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Will ALCM Trigger Faster Consolidation Among Indian Solar Manufacturers? Photograph: (AI)
The recent rollout of the Approved List of Models and Manufacturers (ALMM) for solar cells, or ALCM (as it is commonly referred to in industry parlance), has triggered a new debate in India’s solar manufacturing landscape.
While the move, spearheaded by the Ministry of New and Renewable Energy (MNRE), is expected to provide a significant boost to India’s largest solar cell manufacturers, it has also raised concerns among several mid-sized and small solar module makers. As per the latest ALMM-II (for solar cells) mandate, Indian solar module manufacturers can use only domestically sourced solar cells (DCR cells). 
This comes at a time when more than half of India’s solar module manufacturers have announced plans to establish their own solar cell manufacturing facilities, while others have decided against making such large capital investments. Many CEOs of small and mid-sized solar module manufacturers, who are typically reluctant to publicly comment on policy matters, are now openly voicing their concerns about the mandate. This is one of the rare occasions in India’s solar industry where stakeholders have become highly vocal, either supporting the policy or strongly opposing it.
The sensitivity of the issue is also evident in the level of opposition it has generated. While some industry players have expressed their views through the media and social media, others have approached the judiciary seeking legal intervention. For instance, the Karnataka Renewable Energy Systems Manufacturers Association (KRESMA) has moved the Karnataka High Court, seeking judicial intervention in the matter.
The top management of several leading solar manufacturers has already hinted that the coming years are likely to favour integrated solar manufacturers, making it increasingly challenging for smaller and mid-sized players that entered solar manufacturing during India’s solar boom. Recent investor calls suggest that as India moves toward stricter domestic sourcing requirements under future phases of the Approved List of Models and Manufacturers (ALMM), companies are preparing for a more capital-intensive and integrated manufacturing environment.
The strongest public articulation came from Vikram Solar. During its FY26 earnings call, the company said: “The cell-level mandate effective June 2026 is a critical milestone. It forces a shift from assembly to true manufacturing.” Management further added: “Given the barriers of capital access, technology, execution capability, and customer intimacy and a regulatory framework that requires integration, only a few will sustain.”
The company said its internal view is that the industry could ultimately stabilize around 80–100 GW of sustainable integrated manufacturing capacity concentrated among a limited number of full-stack players.
Similar themes have emerged across the industry. Emmvee stated: “Scale alone is no longer sufficient. Integration, technology alignment and execution reliability are becoming the defining factors for long-term competitiveness.”
Alpex Solar linked its expansion roadmap directly to policy-driven domestic manufacturing requirements and said its move into wafer and ingot manufacturing is being shaped by the government’s localization framework. Saatvik Green Energy similarly described backward integration as central to building a fully integrated energy manufacturing platform.
However, the transition may not be without disruption. A CEO of a solar module manufacturing company that started operations within the last three years told Saur Energy that interest in strategic transactions is beginning to emerge across various segments of the industry.
According to the executive, a number of smaller, recently established and some mid-sized solar manufacturers are already exploring capital partnerships, stake sales or strategic exits as future competitiveness increasingly shifts toward scale and integrated manufacturing capabilities.
The executive added that the market may gradually become difficult for businesses operating solely at the module assembly level unless they pursue deeper backward integration, secure long-term sourcing arrangements or develop differentiated business models.
At the same time, not all companies believe implementation will be seamless. Solex Energy has said that domestic cell supply remains constrained and noted that several manufacturing lines are still under construction. The company also indicated that module manufacturers have approached the government seeking additional time for compliance with the upcoming sourcing requirements.
Whether this results in acquisitions, closures or a concentration of market share remains to be seen. However, investor commentary across the sector increasingly suggests that India’s next solar manufacturing cycle may be determined less by announced module capacity and more by access to capital, manufacturing depth and control over the value chain.
While a large number of solar module manufacturers have announced plans to enter solar cell manufacturing and strengthen backward integration, the journey is unlikely to be easy for everyone.
Manish Gupta, Chairman and Managing Director of Insolation Energy (INA Solar), recently told Saur Energy that solar cell manufacturing is significantly more complex and demanding than solar module manufacturing.
He explained that it requires substantially higher capital investment, a greater number of approvals and clearances, more advanced machinery and a highly skilled workforce. Beyond capital expenditure, companies must also address challenges related to skilled manpower, technical expertise and the stabilization of solar cell production lines.
According to the Red Herring Prospectus (RHP) of Premier Energies, which listed on the Indian stock market within the last three years, delays in obtaining visas and the inability of Chinese experts to visit India on time extended the stabilization period of its solar cell manufacturing lines. This highlights some of the practical challenges involved in establishing solar cell facilities, including dependence on China for equipment, training and technical support, as well as broader geopolitical considerations.
Abhinav Mahajan, Director at IB Solar, also said during a podcast with Saur Energy that, similar to the Chinese solar module industry, the Indian solar manufacturing sector is likely to move toward consolidation over time.
However, given the current circumstances and the rollout of ALCM, many industry participants believe the consolidation process could accelerate. The sector may witness an increasing number of acquisitions involving smaller and mid-sized companies, with consolidation occurring at a much faster pace than previously anticipated.
Industry executives believe the rollout of ALCM could accelerate consolidation in India’s solar manufacturing sector through acquisitions, strategic stake sales, partnerships and market exits, as manufacturers race to build integrated cell and module production capabilities.
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