India's new solar rule mandates locally made solar cells for rooftop projects from June 1, likely raising installation costs, tightening supplies and putting pressure on smaller manufacturers.
Installing rooftop solar panels in India may be more costly from June 1. In a major move, the Indian government has mandated that all net-metering and open-access solar projects must now use only domestically manufactured solar cells. The decision has been taken to strengthen the country’s solar manufacturing ecosystem and reduce dependence on imports, particularly from China.
The transition is expected to increase installation costs and create supply-side pressure. Industry stakeholders warn that consumers, developers and smaller manufacturers may be the most affected in the short term due to limited domestic production capacity.
The new rule expands earlier requirements that only mandated domestically manufactured solar modules. Now, under the Approved List of Models and Manufacturers (ALMM) List-II framework, the solar cells inside those modules must also be made in India.
The policy applies to rooftop solar installations under schemes such as PM Surya Ghar: Muft Bijli Yojana, as well as open-access projects used by commercial and industrial consumers. Despite requests from manufacturers, the government has denied any extension to the implementation of the rule, insisting it will be enforced immediately.
Currently, India has nearly 200 GW of solar module manufacturing capacity, but only around 30 GW of solar cell capacity. With annual demand estimated at about 50 GW, the country continues to rely heavily on imports, mainly from China, to bridge the gap.
Industry estimates suggest rooftop solar installations could become around Rs 3,000 per kilowatt more expensive, adding nearly Rs 15,000 to a typical 5-kW system. Smaller manufacturers are particularly concerned as they depend on external cell suppliers and may face reduced competitiveness compared to larger integrated players.
At present, many module assembly plants are operating at just 30-40 per cent capacity utilisation, raising concerns about financial stress in the sector. Industry observers also expect potential consolidation, with stronger companies gaining market share.
Meanwhile, several manufacturers are also supporting the government’s move, saying that short-term disruptions are necessary to build a self-reliant solar manufacturing base in India. They also point out that several large utility-scale projects have been exempted, which may ease immediate pressure on supply.
Prajvi Mathur is a Sub-Editor at WION with over 2 years of experience in journalism and digital content. With a keen interest in geopolitics and national affairs, she covers a wide…Read More

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