The Ministry of New and Renewable Energy's (MNRE) decision to extend the exemption from the Approved List of Models and Manufacturers (ALMM) List-II requirement for net-metering and open-access solar projects until 31 December 2026 is expected to provide immediate relief to developers facing execution delays, while allowing existing imported module inventories to be deployed without altering India's broader push towards domestic solar manufacturing.
The extension follows months of industry concerns over commissioning timelines, limited domestic solar cell availability and uncertainty around compliance. Stakeholders say the additional six months address practical execution challenges for projects already under construction while giving domestic cell manufacturers more time to expand capacity and stabilise production. The exemption applies only to private net-metering and open-access projects, while utility-scale projects tied to DISCOM power purchase agreements (PPAs) or implemented through agencies such as SECI will continue to remain subject to ALMM-II requirements.
Developers Get Execution Relief
The exemption is expected to benefit rooftop, net-metering and open-access projects that were already under execution but faced delays due to approvals, grid connectivity, DISCOM processes and commissioning timelines. Earlier, the exemption was linked to project commissioning dates, creating uncertainty for developers who had already procured modules but were unable to complete projects within the prescribed timeline because of factors beyond their control.
Developers had also flagged uncertainty over commissioning certificates, shortages of ALMM-II compliant modules and delays in module shipments, with some approaching courts for relief before the extension was announced. Industry participants say the revised timeline resolves many of these practical bottlenecks while reducing execution uncertainty for projects already in advanced stages of construction.
The extension is expected to provide the greatest benefit to rooftop and net-metering projects, where shorter execution cycles make commissioning before the revised deadline more achievable. However, its impact on new greenfield open-access projects may be more limited, as land acquisition, statutory approvals and construction typically require much longer timelines. "The extension provides much-needed relief for projects already under execution," said Hanish Gupta, Founder & Managing Director, Sunkind India Limited.
The revised timeline also addresses uncertainty around commissioning certificates, shortages of ALMM-II compliant modules and delays in expected module shipments, issues that had slowed project execution and, in some cases, prompted developers to seek legal relief. "It resolves substantial concerns the industry was facing," said Anujesh Dwivedi, Partner, Deloitte India. An industry insider, who requested anonymity, said the earlier linkage of the exemption to commissioning dates had created practical implementation challenges for projects already under construction. "The extension provides practical relief for ongoing projects," the person said.
Temporary Relief, Long-Term Localisation
The extension is also expected to help clear inventories of modules manufactured using imported solar cells that were procured before the implementation timeline. Industry executives say the measure will prevent working capital from remaining locked up by allowing existing inventories to be deployed in eligible projects. It also creates a viable domestic market for ALMM-I-compliant modules manufactured with imported solar cells, which otherwise would have had limited deployment opportunities.
At the same time, industry participants do not expect the notification to trigger significant fresh imports, as procurement for most eligible projects had already taken place over the past eight to nine months. Instead, the extension is expected to facilitate the utilisation of existing inventories, ease near-term supply constraints, and maintain project execution momentum.
The industry broadly agrees that the order is intended to ease the transition rather than dilute India's localisation agenda. Domestic ALMM-II compliant manufacturing capacity currently stands at around 23.7 GW, compared with 44.6 GW of solar capacity additions during FY2025-26, underscoring the need for a phased transition. Utility-scale projects remain subject to ALMM-II requirements, while domestic cell manufacturing capacity continues to expand. The phased implementation is expected to provide manufacturers additional time to ramp up production while ensuring renewable energy deployment does not slow. "This should be viewed strictly as a transitional measure," said Amit Manohar, Secretary General, Indian Solar Manufacturers Association (ISMA).
Industry estimates suggest the temporary exemption could divert around 8-10 GW of demand away from domestically manufactured solar cells towards imported cells, affecting capacity utilisation, production planning and investments based on the government's implementation roadmap. At the same time, industry representatives stress that the exemption should not be interpreted as an endorsement of continued reliance on imported solar cells, particularly from China, and argue that future policy should continue strengthening domestic manufacturing across cells, wafers and ingots.
Domestic cell manufacturers have already invested more than Rs 25,000 crore based on the certainty of the government's localisation roadmap. Given that cell manufacturing is significantly more capital intensive and technologically complex than module assembly, industry executives say policy certainty and a phased transition remain critical to sustaining investor confidence and financing additional capacity.
For manufacturers, however, the commercial impact is expected to vary depending on their customer mix. Corporate and commercial & industrial (C&I) projects account for only about 20-25 per cent of overall solar demand, limiting the broader impact of the exemption. Companies focused on residential rooftop and government-backed programmes such as PM-KUSUM are unlikely to see a meaningful change in demand because those segments remain outside the scope of the notification. "We do not expect any material impact on the company," said Vinay Rustagi, Chief Business Officer, Premier Energies.
Industry executives also believe the extension strengthens the transition towards domestic manufacturing by making it more practical for both developers and manufacturers. A gradual shift, rather than an abrupt implementation, is expected to improve supply availability, reduce project disruptions and support continued investment in domestic solar cell production. They argue that a cell manufacturing line requires substantially higher investment than a module assembly line and typically takes close to two years to stabilise, making a phased implementation more financeable for manufacturers and lenders alike. "The direction has not changed," said Piyush Goyal, Co-Founder and Chief Executive Officer, Volks Energie.
Developers also argue that the additional window allows renewable energy projects to continue moving forward while domestic cell manufacturing capacity continues to ramp up. Maintaining project execution alongside localisation, they say, is essential if India is to achieve its renewable energy ambitions without creating supply bottlenecks or increasing project costs for rooftop and commercial & industrial consumers. "Project execution and localisation need to move in tandem," said Siddharth Bhatia, Managing Director & Chief Executive Officer, Oyster Renewable Energy & AB Energia.
The consensus across the industry is that while the extension provides short-term operational relief for developers and enables existing inventories to be utilised, it does not represent a policy reversal. Instead, it is seen as a calibrated transition that seeks to balance uninterrupted renewable energy deployment with the long-term objective of building a globally competitive domestic solar manufacturing ecosystem. Industry participants also emphasise that the revised deadline should provide sufficient time for developers to align procurement with ALMM-II while enabling domestic manufacturers to scale production without disrupting India's clean energy transition.
