1. Context: What is the Issue?
Solar manufacturers and project developers (led by associations from Karnataka, Kerala, and Tamil Nadu) have approached the Karnataka High Court to defer a central government mandate. The mandate, issued by the Ministry of New and Renewable Energy (MNRE), requires that most new solar projects commissioned on or after June 1, 2026, exclusively use domestically manufactured solar cells. Developers are demanding a deferment of at least one year, citing a severe supply shortage of domestic cells and a massive price disparity between Indian and imported cells.
2. UPSC Prelims: Key Facts & Concepts
What is ALMM? The Approved List of Models and Manufacturers (ALMM) is a government-ratified list of domestic producer companies. Using solar panels and constituent cells from this list is mandatory for electricity distribution projects in India.
Notifying Authority: Ministry of New and Renewable Energy (MNRE).
ALMM Classification:
ALMM-1: A list of approximately 130 solar module manufacturers.
ALMM-2: A smaller group of about 17 companies that manufacture the actual solar cells for these modules. The current dispute is over the enforcement of this specific list.
Current State of India's Solar
Sector (as of late 2025):
Installed Capacity: Crossed 144 GW (growing at ~40% annually).
Module-Assembly Capacity: Roughly 210 GW.
Upstream Cell Manufacturing: Only about 27 GW.
Domestic cells currently meet only 25-30% of India's demand, leaving a heavy reliance on imports (primarily from China).
3. UPSC Mains: Arguments & Rationale
Arguments Against Immediate Enforcement (Developers' Perspective)
Severe Price Disparity: Domestic cells listed under ALMM-2 sell at approximately ₹13 per watt, compared to the imported price of just ₹5 per watt. Developers argue this ₹8-a-watt premium makes projects financially unviable.
Demand-Supply Mismatch: India's cell manufacturing capacity (27 GW) is vastly insufficient for the rapidly growing module capacity (210 GW).
Quality and Availability Issues: Out of the 17 companies on the ALMM-2 list, only six produce "high-efficiency" solar cells. Developers argue that domestic cells are not currently available in adequate quantity or quality.
Risk of Oligopoly & Profiteering: Developers argue the mandate artificially enriches a few players. An estimated premium of ₹24,000 crore a year would flow to just 4-5 top manufacturers, several of whom already receive Production-Linked Incentives (PLI). Currently, about 14 companies make up 98% of India's solar capacity addition.
Unfair Treatment: While cell manufacturers received deadline extensions due to the West Asia conflict (force majeure), project developers were denied the same consideration.
Government Rationale & Arguments For the Mandate (MNRE's Stand)
Promoting 'Aatmanirbhar Bharat' (Self-Reliance): The mandate is fundamentally designed to bridge the structural gap in India's solar expansion by reducing the heavy reliance on imported upstream cells (mainly from China).
Ensuring Policy Stability: The MNRE refused a blanket extension, stating that industry consensus favored "policy stability." Sticking to deadlines is necessary to protect investor confidence in domestic manufacturing. If the government keeps delaying mandates, domestic cell manufacturing will struggle to scale up.
Provision of Case-by-Case Relief: The government argues it is not being inflexible. Instead of a blanket deferment, it is offering case-by-case relief for projects that are already substantially built.
Institutional Mechanism for Grievances: The MNRE has constituted a four-member expert committee specifically to vet applications from developers seeking time extensions.
