| Relevance: GS Paper III — Economy, Energy Security & Atmanirbhar Bharat | Source: Current Affairs, June 2026 |
India’s Solar Tussle: When “Make in India” Meets Costly Cells
1 · What happened
| A big fight has broken out inside India’s solar energy sector. A group of solar project builders (called developers — the companies that set up solar power plants) from Karnataka, Kerala, and Tamil Nadu, led by the body KRESMA, has gone to the Karnataka High Court.
They are challenging a new rule by the Ministry of New and Renewable Energy (MNRE). According to which, from June 1, 2026, every new solar project must buy its solar cells only from the government’s approved Indian list — foreign cells are no longer allowed for these projects. |
2 · The core problem: a clash of two interests
| The developers say Indian cells are too costly and too few, and have asked the court to push the rule back by at least one year. So the case is really about a tug-of-war between making things in India and keeping clean power cheap and fast.
Concepts:
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The Rule
The ALMM Mandate
MNRE’s Approved List of Models and Manufacturers (ALMM). From June 2026, new projects must buy cells only from List-II — the approved Indian cell makers.
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The Cost Gap
₹13 vs ₹5 Per Watt
Approved Indian cells cost about ₹13 per wattage of energy produced. While imported (mostly Chinese) cells cost about ₹5 per watt. Developers say this gap will raise electricity costs and tariffs.
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The Risk
Short Supply, Few Hands
India’s cell production capacity (27 GW) meets only 25–30% of demand. Just 4–5 firms control 98% of it — risking high prices and stalled projects due to supply shortage.
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The Way Out
A Middle Path
MNRE rejects a blanket delay but set up a 4-member expert panel for case-by-case relief. Experts suggest import quotas and price caps as a phased fix.
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The Two ALMM Lists:
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List-I (Modules): Approves solar panel assemblers (abundant supply; ~130 companies).
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List-II (Cells): Approves core solar cell makers (tight supply; only ~17 companies).
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The Rule: From June 2026, government-backed solar projects must use List-I panels that are built exclusively using List-II domestic cells.
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The Supply Bottleneck: India has massive capacity to assemble modules (~210 GW), but severe limits on manufacturing the actual cells (~30 GW). Domestic cells can only meet about 25–30% of current market demand.
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The Fairness Debate (Force Majeure): The government gave cell manufacturers a deadline extension citing global supply chain tensions (West Asia crisis). However, solar project developers did not get the same relief and face heavy penalties for delays caused by the resulting cell shortage.
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The Government’s Stance: The strict mandate is necessary to ensure long-term policy stability, protect billions invested in domestic factories under the PLI scheme, and permanently end India’s reliance on Chinese imports.
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The Proposed Solutions: To fix the immediate crisis without hurting long-term goals, experts suggest:
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Import Quotas: Allow developers a temporary, duty-free quota to import cells to cover the massive supply gap.
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Price Caps: Temporarily cap domestic cell prices so the few List-II companies cannot exploit the shortage to overcharge.
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Deepening PLI: Funnel future government subsidies into the hardest, earliest stages of solar manufacturing (raw polysilicon, ingots, and wafers) rather than just final assembly.
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| UPSC Value Box | ||||||||||||||||||||||||||
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| MCQ Practice Question |
Q. With reference to the Approved List of Models and Manufacturers (ALMM), consider the following statements:
Which of the statements given above is/are correct? |
Answer: (c) 1 and 3 only
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