Domestic Cell Requirement Creates Solar Module Shortage in India

India's solar manufacturing sector is poised for a significant shift in the coming years, with the introduction of the June 2026 Domestic-Cell Rule. This rule mandates that all projects covered by the Approved List of Models and Manufacturers (ALMM) must use domestically made cells, which are listed in the government's List-II. The ALMM currently lists about 228 GW of modules against only 37 GW of cells, indicating a substantial gap in the cell market.

The State of Solar PV Manufacturing in India 1H 2026 report, published by Mercom India, highlights the stark disparity between module and cell capacities. In the first half of 2026, India added 50.6 GW of module capacity and 9.7 GW of cell capacity, bringing the end-June totals to 261.7 GW of modules and only 36.6 GW of cells. The ALMM lists about 228 GW of modules against 37 GW of cells, underscoring the challenge of meeting the new domestic-cell requirement.

The ALMM, which came into force on June 1, 2026, has already caused a significant shortage of cells, necessitating a shift in the sourcing of solar components. This shift has led to a rise in the price of compliant modules, with prices for TOPCon modules, a common high-efficiency type, ranging from $0.11/W FOB for Chinese TOPCon to $0.23-0.26/W for Indian TOPCon with domestic cells, required for subsidised projects. This price gap has become a significant concern for rooftop buyers, particularly those participating in the PM Surya Ghar: Muft Bijli Yojana, a government initiative aimed at installing solar panels on 1 crore homes by 2026.

The PM Surya Ghar: Muft Bijli Yojana targets 14.8 GW of rooftop installations, with subsidies designed to cover the higher costs of using DCR (Domestic Cell Requirement) modules. However, the higher costs of DCR modules have led to a slowdown in project activity. In the first half of 2026, cell and module imports rose by 18% compared to the same period in 2025, with cells making up 81% of those imports. The United States accounted for 92% of India's solar exports during the same period, underscoring the global nature of the solar component market.

For homeowners, the introduction of the domestic-cell rule means that the cost of solar panels on a subsidised rooftop system has increased, although the PM Surya Ghar subsidy is designed to partially offset this cost. Homeowners in Behror, Neemrana, and Kotputli, for instance, are advised to check their eligibility for the subsidy early, choose DCR-compliant panels from reliable installers, and plan their projects to avoid supply shortages. The PM Surya Ghar subsidy aims to make the installation of solar panels more accessible, but the current market dynamics suggest that the cost of compliance will be a significant hurdle for many homeowners.

In summary, the June 2026 Domestic-Cell Rule has created a cell shortage in India's solar manufacturing sector, with implications for both project activity and the cost of solar installations, particularly for rooftop buyers. The rule highlights the challenges of transitioning to a more domestically focused solar market and the need for policy support to ensure that the benefits of solar energy are accessible to all.