Late final yr, the Centre ordered builders to make use of solely particular regionally made photo voltaic panels. Since these panels value extra, builders bid increased within the photo voltaic auctions that adopted, totalling 12 GW of capability. Nonetheless, since such fashions are scarce and photo voltaic growth is a urgent want, the rule was waived for initiatives awarded in December-July—unintentionally trapping builders since discoms refuse to purchase energy on the increased worth, 4 individuals aware of the matter mentioned.
On the centre of the heartburn is India’s Accredited Listing of Fashions and Producers (ALMM), a government-endorsed record of photo voltaic panel makers and fashions that ensures solely high-quality merchandise are utilized in photo voltaic initiatives in India. Nonetheless, native manufacturing and expertise in photo voltaic panels have but to catch as much as booming demand, making a scarcity that prompted the federal government to quickly revisit the mandate. All initiatives commissioned on or after 1 June, 2026 should mandatorily use fashions within the ALMM record.
Tariff lure
An govt from a renewable energy firm which has been affected mentioned that regardless of the exemption, builders had already accounted for costlier home cells of their bids and quoted increased tariffs. “Now that they’ve been given rest and locally-made cells usually are not required, discoms are unlikely to signal energy sale agreements based mostly on the upper tariffs,” the manager mentioned on the situation of anonymity. He mentioned the federal government and regulators should give you an answer, both by means of a change in regulation or by cancelling the tenders and issuing bids once more.
Builders compete in photo voltaic tenders issued by authorities companies, factoring in doubtless prices, and count on to recuperate their prices from distribution corporations, which purchase energy from them. This implies initiatives can stall when a developer who has gained a young fails to discover a purchaser. In accordance with business analysts, the standoff with discoms may go away the initiatives stranded.
“Discoms at all times have an choice to not signal energy sale agreements for these initiatives. They could desire to attend for initiatives that are bid later with decrease tariffs. These tenders could must be cancelled, if tariffs usually are not negotiated,” an official with an influence distribution firm mentioned on the situation of anonymity.
The event comes at a time when the federal government and renewable power implementing companies already struggling to clear the backlog of unsigned energy sale and energy buy agreements. In June, Mint reported that the Centre would maintain talks with stakeholders to push the adoption of uniform tariffs for renewable power as about 30 giga watt (GW) value of PPAs are mendacity unsigned.
Stranded
“General, about 40 GW of initiatives could also be stranded as of now, together with the 12 GW which has been bid within the first six months this yr,” a second developer mentioned, highlighting the broader problem of getting state utilities to decide to new energy agreements.
A number of the main builders who’re affected embrace Adani Inexperienced Vitality and Avaada. In March, Adani Renewable Vitality Holding Twelve, a unit of Adani Inexperienced, secured a 600 MW challenge quoting ₹3.41 per kilowatt hour (kWh), whereas Avaada Vitality gained 210 MW quoting ₹3.42 per kWh. Each tenders have been issued by state-owned NHPC Ltd.
Queries despatched to Adani Inexperienced, Avaada, and the Union ministry of latest and renewable power remained unanswered.
JMK Analysis mentioned in an August report that implementing ALMM for photo voltaic cells may create a scarcity of domestic-content modules. This scarcity may delay 20-25 GW of inexperienced power initiatives over the subsequent two to a few years and improve challenge energy tariffs by as much as ₹0.5 per unit, it mentioned. A separate JMK report mentioned the latest discount of the Items and Companies Tax (GST) on renewable power tools from 12% to five% could lead builders of fifty GW of initiatives to hunt tariff revisions based mostly on the ‘change in regulation’ provision.
Cagey discoms
In accordance with knowledge from CareEdge Rankings, since 9 December, 2024, authorities have awarded renewable power capability of 12 GW until July 2025 finish, together with hybrid and round the clock (RTC) and agency and dispatchable renewable power (FDRE) initiatives. Whereas the share of plain vanilla photo voltaic capability lowered in 2025 amid a broader shift in direction of storage-based tenders, photo voltaic capability continues to be a significant factor inside hybrid and complicated challenge constructions.
“Given the relief in home cell mandate until August 2025, initiatives bid out between December 2024 until August 2025 are more likely to face delays in PPA/PSA signing by the discoms. This may occasionally in flip additionally require readability on reverse change in regulation for approval or adoption of such bid tariff,” mentioned Girishkumar Kadam, senior vice-president & co-group head at scores firm Icra Ltd. “However, implementation of reverse change in regulation may be difficult.”
Lowering prices
CareEdge Rankings estimates that utilizing cheaper, non-domestic photo voltaic modules may cut back capital prices for these initiatives by roughly ₹0.45 crore per megawatt. The common value of organising these initiatives is estimated round ₹6 crore per MW.
“The revision within the applicability timeline of ALMM-II for RE tenders may place capacities awarded at comparatively increased tariffs in the course of the December 2024-July 2025 interval in a state of uncertainty,” mentioned Jatin Arya, director at CareEdge Rankings. He added that builders may face “tariff negotiations, potential cancellations by final offtakers, or regulatory hurdles in securing approval for the bid tariffs.”
Arya mentioned that if these bids come up earlier than regulators for a downward tariff revision, the scenario may grow to be extra complicated, as builders could contend that they’ve already positioned orders with home suppliers, and reversing these may end in materials losses.
