Solar modules: Chinese players get a six-month window

The decision by the Ministry of New and Renewable Energy (MNRE) to extend the Approved List of Models and Manufacturers (ALMM) by six months to October could provide short-term relief for running solar projects. With this, Chinese module makers can supply Indian non-governmental solar projects for the next six months.

However, the introduction of import tariffs or the Basic Customs Duty (BCD) of 40% on modules and 25% on cells that came into force on Friday could be a drag on Chinese panel buyers, according to analysts.

On March 28, the MNRE extended the ALMM implementation deadline to October 2022 from April 1. Under the amendment, all open access, net metering and government projects for solar development were required to use only ALMM-approved modules.

So far, the ministry has approved 10.9GW of capacity only for domestic manufacturers, barring all Chinese and foreign players from participating in Indian projects. It is widely seen as a non-tariff barrier to promote domestic manufacturing.

Manjesh Nayak, director at Oorjan Cleantech, said the postponement of the deadline is a temporary relief for running projects and addresses developers’ concerns about network connectivity. However, for the policy to be effective, it is important to enroll brands in the ALMM in a transparent and time-limited process. It must also be in step with technological advances.

It should be noted that India’s 3 GW cell manufacturing capacity is less than 1% of China’s manufacturing capacity.

“Capacity building should be our main focus. A more systematic solution to addressing our reliance on imports is to incentivize supply, through means like the PLI, rather than discouraging or restricting demand,” Nayak said.

The MNRE’s decision on January 14, 2022 to include open access and net metering projects in the approved list of ALMMs for solar modules meant that Indian non-residential rooftop projects were prohibited for Chinese manufacturers. On January 14, MNRE amended the ALMM standards, stating that only BIS-approved ALMM modules would be eligible for use in open access and net metering projects. Previously, the ALMM entry was must-have for government supplies and government-supported projects. The changes will come into effect on April 1, 2022. Chinese solar panel makers supply 85% of India’s module needs.

The ALMM was seen as a protective hedge to prevent developers from hoarding panels ahead of the implementation of import tariffs from April 1. reduce negativity around ALMM,” said Puneet Goyal, co-founder of SunAlpha Energy.

“We are seeing a 20% increase in panel prices from the March price of Rs 22/wattpeak due to the basic tariffs in April,” Goyal said.

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