Solar Firms Move Karnataka High Court Against MNRE's Domestic-Cell Sourcing Mandate

Solar manufacturers and project developers have approached the Karnataka High Court challenging the Ministry of New and Renewable Energy's (MNRE) mandatory domestic solar-cell sourcing requirement, arguing that the policy could significantly increase project costs and disrupt project execution.

The writ petition, led by the Karnataka Renewable Energy Systems Manufacturers Association (KRESMA), seeks to quash or defer the Ministry of New and Renewable Energy's (MNRE) Approved List of Models and Manufacturers (ALMM) List-II mandate, which came into force on June 1, 2026. The rule requires most solar projects commissioned after that date to procure photovoltaic cells only from manufacturers approved under the government's domestic supplier list.

Industry representatives contend that the mandate has been implemented despite a substantial gap between domestic manufacturing capacity and market demand. According to the petitioners, domestically manufactured solar cells listed under ALMM List-II are priced at around INR 13 per watt, compared with imported cells available at roughly INR 5 per watt. They argue that the price differential is placing an excessive financial burden on developers and could slow the pace of solar deployment.

The petition also claims that India's current approved domestic cell manufacturing capacity is insufficient to meet the requirements of the rapidly growing solar sector. Developers have urged the court to suspend enforcement of the mandate until adequate domestic capacity becomes available and prices become more competitive.

The legal challenge comes after the MNRE declined industry requests for a blanket extension of the June 1 implementation deadline. The ministry had earlier stated that the timeline would remain unchanged following consultations with stakeholders, although it introduced a mechanism allowing project-specific exemptions in cases where substantial investments had already been committed before the mandate took effect.

In a separate move aimed at supporting rooftop solar adoption, the MNRE on June 9 announced a limited relaxation of the ALMM List-II requirement. Residential rooftop solar projects installed under the PM Surya Ghar programme without central financial assistance will remain exempt from the domestic-cell sourcing rule until March 31, 2027.

The ALMM List-II mandate forms part of the government's broader strategy to strengthen domestic solar manufacturing, reduce reliance on imports, and build a self-reliant clean energy supply chain. However, industry groups maintain that the transition should be aligned with manufacturing readiness to avoid cost escalations and project delays.

As of June 12, the Karnataka High Court had not issued any interim order or stay on the implementation of the mandate, and the matter remains under judicial consideration.