Given the challenges faced by the solar power developers in sourcing modules from domestic OEMs, the Ministry of New & Renewable Energy (MNRE), vide its order dated March 10, 2023, has put the requirement to source modules from the Approved Models and Manufacturers (ALMM) under abeyance for solar projects to be commissioned till March 31, 2024. Commenting on the same, Vikram V, Vice President & Sector Head - Corporate Ratings, ICRA, says, “This is a near-term positive for solar power developers and provides them with the flexibility to source modules at the most cost-competitive rates. The cost of sourcing imported modules, including the impact of basic customs duty (BCD), remains competitive in relation to the cost of sourcing modules from domestic OEMs using imported solar PV cells to manufacture them. This is following the sharper decline in module prices over the past six months compared to the decline seen in solar PV cell prices. While the abeyance of ALMM requirement could adversely impact the order inflow for the domestic OEMs in the near-term, the healthy demand from export markets is likely to partially offset this impact. While the scale-up in domestic module manufacturing augurs well for the solar power sector, the lack of backward integration and limited capacity for cell manufacturing keeps the module manufacturers dependent on imports for sourcing solar PV cells. The module exports witnessed a sharp increase in 10M FY2023 supported by increased demand from the US amid the restrictions imposed on module sourcing from China as well as the ramp-up in the domestic manufacturing capacities.