DESPITE RED FLAGS, MINISTRY REIMPOSED SOLAR MODULE LIST OF DOMESTIC PLAYERS

DESPITE RED FLAGS, MINISTRY REIMPOSED SOLAR MODULE LIST OF DOMESTIC PLAYERS - UPSC

Why in the news?

The Ministry of New and Renewable Energy reinstated the requirement that solar projects only use modules from a list of domestic producers that have been approved by the government.

Key Details

  • The Authorized List of Manufacturers and Models (ALMM): Indian solar producers that adhere to specific quality requirements are listed below. Due to the reimposition of this list, Indian solar project developers must now purchase solar modules from these domestic companies rather than from less expensive foreign suppliers.
  • Economic Context:
    • Price differential: The cost of solar projects in India has increased dramatically as local solar modules are currently roughly 90% more expensive than imports. For local modules, the price difference was 18 cents per watt, whereas for imported modules, it was 9.1 cents.
    • Impact on Solar Industry: India hopes to have 500 GW of renewable energy capacity by 2030, and the country’s solar industry has been expanding quickly. However, because of increased costs and restricted supplies, the reimposition of the ALMM might cause the project’s implementation to drag on longer.
  • Renewable Energy Targets: As part of its National Solar Mission, India has set high goals to cut carbon emissions and switch to greener energy sources. As of 2023, the nation’s installed solar capacity amounted to 63.3 GW, and by 2025, an additional 30 GW was planned.
  • Stakeholders and industry experts: They are worried that the reimposition may make projects less competitive in the global market, increase project costs, and cause delays in schedules. The Ministry used the necessity to uphold quality standards in the solar industry and encourage self-reliance as justification for its decision.