India’s solar manufacturing sector entered a new regulatory era on June 1, 2026, when the Ministry of New and Renewable Energy’s ALMM List-II mandate took effect, requiring every solar module installed in government-backed, net-metered, and open-access projects to contain cells made by a domestically approved manufacturer. For Pahal Solar, a Surat-based solar energy company that spent the past eight months building exactly that capability, the timing was deliberate — the Gujarat manufacturer secured its ALMM List-I module approval in February 2026, signed a 500 MW encapsulant supply agreement with RenewSys in December 2025, and broke ground on a 2 GW TOPCon solar cell plant in October 2025 to integrate the full production chain before the law changed.
The company, which featured as the designated AI-powered module partner at Goa’s inaugural Solar & Storage Expo just days before the mandate went live, now enters the post-June 1 market in a position few smaller Indian module makers can match: building the cells its modules require, rather than competing for the small open-market supply that analysts say covers less than 2 percent of standalone manufacturers’ collective needs.
The ALMM List-II policy was designed to deepen India’s solar value chain beyond module assembly. Until now, India had built 193 gigawatts of approved module manufacturing capacity while domestic solar cell production stood at just 31 GW — roughly one-sixth the volume. The mismatch is sharpest in TOPCon, the cell architecture that now accounts for nearly 89 percent of India’s approved module output. Of India’s approximately 172 GW of approved TOPCon module capacity, only around 10 GW of domestically approved TOPCon cell manufacturing existed as of the policy’s effective date, according to analysis published by Down to Earth on June 3.
That gap creates an acute supply problem for the roughly 138 standalone module assemblers — companies that laminate and frame cells into panels but do not manufacture the cells themselves — who collectively hold about 134 GW of module capacity. After integrated manufacturers use approximately 28,579 MW of cell output for their own captive production, only about 2,558 MW is available on the open market, meeting less than 1.9 percent of standalone manufacturers’ requirements.
Binit Das, programme manager for renewable energy at the Centre for Science and Environment, noted that many cell manufacturers use their own production internally, leaving limited supplies available to standalone assemblers. “The concern around ALMM List-II is that the requirement to use domestically manufactured solar cells is coming into effect at a time when domestic cell manufacturing capacity is still much lower than module manufacturing capacity,” Das told Down to Earth.
Rounak Muthiyan, founder of EPC firm Kalpa Power, added a further complication: new cell lines require a minimum of six months of stabilization before they can reliably deliver the performance consistency that generation-guarantee contracts demand. “For developers, independent power producers, or EPC companies that need to provide generation guarantees, it is an extremely sensitive matter,” Muthiyan said.
The 2 GW cell plant Pahal Solar is building in Surat will produce TOPCon cells — a next-generation architecture that generates measurably more electricity from the same surface area than the previous industry standard, PERC (Passivated Emitter and Rear Cell), while degrading more slowly over a panel’s 25-year lifespan.
TOPCon stands for Tunnel Oxide Passivated Contact. The technology, developed at Germany’s Fraunhofer Institute in 2013, adds an ultra-thin silicon dioxide layer — approximately 1 to 2 nanometers thick — to the rear surface of an n-type silicon wafer, along with a phosphorus-doped polycrystalline silicon film deposited on top of it via plasma-enhanced chemical vapor deposition (PECVD). This layered structure enables a quantum-mechanical effect called tunneling: electrons generated by incoming photons pass through the oxide barrier to reach the external circuit, while the barrier simultaneously blocks the reverse flow that causes recombination losses. The result is a higher open-circuit voltage and better fill factor than PERC cells can achieve. In mass production, TOPCon cells routinely reach 24 to 25.2 percent conversion efficiency; leading manufacturers have demonstrated 26 percent in pilot lines. PERC cells, by contrast, typically achieve 21 to 22 percent. N-type TOPCon panels also degrade more slowly — at 0.27 to 0.4 percent per year versus roughly 0.5 percent for standard p-type PERC — meaning they generate more cumulative electricity over their warranted life.
The manufacturing cost of a TOPCon cell line is substantially higher than a standard module assembly facility. Establishing 1 GW of solar cell manufacturing capacity requires investment of approximately ₹250 crore to ₹400 crore — five to eight times the ₹50 crore to ₹80 crore required for 1 GW of module assembly. Cell lines also require a gestation period of 18 to 24 months before reaching stable production yields. That capital barrier is precisely why most of India’s 138 standalone module makers did not build cell capacity, and why integrated players are now structurally better positioned under the new policy.
Pahal Solar’s existing facilities in Olpad, Surat, already deploy AI-integrated quality control using electroluminescence (EL) imaging — a technique in which a weak electrical current passes through completed panels, causing defective cells to emit characteristic luminescent signatures that a trained deep-learning model identifies in under 30 seconds per panel. The approach detects micro-cracks, broken contact fingers, and shunting defects invisible to human inspectors at production-line speeds, and is being extended to the new cell plant to maintain output consistency from the first stages of cell fabrication through final module assembly.
The regulatory timing coincided with a public moment for Pahal Solar in its home market. The company served as the official AI-powered module partner at the Solar & Storage Expo Goa 2026, held on May 28 at Novotel Goa Panjim — the first dedicated renewable energy expo in the state, drawing government ministers, developers, EPC contractors, and investors from across India.
