Verde Solaire - a solar energy company
ALMM deadline extension impact on solar industries
Government of India through its office memorandum dated 10.03.2023 has kept in abeyance the ALMM order for one year i.e. FY 2023-24. Thus solar projects commissioned by 31.03.2024 will be exempted from the requirement of procuring Solar PV modules from ALMM. This order is a big relief to solar energy companies and solar plant developers.
Over the last two years, the implementation of ALMM and 40% BCD had effectively closed the doors on imported solar panels. Majority of solar plant installations were with imported (Chinese) solar panels before this. Once both these issues came into effect the prices of solar panels - both domestic and imported - rose substantially.
Indian manufacturers of solar panel did not have the capacity to cater to the demand, so the prices rose accordingly (25% BCD on solar cells was also a factor) as there was a demand-supply mismatch. The payback period for installing a solar power plant for factories etc. therefore became longer thus making the installation of solar energy system unviable for many. The solar industry started feeling the pinch as the new orders for solar plant installation were less resulting in less solar capacity addition.
There is also quality differential between domestic and imported (mainly Chinese) solar panels. There are many Chinese manufacturers of solar panels who are in tier-1 category but very few Indian companies qualify for tier-1. Over the last two years many Indian manufacturers of solar panels have started to ramp up the capacity. The MNRE scheme of PLI will also help in ramping up the capacity of solar panels in India. However these factories will take time to start production of solar panels and hopefully will be ready to cater to the demand of installation of solar power plants after a year or so.
The impact in the prices of solar panels due to this decision has been immediate. Solar panels prices from tier -1 manufacturers are already much lower than the Indian manufacturers. Needless to say the quality of the Chinese solar panels I am mentioning are equal if not better than the Indian companies.
Punit Singh,
Director, Verde Solaire Pvt Ltd