MNRE Extends ALMM List-II Cell Exemption for Net Metering and Open Access Solar Projects to December 31, 2026

In a move intended to settle months of industry uncertainty and regulatory flip-flopping, the Ministry of New and Renewable Energy (MNRE) issued Office Memorandum No. 283/53/2026-GRID SOLAR on July 18, 2026. The notification provides a vital seven-month extension to the exemption from the Approved List of Models and Manufacturers (ALMM) List-II for solar PV cells. This administrative reprieve, which supersedes a string of conflicting orders issued throughout May and June 2026, shifts the compliance deadline from May 31, 2026, to December 31, 2026. The intervention follows intense industry pushback regarding a “structural mismatch” in domestic cell supply that threatened to strand billions in module manufacturing investments.

Scope and Eligibility of the Extension

The updated exemption provides targeted relief for private net-metering, open-access renewable energy projects, and group captive projects—the latter often serving as the primary decarbonization vehicle for energy-intensive industries.

• Commissioning Requirement: To qualify for the exemption, projects must be fully commissioned and synchronized to the grid on or before December 31, 2026. Technical compliance is strictly tied to the date of the DISCOM inspection and synchronization certificate; the MNRE has clarified that mere installation or delivery of components to a site does not satisfy the legal requirement for exemption.
• Mandatory Compliance: Full ALMM List-II compliance becomes mandatory for these project categories starting January 1, 2027. Developers failing to meet the year-end cutoff will be required to use modules built exclusively with domestically manufactured cells sourced from the approved list.

Policy Boundaries: Mandatory Compliance Segments

The MNRE has explicitly stated that this is a limited transition window rather than a blanket reversal of the localization roadmap. The government’s stance on “No Blanket Relief” ensures that significant portions of the market remain under immediate domestic sourcing mandates.

The following project types are excluded from this extension and remain subject to immediate ALMM List-II enforcement:

• Utility-scale projects tied to DISCOM Power Purchase Agreements (PPAs).
• Projects implemented through central agencies, such as the Solar Energy Corporation of India (SECI).
• Subsidized government programs, including the PM-KUSUM scheme.
• Any projects where the bidding process concluded under existing ALMM mandates before this notification.

Government Rationale and Economic Objectives: Addressing “Double Financial Jeopardy”

The MNRE’s intervention is a pragmatic response to the “double financial jeopardy” facing standalone manufacturers. While module assembly requires a capital expenditure of roughly ₹50–80 crore per GW, backward integration into cell manufacturing is five to eight times more capital-intensive, requiring ₹250–400 crore per GW with gestation periods of 18–24 months.

• Inventory Protection: The extension allows standalone module manufacturers to clear existing inventories of modules built with imported cells, preventing a massive working capital lock-up that could destabilize the domestic manufacturing base.
• Transition Management: By providing a seven-month runway, the government aims for a “Smooth Transition” that allows domestic cell lines to stabilize and technologize without causing a total deployment freeze.
• Localization Roadmap: The MNRE continues to drive toward total self-reliance. While List-II (cells) is currently being phased in, the ministry has reiterated its long-term target for ALMM List-III (Ingots and Wafers) to come into force by June 1, 2028.

Background: The ALMM List-I and List-II Framework

The ALMM framework acts as the primary quality and localization gatekeeper for India’s solar deployment. Industry stakeholders must distinguish between module-level enlistment and cell-level sourcing requirements.

It remains a critical regulatory point that ALMM List-I compliance is never waived. All modules used in exempt projects must still be from models and manufacturers listed on List-I.

The Domestic Manufacturing Landscape and Capacity Gap

The necessity of this extension is underscored by the “mathematical impossibility” of sourcing domestic cells for the entire industry. Current data highlights a severe supply-side bottleneck:

• Structural Mismatch: India possesses approximately 193 GW of module manufacturing capacity (ALMM List-I) against only about 31 GW of approved domestic cell capacity (ALMM List-II).
• Captive Consumption vs. Open Market: Most domestic cell capacity belongs to vertically integrated players who utilize their production for their own module assembly. In real terms, only 2,558 MW (less than 1.9%) of domestic cell capacity is available to standalone module manufacturers on the open market.
• TOPCon Technology Gap: The technological lag is even more acute in next-generation formats. While TOPCon modules account for nearly 89% of approved module capacity, TOPCon cell capacity represents only 30% of the approved cell list. This phased transition is essential to prevent a total supply vacuum in the advanced technology segment.

Official Source Attribution

This report is based on the official Ministry of New and Renewable Energy (MNRE) Office Memorandum No. 283/53/2026-GRID SOLAR, dated July 18, 2026.