Nitin Barvaliya, Pahal Solar’s Vice President, was among the speakers at the event, which opened with a ceremonial lamp-lighting inauguration led by Shri Ramkrishna Alias Sudin Dhavalikar, Goa’s Minister for Power, New and Renewable Energy, and featured a special address from Shri Sanjeev Joglekar, Member Secretary of the Goa Energy Development Agency. Shri Shripad Yesso Naik, Union Minister of State for New and Renewable Energy, attended as Chief Guest.
The expo’s Goa Energy Excellence Awards 2026, felicitated by MLA Shri Rodolfo Fernandes, recognized regional solar excellence. Kunde Solar Solutions received the Solar EPC Company of the Year — Residential award, accepted by partner Sahil Kerkar. Solstar Ultima LLP took the Best Rooftop Solar Installer — Residential prize, accepted by Dinesh Naik, Partner and Business Development Head. The awards highlighted Goa’s growing local solar installation ecosystem at the precise moment when national policy is reshaping who can supply the modules those installers use.
For homeowners and businesses commissioning rooftop solar after June 1, 2026, the ALMM List-II mandate introduces a new compliance layer. Net-metering projects commissioned on or after June 1 must use modules whose cells are sourced from an ALMM List-II approved manufacturer. For residential projects under the PM Surya Ghar Muft Bijli Yojana scheme — which offers direct subsidies of up to ₹78,000 per household — modules must be both ALMM List-I approved and made with ALMM List-II certified cells to qualify.
DCR-compliant modules now carry a cost premium of roughly ₹8 to ₹10 per watt over non-DCR modules, according to industry data. For a typical 3 kW residential rooftop system, that translates to an additional upfront cost of approximately ₹24,000 to ₹30,000 before subsidy offsets are applied.
Ganesh Moorthi, Chief Technology Officer at Luminous Power Technologies, acknowledged the near-term supply constraint for rooftop solar but described the broader trajectory positively. “The implementation of the Domestic Content Requirement mandate from June 1 marks a significant step towards strengthening India’s solar manufacturing ecosystem and advancing the vision of a self-reliant renewable energy sector,” Moorthi said, adding that continued government support could accelerate capacity expansion and enable a smoother transition.
Ishver Dholakiya, founder and managing director of Goldi Solar, put the policy’s intent even more directly: “ALMM List-II is more than a compliance measure; it is India’s clearest signal yet that the next phase of the solar transition will be built on domestic capability, not import dependence.”
The government has signaled that the current policy is not the endpoint. In March 2026, MNRE announced ALMM List-III — an extension of the approved-list framework to cover solar ingots and wafers, the upstream input material for cell manufacturing. List-III is scheduled to take effect from June 1, 2028, pushing the Atmanirbhar Bharat domestic manufacturing strategy one level further up the photovoltaic value chain. For solar energy companies like Pahal Solar, whose new Surat complex includes both the 2 GW TOPCon cell plant and a 2 GW aluminum frame production unit expected to commission by late 2026, the 2028 deadline sets the next milestone for whether to extend vertical integration to the wafer stage.
India’s Q1 2026 solar additions jumped 143 percent year-over-year to 15.3 GW — a record driven in part by developers accelerating project execution ahead of the June 1 deadline. As of April 30, 2026, ALMM List-II total enrolled cell capacity stood at 30.3 GW per the 7th revision of the list. India’s peak power demand hit 270.8 GW on May 21, 2026 — a national record — with solar accounting for nearly one-fifth of electricity supply. The country experienced power shortages on 13 of the last 15 nights in April, underscoring both the scale of the buildout and the grid management challenge that accompanies it.
For a solar energy company in the market to supply that buildout under the new rules, vertical integration into domestic cell manufacturing is no longer optional infrastructure — it is the compliance structure itself.
What is India’s ALMM List-II solar cell mandate?
India’s Approved List of Models and Manufacturers List-II, which took effect June 1, 2026, requires all solar modules used in government-backed, net-metered, and open-access renewable energy projects to be manufactured using solar cells made by an MNRE-approved domestic manufacturer. The policy is designed to build a self-reliant Indian solar supply chain and reduce dependence on imported cells, particularly from China.
What are TOPCon solar panels and how do they differ from PERC?
TOPCon (Tunnel Oxide Passivated Contact) panels use a 1 to 2 nanometer silicon dioxide tunnel oxide layer on the cell’s rear surface, deposited via plasma-enhanced chemical vapor deposition, to reduce electron recombination losses and increase conversion efficiency to 24 to 25 percent — roughly 2 to 3 percentage points higher than standard PERC cells. TOPCon cells also degrade more slowly over a 25-year lifespan, making them less expensive on a levelized cost-per-kilowatt-hour basis even when the upfront price per watt is higher.
Which solar energy companies in India benefit from the ALMM cell mandate?
Vertically integrated manufacturers that produce both solar cells and modules — including companies like Pahal Solar that are building domestic cell capacity in Gujarat — are positioned to supply compliant modules without depending on the open market. Standalone module assemblers that do not manufacture cells face a significantly constrained open-market cell supply, with industry estimates suggesting less than 2 percent of their collective module capacity is serviceable with domestically available cells.
How does the ALMM mandate affect rooftop solar buyers in India?
Homeowners and businesses commissioning rooftop systems after June 1, 2026 must use ALMM List-II compliant modules to qualify for net-metering connections and government subsidies, including the PM Surya Ghar scheme’s subsidy of up to ₹78,000. DCR-compliant modules carry a current cost premium of roughly ₹8 to ₹10 per watt over non-compliant alternatives, adding approximately ₹24,000 to ₹30,000 to a standard 3 kW residential installation before subsidy offsets.
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