Centre sets June ‘26 deadline for solar companies to adopt India-made solar cells

MNRE plans to boost domestic solar cell manufacturing to reduce costs and increase capacity by 2027.

In a step towards discouraging foreign imports of components used in solar panel manufacturing, the Ministry of New and Renewable Energy (MNRE) has set a deadline of June ‘26, after which solar companies must use only India-made solar photovoltaic cells in their panels to participate in government procurement programmes.

“With installed capacity of solar PV cells in the country expected to increase substantially in next year, it has been proposed to issue List-II of solar PV cells under ALMM, which shall be effective from 1 st June 2026,” says an office order from the MNRE, issued earlier this month.

‘List -II’ refers to a list of companies that make solar cells. Indian solar companies primarily rely on solar cells from China and Southeast Asia. Relying on domestic supplies is however likely to make solar power costlier.

Schemes such as the Rs 75,000 crore PM rooftop-solar programme, PM Kusum programmes that part pay the cost of installing solar panels to urban and rural consumers, must source panels from domestic companies approved by the MNRE.

“The price of Indian solar cells are 1.5 time to twice that of those from China even after Basic Customs Duty. Such high prices can drive up the cost of capital cost of solar power projects by Rs 5-10 million per megawatt. This will raise tariffs by 40-50 paise per unit,” said Sehul Bhatt, Director- Research, Crisil Market Intelligence and Analytics in a statement.

So far 92 gigawatt of solar capacity has been installed in India. Currently India has installed solar-module manufacturing capacity of about 63 GW and solar-cell manufacturing capacity of about 5.8 GW. Government and industry estimates expect that 80 GW of module capacity will be added by 2027 and cell manufacturing capacity rise to 60 GW by FY27, with Rs 30,000 crore in investments.

Earlier this year, the MNRE introduced a list of Approved List of Module Manufacturers. Those setting up solar installations and wishing to avail of government subsidies necessarily had to source modules only from these manufacturers. These lists are part of a larger government strategy to encourage domestic production of solar panels, however India still lacks the capacity to manufacture components used in cells such as wafers and ingots and will continue to depend on China and South east Asia for these. The Adani group has set up a 2GW wafer-manufacturing facility in Gujarat and by 2027 expects to be India’s first ‘integrated manufacture’ company – meaning it will make every component required to make complete photovoltaic panels.