Context

Recently, the government is implementing the policy of an Approved List of Models and Manufacturers (ALMM), which will restrict solar power project developers from depending on imported panels. 

ALMM Programme: Government Initiative to Promote Domestic Solar Modules Manufacturing

• Restrictions on Imports: The ALMM Programme was created to restrict imports from China, which controls a large percentage of the global solar supply market.
• Renewable Energy Targets: India expects to generate approximately 500 GW of electricity from non-fossil fuel sources by 2030, with solar power accounting for at least 280 GW. 
  • This means building at least 40 GW of solar energy each year until 2030. So, there is a need to focus on indigenous solar projects.

Incentive for authorized companies: Authorized companies will be entitled to bid for government tenders for its main solar energy programmes, including the recently announced PM solar rooftop yojana.

Need for Policy Implementation

• Reducing Import Dependency: India wants to reduce its reliance on imported solar panels, notably from China, which accounts for over 80% of the global supply.
• Promoting Domestic Industry: The ALMM programme seeks to develop the domestic solar panel manufacturing industry by certifying enterprises with recognised production facilities, allowing them to compete for government contracts.

Challenges and Considerations

• Limited Domestic Capacity: India’s domestic solar sector is currently unable to match demand for solar panels, necessitating imports to complete installations.
• Competitive Pricing: Despite paying for government certification, domestic producers struggle to compete with cheaper Chinese imports.
• Quality Assurance: While boosting domestic manufacture, thorough quality checks are critical to keeping solar electricity affordable and reliable for customers.
• Unrealistic Targets: Despite lofty goals, India’s solar capacity increases have been rather low in recent years, thanks in part to the COVID-19 virus. The country plans to increase installations to between 25 and 40 GW each year.

Conclusion

India’s ALMM programme intends to increase domestic solar Modules Manufacturing, in line with aggressive renewable energy targets. Address issues such as reaching targets and lowering reliance on imports through strategic planning and assistance.