ALMM expansion to wafers signals next phase of solar manufacturing consolidation
The amendment introduces ALMM List-III for wafers, with implementation contingent upon the establishment of at least three independent players with a combined capacity of 15GW across ingot and wafer production. While certain exemptions have been provided such as projects nearing bid deadlines and select open-access installations; the broader direction is clear: future solar projects will increasingly be required to source components entirely from domestically approved supply chains.
This policy shift is expected to significantly reshape industry dynamics. The current module manufacturing landscape remains fragmented, with multiple small-scale players contributing to pricing pressure and margin compression. The combined enforcement of ALMM-II (cells) and ALMM-III (wafers) is likely to accelerate consolidation, favouring players with integrated capabilities spanning the full manufacturing stack. Such integration not only enhances control over costs but also improves supply reliability and margin resilience.
Capacity expansion plans already underway indicate that the industry is preparing for this transition. Several manufacturers have announced large-scale investments in ingot and wafer facilities, with timelines aligned ahead of the enforcement trigger. This suggests growing confidence in the long-term policy framework and demand visibility, particularly as domestic solar installations continue to scale.
From a demand-supply perspective, the move strengthens India’s ambition to reduce import dependence and build a self-reliant renewable energy ecosystem. However, execution risks remain. The success of the policy will depend on timely capacity creation, technological competitiveness, and the ability of domestic players to match global cost benchmarks.
In the medium term, the sector appears well-positioned for structurally higher profitability, driven by improved pricing power, better capacity utilisation, and reduced external supply shocks.
As the ecosystem transitions toward vertically integrated manufacturing, companies with early investments in upstream capabilities are likely to emerge as key beneficiaries.
Overall, the extension of ALMM to wafers represents a pivotal step in India’s solar manufacturing journey – one that could redefine competitive positioning while reinforcing long-term sectoral growth.
Waaree Energies: Target Price- ₹3,514
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(Disclaimer: This article is by Motilal Oswal Financial Services Research Desk. Views expressed are their own. )
