Power Minister Confirms ALMM Exemption for Solar Projects for Two Years
The minister cited the insufficient domestic module supply as the reason
February 13, 2023
Confirming the Mercom exclusive from last week, the Union Minister of Power and New and Renewable Energy, R.K. Singh, has said that the government has decided to relax the Approved List of Models and Manufacturers (ALMM) for two years.
Mentioning his reasons behind the decision, the minister said the fledgling domestic manufacturing capacity is insufficient to cater to the large solar capacity addition pipeline, which could have jeopardized the goal of reaching 280 GW by 2030 from just over 60 GW currently.
“I put up a total barrier, ALMM, under which no Chinese company has been listed, so they can’t export. I put up the barrier, and at that time, Niti Aayog said it was a complete barrier. I said it was necessary. But I have expanded the bidding so fast that my existing domestic capacity is not able to meet it. As I said, I have about 70 GW of solar capacity under implementation, and the manufacturing capacity of 500 Wp (modules) and above is just 10 GW,” Singh said in an interview with Business Today.
He added that the country would take seven years if the entire module supply came only from domestic manufacturers.
“But we can’t wait seven years. So, I have just decided to relax ALMM for two years. Incidentally, some countries have gone to WTO against ALMM, we shall fight it there,” Singh said.
The decision is expected to bring relief to the solar developers who have been struggling to procure modules at a competitive price after Basic Customs Duty (BCD) was raised to 40% on modules last year. The developers were further squeezed by the mandate to source modules only from those manufacturers listed under ALMM.
According to the updated list of models and module manufacturers, the total capacity listed in the ALMM stands at approximately 21 GW and includes 83 module manufacturers.
While easing the ALMM mandate would help developers, module manufacturers have expressed fears about Chinese modules flooding the market through ASEAN countries circumventing the 40% BCD as the free trade agreements with these countries would override the import tax.
Many have even questioned the government’s uncertainty in the policy implementation, which would lead to market instability by creating doubts amongst investors.
Early last year, Mercom reported on how the developers and manufacturers in the solar sector felt about the ALMM implementation and its long-term impacts on the industry.