Tweak in rules may stall ₹72,000 crore solar investments

Uncertainty clouds 12GW of renewable power capacity with a potential of ₹72,000 crore worth of investments awarded between December and July, after a well-meaning change in rules queered the pitch for developers trying to sell power to state discoms.

- Rituraj Baruah

Late last year, the Centre ordered developers to use only specific locally made solar panels. Since these panels cost more, developers bid higher in the solar auctions that followed, totalling 12GW of capacity. However, given the scarcity of such models, the rule was waived for projects awarded in December-July—unintentionally trapping developers since discoms refuse to buy power at the higher price, four people familiar with the matter said.

At the centre of the heartburn is India's Approved List of Models and Manufacturers (ALMM), a government-endorsed list of solar panel makers and models that ensures only high-quality products are used in solar projects. However, local manufacturing and technology in solar panels have yet to catch up to booming demand, creating a shortage that prompted the government to temporarily revisit the mandate. All projects commissioned on or after 1 June, 2026 will have to mandatorily use models in the ALMM list.

An executive from a renewable power company which has been affected said that despite the exemption, developers had already accounted for costlier domestic cells in their bids and quoted higher tariffs. "Now that they have been given relaxation and locally-made cells are not required, discoms are unlikely to sign power sale agreements based on the higher tariffs," the executive said on the condition of anonymity. He said the government and regulators will have to come up with a solution, either through a change in law or by cancelling the tenders and issuing bids again.