As Solar Cell Line Plans Face Delays, ALCM Rollout Could Trigger a New Crisis

India’s solar industry is showing visible unease over the proposed rollout of the Approved List of Models and Manufacturers (ALMM) for solar cells—commonly referred to as ALCM in industry parlance—as delays in building domestic cell capacity raise concerns over supply shortages and potential project disruptions.

Over the past two years, more than 40 module makers had announced plans to enter solar cell manufacturing, largely in anticipation of the government’s push for backward integration. But many of these projects are now running behind schedule, even as the deadline for ALCM implementation approaches. This can be attributed to on-ground challenges, including high capital requirements, land acquisition hurdles, shortage of skilled manpower, dependence on specialised equipment, multiple regulatory clearances, and the inherently complex, process-driven nature of cell manufacturing—distinct from relatively simpler module production lines.

ALCM Deadline Apprehensions 

The worry is straightforward: once ALCM kicks in, developers and manufacturers will have to rely on domestically produced cells. The problem is that supply may not be ready in time—especially for the non-DCR segment, which currently drives the bulk of India’s solar installations.

“Today, DCR demand is only about 10–12 GW, while the total market is roughly 50 GW,” said Ashok Singh, President (Solar Cells) at Novasys. “If ALCM is implemented in the current situation, the non-DCR market could shrink to 10–15 GW, implying a sharp drop in installations. At present, the effective supply of TOPCon cells is only around 10–12 GW. How will the industry cater to such high demand when supply itself remains a key constraint?”

Industry executives say such a mismatch could ripple across the value chain—leaving module factories underutilised, slowing project execution, and pushing up costs. “At least for the next 18–24 months, capacity utilisation will remain under pressure because domestic cell supply won’t be sufficient,” Singh added. “The intent of self-reliance is right, but the transition needs to be phased.”

Tale of Two Transitions-Modules & Cells 

The comparison with the earlier rollout of ALMM for modules is often cited—but manufacturers argue the two transitions are not comparable. “Cell manufacturing is far more complex than modules,” said Manish Gupta, Chairman of Insolation Energy (INA Solar), a listed firm. “It involves chemical and thermal processes, along with specialised infrastructure like ETP and ZLD systems. Setting up a plant takes 15–24 months in India—it cannot be done in a few quarters.”

While the Ministry of New and Renewable Energy (MNRE) had signalled the transition timeline in advance, execution bottlenecks have persisted. The DCR segment—including schemes such as PM-KUSUM and PM Surya Ghar—will continue to rely on domestic cells, but scaling production for the broader market remains a work in progress. Costs are another sticking point. “Cell manufacturing requires investments of around ₹500 crore per GW,” Gupta noted. “Prices will soften over time as capacity scales up and efficiencies improve, but competing with China in the near term will be difficult.”

ALCM To Boost R&D

Even so, not everyone in the industry is pessimistic. “When ALMM was introduced for solar modules, there were similar concerns. But the industry adapted,” said Nitin Sangle, CEO of the Sunray vertical at Kosol Energie. “This is part of a larger push towards self-reliance. There could be short-term disruptions, but it will strengthen the ecosystem in the long run.” Companies are already moving towards captive cell capacities, and many believe this phase could accelerate technological development and reduce import dependence over time.

For now, however, the immediate concern is policy timing. Several manufacturers have approached courts seeking relief, while others are urging the government to consider a more gradual implementation. The expectation in the industry is that the MNRE may offer some flexibility—either through deadline extensions or transitional provisions.

The argument is not against the policy itself, but against the pace. With challenges ranging from high capital costs and equipment supply delays to land acquisition hurdles and skilled manpower shortages, companies say the ecosystem needs more time to align with the policy ambition. A rushed rollout, they warn, risks creating temporary dislocation in a sector that has been one of the fastest-growing segments of India’s energy transition.

Tentative Solar Cell Manufacturing Plans (As Announced Till Nov 2024)

Source: Saur Energy Research. Data mainly based on interviews with Saur Energy, Red Herring Prospectus (RHP), DHRP & other documents. The numbers pertain to the claims of the companies made till Nov 2024 (the latest figures might be different).