India’s Solar Power Push: Government Announces Major Policy Changes

New policy amendment to take effect from June 1, 2026, aims to boost domestic solar manufacturing and accelerate India’s clean energy transition.

In a significant move towards clean energy independence, the Indian government has recently announced a major policy change for the solar power sector. A new amendment to the ALMM Order of 2019 mandates the use of domestic solar cells in solar photovoltaic (PV) projects, starting from June 1, 2026. This policy shift is expected to be a game-changer for India’s solar power industry, with far-reaching implications for domestic manufacturing, job creation, and the nation’s clean energy goals.

Understanding the Policy Amendment

The ALMM (Approved List of Models and Manufacturers) Order, issued by the Ministry of New and Renewable Energy (MNRE), serves as a regulatory framework for solar equipment used in India. The recent amendment to this order stipulates that all solar PV projects commissioned after June 1, 2026, must use solar cells manufactured domestically. This essentially means that imported solar cells will no longer be permissible for new solar power plants.

Why is this Policy Change Significant?

India has witnessed a remarkable surge in solar power adoption in recent years. The country has set ambitious targets for renewable energy integration, aiming to achieve 450 GW of installed renewable energy capacity by 2030. Solar power is a critical component of this clean energy push.

However, India’s solar power sector has largely relied on imported solar cells, particularly from China. This dependence on foreign imports has raised concerns about several aspects:

• Vulnerability to Price Fluctuations: Global market fluctuations can significantly impact the cost of solar cells, affecting project viability and planning for developers.
• Supply Chain Security: Overdependence on a single source for solar cells can pose risks to India’s energy security in the event of supply chain disruptions.
• Limited Job Creation: The reliance on imported solar cells restricts job creation opportunities within the domestic solar manufacturing sector.

The new policy amendment aims to address these challenges by promoting the domestic manufacturing of solar cells. By mandating the use of domestic cells, the government intends to:

• Boost Domestic Manufacturing: This policy shift is expected to incentivize significant investments in setting up domestic solar cell manufacturing facilities. This will create a robust domestic solar PV supply chain, reducing reliance on imports.
• Enhance Energy Security: A strong domestic solar cell manufacturing base will mitigate risks associated with global supply chain disruptions and ensure a steady supply of solar equipment for India’s renewable energy projects.
• Create Jobs: The growth of the domestic solar cell manufacturing industry has the potential to create significant job opportunities for skilled workers across the country.
• Reduce Carbon Footprint: Manufacturing solar cells closer to where they will be used can help reduce the carbon footprint associated with transportation and logistics. This aligns with India’s commitment to combatting climate change.

Challenges and the Road Ahead

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While the new policy presents a significant opportunity for India’s solar power sector, there are certain challenges that need to be addressed:

• Manufacturing Capacity: India’s current domestic solar cell manufacturing capacity may not be sufficient to meet the immediate demand arising from this policy change. There is a need to ramp up production capacity quickly to ensure a smooth transition.
• Technology Advancement: Domestic manufacturers need to invest in research and development to keep pace with the latest advancements in solar cell technology and ensure the competitiveness of domestically produced cells.
• Quality and Cost Control: Maintaining high-quality standards and ensuring cost-effectiveness of domestically produced solar cells will be crucial for their wider adoption.

The government is expected to introduce supporting measures to address these challenges. These may include financial incentives for domestic solar cell manufacturers, skill development programs for the workforce, and measures to ensure quality control.

Conclusion

The Indian government’s decision to mandate the use of domestic solar cells in solar PV projects is a bold move with the potential to transform the country’s solar power sector. By fostering a robust domestic solar cell manufacturing industry, this policy aims to enhance energy security, create jobs, and accelerate India’s clean energy transition. The success of this policy will depend on effectively addressing the existing challenges and creating a conducive environment for domestic manufacturing to flourish. This policy shift has the potential to position India as a global leader in solar power technology and innovation.