Impact of ALMM mandate relaxation on open access, net metering projects

Gautam Mohanka
Managing Director
Gautam Solar

The Ministry of New and Renewable Energy (MNRE) recently stated that the open access and net meteringrenewable energy projects that have applied for approval from the Ministry before October 1, 2022, will not come under the ambit of the Approved List of Models and Manufacturers (ALMM). The Ministry has also exempted behind-the-meter solar power projects used for captive consumption by a consumer or group of consumers from the ALMM mandate.

The relaxation of the ALMM mandate will certainly have a positive impact on the projects under open access and net metering; this will eventually boost domestic manufacturing by encouraging manufacturers with ease of operations. With developers of the projects under open access and net metering not being mandated to buy domestically manufactured modules under the ALMM list, slowing down of the commissioning of the projects can now be significantly avoided.

Though the open access and net metering projects are cost-effective, bringing them under the purview of ALMM mandate could lead to a longer payback period for projects. Relaxing the ALMM mandate will help developers decrease the payback time since the module prices will remain stable and the demand for open access will also grow.

Also, India is still addressing a major challenge of the mismatch between the domestic manufacturing capacity and the increasing demand. Therefore, allowing developers to buy modules from outside the country will accelerate the pace in which they can commission projects under open access and net metering. This will also be an advantage for the consumers who can save more on their power bills.

ALMMrepresents the list of solar cell and module types and manufacturers in India that have been certified by the Bureau of Indian Standards (BIS). It has major positive impacts on the solar sector in the country as it ensures that the quality of photovoltaic goods entering the Indian market will significantly improve as the companies will be compelled to improve their production and efficiency to manufacture long-lasting and low-cost solar items.

Earlier in March 2022, amending the ALMM of Solar Modules (Requirement for Compulsory Registration) Order, 2019, the MNREstated that open access and net metering (rooftop solar) projects would need to source modules from the vendors listed in the ALMM from 1 October 1 2022. MNRE also stated that solar cell and module manufacturers should register under ALMM and only enlisted manufacturers can associate with the utility-scale and subsidized residential and government rooftop solar projects tendered by government agencies. However, later, the Ministry revised its mandate and included all net metering and open access projects under the ambit of ALMM.

The open access and net metering projects provide a viable alternative to procuring power from the distribution companies (Discoms), which makes them a popular choice among the consumers. Relaxing the mandate to procure only domestic goods from the ALMM listed players could significantly make these projects attractive for the investors.