The government’s move to extend the Approved List of Models and Manufacturers (ALMM) framework to solar wafers marks a major step toward building a fully integrated domestic solar manufacturing ecosystem, but industry stakeholders warn that a sharp gap in upstream capacity and a tight compliance window could disrupt supply chains and bidding behavior.

According to Mercom Research, India had roughly 2 GW of wafer manufacturing capacity, compared with about 210 GW of module capacity and 27 GW of cell capacity as of December 2025, highlighting the scale of the upstream gap the new policy seeks to address.

 

The Ministry of New and Renewable Energy has expanded the ALMM framework to include wafers under a new List III, with full compliance expected from June 2028. The policy also introduces a cut-off mechanism under which projects bidding just seven days after the issuance of the first list of wafer manufacturers may be required to source modules, cells, and wafers from ALMM-listed manufacturers.

Stakeholders support the intent behind the move with a caveat: execution risks could emerge if capacity addition and timelines do not align with policy ambition.

Capacity Gap Raises Concerns

“India’s domestic wafer manufacturing capacity, while growing, is still in its early stages relative to the scale the ALMM List III will eventually demand,” said Amod Anand, Co-Founder and Director at Loom Solar.

That gap has become the central concern as the policy focuses on upstream manufacturing. While module and cell manufacturing have expanded rapidly in recent years, wafer capacity has lagged, creating a structural imbalance.

Stakeholders believe that a meaningful ramp-up is achievable by 2028, but only if investments are supported by stable policy.

Manufacturers indicated that bridging the gap will require targeted incentives, faster clearances, access to technology partnerships, and the development of upstream capabilities such as polysilicon and ingot production.

High Capital Barriers

The framework’s eligibility criteria also highlight their potential impact on market participation. The initial wafer list will be issued only if it includes at least three independent manufacturers with a combined capacity of 15 GW, and each manufacturer must also have possessed ingot manufacturing capacity equivalent to the wafer capacity it seeks to list.

“The ingot wafer linkage requirement reflects sound policy intent, but we should be candid about the scale of commitment it demands,” Anand said.

A 5 GW ingot-wafer facility typically requires around 100–125 acres of contiguous land, along with assured access to water, reliable power, and skilled manpower. Facilitating large parcels of incentivized land within integrated clusters can significantly ease project execution and improve overall viability,” said Avinash Hiranandani, Vice Chairman and Managing Director at RenewSys India.

He estimated capital expenditure at roughly ₹10 billion (~$108 million)/GW for integrated ingot and wafer facilities, with smaller plants costing more per GW, highlighting the economies of scale required for viability.

“Wafer manufacturing cannot be looked at in isolation. If you import ingots and cut them here, there will be significant wastage. It has to be an integrated setup,” Hiranandani said.

Tanmoy Duari, Chief Executive Officer at AXITEC Energy India, pointed out that the requirement introduces significant complexity due to the need for advanced technology and long gestation periods.

At the same time, Prashant Mathur, Chief Executive Officer at Saatvik Green Energy, noted that such integration is essential to move beyond partial manufacturing and build a complete domestic supply chain.

Risk of Limited Supplier Pool

Concerns over capacity are closely tied to the size of the initial supplier base. A limited number of qualifying manufacturers could create bottlenecks across the value chain, particularly for module and cell producers.

“If List III launches with only two or three qualified manufacturers, module and cell makers could face meaningful sourcing constraints,” Anand said.

Vasanthi Sreeram, Chief Technology Officer at Websol Energy System, noted that in the initial phase, a limited supplier base may require closer coordination and more structured procurement planning, although ongoing capacity expansions are expected to gradually improve supplier diversity.

A narrow supplier pool may reduce flexibility and increase dependence on a few vendors, making production planning more complex.

Stakeholders draw parallels with the rollout of ALMM List II for solar cells, where compliant supply initially struggled to keep pace with demand.

The wafer segment, which remains the least developed part of India’s solar manufacturing ecosystem, could face similar pressures, with implications for both manufacturing output and project execution timelines.

Cost Pressures

Cost implications are expected to follow supply constraints. Domestic solar cells are currently priced at about $ 0.077 per watt, compared to around $0.042 per watt for imported cells, reflecting a gap of roughly 45% even after duties. A comparable premium is anticipated for wafers in the early years of compliance.

“The short-term premium is the cost of building a resilient and self-reliant solar ecosystem,” Anand said.

Hiranandani emphasized that power is one of the largest cost components in ingot manufacturing, and access to low-cost electricity will be critical to the viability of domestic production.

Sreeram said the impact of module pricing will depend on factors such as capacity utilization, quality consistency, and manufacturing efficiency, with a learning curve expected in the early phase. She also highlighted the importance of a reliable power supply and emerging solutions, such as battery energy storage systems, in improving manufacturing stability.

Limited domestic availability is likely to push input costs and module prices, particularly in the initial phase. Market participants said this could translate into upward pressure on tariffs, especially for projects operating on tight margins.

She added that while input costs may rise initially, they are expected to stabilize over time as capacities scale, operational efficiencies improve, and deeper value-chain integration is achieved, ultimately supporting more stable module pricing and tariff discovery.

Mathur indicated that while tariffs may rise in the short- to medium-term, they may stabilize as capacity expands and supply improves

Seven-Day Timeline

If capacity is one concern, timing is another. The seven-day cut-off tied to the issuance of the first wafer list has become a key point of friction.

“Seven days is a very compressed window for an industry operating on procurement cycles that typically span months,” Anand said.

Procurement, contracting, and project planning cycles in the solar sector often span several months, making a short transition period difficult to accommodate. Industry participants said developers and manufacturers require advance visibility on approved suppliers and time to renegotiate contracts.

Sreeram suggested that a phased implementation would allow manufacturers to prioritize quality and process stability, particularly given the direct impact of wafer quality on module performance. She also noted that the requirement to notify the list only after a minimum level of capacity is available is a pragmatic step, but developers will still need to strengthen supplier engagement and forward procurement strategies to manage the transition.

Duari emphasized the need for coordination across the value chain, while Mathur noted that projects already under execution would find it particularly challenging to adjust sourcing within such a limited timeframe. The experience with ALMM List II suggests that tight timelines can lead to delays and execution challenges.

Balancing Ambition with Execution

While industry stakeholders support the policy’s direction, many have called for improvements to ensure smoother implementation. Suggestions include phased compliance, higher thresholds to ensure adequate competition, and longer transition timelines.

Manufacturers emphasized that gradual scaling and ecosystem development will be critical to maintaining deployment momentum while domestic capacity builds.

The success of the decisive push toward upstream self-reliance will depend on whether capacity can scale in time, timelines align with industry realities, and the transition is managed without disrupting India’s solar growth trajectory.