Installing rooftop solar systems in India is all set to become more expensive from June 1 after the Centre enforced a new rule mandating the use of domestically manufactured solar cells in several categories of solar projects.
This development is aimed at strengthening India’s solar manufacturing ecosystem and reducing dependence on imports, particularly from China, but industry players warn it could lead to higher installation costs and short-term supply constraints.
What is the new solar rule?
According to the Ministry of New and Renewable Energy, all net-metering and open-access solar projects must now use solar modules that contain India-made solar cells. Earlier, only the solar modules themselves were required to be domestically manufactured under the government’s Approved List of Models and Manufacturers (ALMM) mechanism.
The updated requirement falls under ALMM List-II and applies to rooftop solar installations under schemes such as PM Surya Ghar: Muft Bijli Yojana as well as commercial and industrial open-access projects.
Despite repeated requests from manufacturers seeking more time, the government has decided to implement the rule without any extension.
ALSO READNext energy challenge: Cheap power, costly transition
Why is the government pushing for domestic cells?
According to a report from The Indian Express, the policy forms part of India’s push for self-reliance in renewable energy manufacturing and reducing reliance on Chinese imports across the solar supply chain.
While India has significantly expanded its solar module manufacturing capacity to nearly 200 GW, domestic solar cell production remains much lower at around 30 GW. Industry demand, however, is estimated at nearly 50 GW annually, forcing manufacturers to continue depending heavily on imported cells.
The government believes stricter localisation rules will encourage fresh investments in cell manufacturing and strengthen India’s long-term energy security.
How much more could rooftop solar cost?
Industry estimates suggest rooftop solar systems may become around Rs 3,000 per kilowatt more expensive because of the transition to domestic cells. For a standard 5-kW residential rooftop installation, this could increase the overall cost by nearly Rs 15,000.
The price rise is expected mainly because domestically produced solar cells currently cost more than imported alternatives and supply remains limited.
ALSO READIndia’s energy investment to hit record $170 billion
Smaller manufacturers may face pressure
The new mandate is also expected to create challenges for smaller solar manufacturers and installers. Many module assembly companies currently rely on imported cells or third-party suppliers and may struggle to secure enough domestic cells at competitive prices.
The policy could also trigger consolidation within the sector, with larger integrated manufacturers potentially gaining market share.
TOPICSSolarSolar EnergyThis article was first uploaded on June one, twenty twenty-six, at nineteen minutes past seven in the evening. © IE Online Media Services (P) Ltd