India’s solar sector is entering a decisive new phase. Starting September 1, 2025, all tenders require developers and installers to use solar modules compliant with the Approved List of Models and Manufacturers (ALMM) List -II for solar cells.

While the government’s push for domestic manufacturing is widely supported, the transition is expected to be uneven, with developers warning of cost increases and possible delays, and manufacturers racing to add capacity in time.

Developers Reassess Procurement

Sarika Bhatia, Whole-Time Director at Servotech Renewable Power System, describes her company’s cautious strategy. “Rather than rushing into bids, we believe a wait-and-watch stance ensures that we align our projects with both compliance requirements and evolving market conditions.”

She estimates that transitioning to ALMM List-II compliant cells could increase project costs by about 3% to 5%, potentially nudging tariffs up by ₹0.10 (~$0.0011) to ₹0.20 (~$0.0022)/kWh. However, she believes these costs will eventually stabilize as domestic manufacturing ramps up.

Servotech has already secured preliminary supply arrangements and built flexibility into its procurement plans by diversifying suppliers. While the company anticipates a rush to secure modules before the deadline, Bhatia doesn’t foresee a severe shortage, considering the phased rollout of the ALMM for cells initiative.

Other developers are more wary. Karan Kalra, CEO at Solluz Energy, says his company is drawing a clear line between projects before and after the exemption date. “For bids closing before the exemption date, we are proceeding with non-DCR modules. For bids beyond it, we’re automatically factoring DCR-compliant panels.” He expects project costs to spike by as much as 40%, with increased volatility in the short term until new suppliers enter the market.

Solluz hasn’t finalized supply deals yet, but Kalra believes availability won’t be the biggest hurdle. Instead, he warns that projects tendered after the exemption period will face bottlenecks during testing and commissioning, while projects already in the pipeline will move forward largely unaffected. “A short postponement could help ease the pressure,” he said. “But what we really need is a strong and steady domestic demand base that supports long-term self-reliance.”

Vyomaa Energy’s Head of Operations, Rahul Kodali, says the company will prioritize tenders with commissioning timelines that align with ALMM List-II deliveries. “Underbidding could expose us to both shortages and higher procurement costs.”

Vyomaa is diversifying its supplier base across two to three mid-tier players, exploring newer technologies such as TOPCon and back-contact modules, and factoring in tariff cushions. The company expects tariffs to increase by up to 25 %.

Kodali warns that certification delays could slow projects down by six to nine months. Between August and December 2025 alone, India will need 8–10 GW of ALMM-II compliant cells—more than the country’s current capacity can handle.

Supply Crunch Fears

Across the sector, there is a consensus that supply will be tight.

WattSun Energy’s Founder and CEO, Terance Alex, supports the ALMM-II policy in principle, but contends that to get the supply chain fully in place will require up to two years.

“Otherwise, we’re staring at material shortages that could stall progress.” As a result, WattSun has decided to steer clear of government tenders for now, waiting until market conditions improve.

Alex highlights a price difference of ₹8 (~$0.091) to 10 (~$0.114)/W between DCR and non-DCR cells, warning that with fewer than ten manufacturers currently on the list, demand will quickly outstrip supply and slow down implementation. WattSun has already signed agreements for 150 MW of ALMM List-I modules, though it hasn’t secured List-II cells yet. He expects testing and commissioning schedules to become congested and favors a postponement to give manufacturers breathing space.

Opinions diverge on the severity of the crunch. Servotech expects bottlenecks but not major disruptions, while Vyomaa predicts that smaller rooftop players will struggle the most, as utility-scale developers can negotiate bulk supply contracts.

Mark B. Garvin, CEO at WorldOne Energies, expects the shortage to last at least a year. He points out that current List-II cell capacity stands at just 13 GW. His Nagpur-based firm has 1.2 GW of module capacity and is pursuing ALMM enlistment and is actively talking with cell manufacturers.

Certification Challenges

Even if supply expands, certification remains a challenge. Kodali warns that testing agencies are already stretched thin and could face delays of six to nine months once List-II compliance takes full effect. WattSun echoes this concern, expecting backlogs in inspection appointments.

Others, though, are more optimistic. Servotech believes that proactive engagement with certifying bodies can help sidestep delays. Premier Energies’ Director, Vinay Rustagi, adds that in their experience, the process was relatively smooth. “Once we submitted our application, certification took just over a month. We didn’t face any major bottlenecks.”

Manufacturing Expansion

Manufacturers are scaling up, but not all in the same direction. Premier Energies currently operates 3.2 GW of cell capacity and has another 5.2 GW under construction, all of which Rustagi says will be ALMM-II compliant by August 2026. Approximately half of its output is allocated to the company’s own modules, while the remainder is sold externally. Orders for compliant cells are already coming in, though he acknowledges that domestic cells will remain in short supply for at least another year. Prices, he notes, are currently stable.

Saatvik Green Energy is making one of the more ambitious bets, investing in Odisha with plans for a 4.8 GW solar cell line and a 4 GW module line. The module facility is scheduled to be operational in FY26, with the cell line following in FY27. CEO Prashant Mathur expects an increase in costs, with tariffs projected to increase by ₹0.40 (~$0.0045) to ₹0.50 (~$0.0057)/kWh because domestic cells are still more expensive than imports.

Mathur points out that ALMM List-II was only published on July 31, 2025, making it a relatively new framework, and that mandatory compliance for cells only begins on June 1, 2026. Still, he views the long-term outcome positively, saying the policy will strengthen India’s self-reliance. He adds that module capacity has already doubled from 38 GW in March 2024 to 91 GW by June 2025.

WorldOne Energies is taking a different approach by focusing on wafers and ingots. Garvin argues that this is where the real strategic opportunity lies for India’s solar sector in the years to come.

The next 12 to 18 months will be critical. If supply expands quickly enough, India could emerge with a stronger, self-reliant solar base. If not, projects risk stalling, particularly in price-sensitive segments where cost competitiveness remains razor-thin. For now, the industry is caught between optimism about long-term resilience and anxiety over short-term disruptions.