smoother transition.
Ishver Dholakiya, founder and managing director of Goldi Solar, said: “ALMM List-II is more than a compliance measure; it is India’s clearest signal yet that the next phase of the solar transition will be built on domestic capability, not import dependence.” India’s cumulative module manufacturing capacity had reached nearly 210 GW, while domestic solar cell manufacturing capacity had crossed 27 GW as of early 2026, he added.
“The implementation of ALMM List-II is therefore expected to accelerate investments into domestic cell production, backward integration, technology upgrades and long-term supply chain resilience,” he said.
Binit Das, programme manager for renewable energy at Delhi-based think tank Centre for Science and Environment, said the primary concern was that domestic cell manufacturing capacity remained significantly below module manufacturing capacity, particularly for TOPCon technology.
“The concern around ALMM List-II is that the requirement to use domestically manufactured solar cells is coming into effect at a time when domestic cell manufacturing capacity is still much lower than module manufacturing capacity,” Das said.
He noted that many cell manufacturers also use their production internally, leaving limited supplies available to standalone manufacturers. “As a result, several manufacturers are seeking a transition period to allow domestic cell production to scale up before full implementation of the policy,” he added.
The debate comes at a time when India is rapidly expanding renewable energy deployment. India recorded an all-time peak power demand of 270.8 GW on May 21, 2026, while the first peak was 256 GW on April 25, 2026, with solar power contributing nearly one-fifth of electricity supply.
However, the country also experienced power shortages on 13 of the last 15 nights in April. Zerodha’s Daily Brief on May 14, 2026 highlighted growing challenges in integrating large volumes of renewable energy into the grid. India added a record 55 GW of non-fossil fuel capacity during the previous financial year, while less than half of the country’s installed power generation capacity now comes from fossil fuels.
The daily financial newsletter The Daily Brief by Zerodha said India will require substantial investment in grid infrastructure, battery storage and transmission systems to support its renewable energy ambitions, with NITI Aayog projecting nearly 1,800 GW of solar and wind capacity by 2050.
Industry stakeholders have urged the government to consider a phased transition period that aligns ALMM-II implementation with the expansion of domestic cell manufacturing capacity. Manufacturers have also called for measures to ensure adequate open-market availability of domestically produced cells, support capacity expansion in advanced technologies such as TOPCon, and provide policy certainty for investors who established manufacturing facilities under earlier policy frameworks.
Contendre Greenergy said the objective of deepening the domestic value chain remains necessary, but cautioned that implementation should avoid undermining existing manufacturing investments.
The company argued that policy continuity and investor protection are essential to the success of the Make in India initiative, and warned that abrupt implementation could discourage future investment across the renewable energy supply chain.