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almm: MNRE brings back ALMM for solar modules; to be in effect from 1 April 2024

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New Delhi: The Ministry of New and Renewable Energy has reimposed the Approved List of Models & Manufacturers (ALMM) for solar modules with effect from 1 April, 2024.

The earlier Order, dated 10 March 2023, stated that projects commissioned by 31 March 2024 will be exempted from the requirement of procuring solar modules from ALMM.

However, it has been decided that the relaxation in ALMM will apply to all cases where the projects are in the advanced stage of construction and the order for the modules has been placed before 31 March 2024.

According to the office memorandum dated 9 February 2024, ALMM will apply to solar rooftops and PM KUSUM, which are subsidised. It will not apply to projects set up under open access or as captive by private parties, which means that ALMM will not be applicable for people who set up their own capacity.

It added that the ALMM will apply only to those projects which are sponsored or subsidised by the government. It will apply to the government or its agencies procuring power for its own consumption or for distribution to the people through discoms.

The ALMM Order was held in abeyance for FY24. Thus, projects commissioned by 31 March 2024 were exempted from the requirement of procuring solar modules from ALMM. The MNRE issued the Approved Models and Manufacturers of Solar Photovoltaic Modules Order, 2019 on 2 January 2019. It stated that ALMM shall consist of list-I, specifying models and manufacturers of solar PV modules and list-II, specifying models and manufacturers of solar cells. First ALMM list for solar modules was issued on 10 March 2021. The ALMM list for solar PV cells has not yet been issued.

According to Girishkumar Kadam, senior vice-president and group head – corporate ratings, ICRA, the reimposition of ALMM from April 1, 2024, is a positive for these OEMs.

“The reimposition requiring solar projects awarded by central nodal agencies and state distribution utilities to source modules from solar module manufacturers listed under this order which currently comprises only domestic solar OEMs, is a positive,” he said.

He added that the scale-up in domestic module manufacturing capacity over the past 12 months is expected to improve the availability of modules from domestic OEMs. However, the sector would remain dependent on imports for sourcing solar PV cells and wafers, given the limited cell manufacturing capacity and lack of wafer capacity in India.

“In this context, setting up fully integrated units awarded under the production-linked incentive (PLI) remains important to reduce dependence on imports,” said Kadam.

From the independent power producers’ perspective, he said that this provides relief for IPPs with advanced progress in development and with expected commissioning post-March 31, 2024.

The order allows exemption from ALMM for open access-based and captive solar projects, enabling these projects to source modules from the most cost-competitive sources.

He added that based on the prevailing cost of imported solar PV cells and modules, the sourcing of imported modules is relatively cheaper than the cost of sourcing modules from domestic OEMs after accounting for the import duties.

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