India’s Solar Panel Rules Changed from June 1: How It Will Impact Your Wallet and the PM Surya Ghar Scheme

India has implemented a major change to its solar policy from June 1, requiring domestically manufactured solar cells for certain solar projects. The move is aimed at reducing dependence on Chinese imports and strengthening local manufacturing. It expands earlier rules that already required locally made solar modules for many projects, by now also mandating that the cells inside those modules come from Indian manufacturers listed under the government-approved Approved List of Models and Manufacturers, or ALMM List-II.

The new rule applies to rooftop solar projects connected to net-metering systems, including installations under the PM Surya Ghar: Muft Bijli Yojana. It also covers open-access solar projects used by business and industrial consumers. The government has moved ahead with the deadline despite requests from some developers for more time.

The policy is intended to build a stronger domestic solar manufacturing ecosystem. India has rapidly expanded its solar module production capacity and can now produce around 200 GW of modules annually. However, solar cell manufacturing remains far smaller, at roughly 30 GW per year. As a result, many modules assembled in India still rely on imported cells, with China supplying the majority. Officials believe the new requirement will encourage new investment in domestic cell production and reduce long-term import dependence.

Industry opinion on the move is divided. Larger players and some experts see it as an important step toward self-reliance, quality control, and energy security. They argue that the policy will create more demand for Indian-made solar cells and help India build a globally competitive solar industry. Supporters also say the transition may strengthen the entire supply chain over time.

However, concerns remain about price, supply, and the impact on smaller manufacturers. Industry estimates suggest rooftop solar systems could become costlier by as much as Rs 3,000 per kilowatt because Indian-made solar cells are currently more expensive than imported alternatives. For a typical 5-kW rooftop system, that could mean an extra cost of about Rs 15,000. If demand rises faster than domestic production capacity, prices may climb further.

There are also worries about supply shortages. Current domestic solar cell capacity is estimated at 25-30 GW, while annual demand is close to 50 GW. The gap has historically been met through imports, but the new rules restrict imported cells for several categories of projects. Smaller module makers are seen as especially vulnerable because they usually do not manufacture cells themselves and must buy them from larger integrated companies.

Some industry executives believe the policy could increase consolidation in the sector, benefiting large manufacturers with stronger pricing power and deeper supply chains. Standalone module assemblers may struggle, especially if they are already operating below capacity. Even so, the policy may help India build a more resilient manufacturing base over time, though the short-term transition could bring higher costs and tighter competition.