ALMM List-II Rule for Rooftop Solar: Does It Affect Solar Cost and Subsidy in 2026?

On June 1, 2026, a consequential change came into effect for every rooftop solar buyer in India. The government introduced a new sourcing rule, the ALMM List-II, that determines which modules now count as MNRE-approved solar panels. A solar panel is built from many small solar cells, and the ALMM List-II rule reaches one level deeper than before.

It now requires the solar cells inside the panel to be sourced from approved Indian manufacturers, in addition to the existing requirement for the panel itself. This matters because only the panels listed in the ALMM List-II will qualify for the PM Surya Ghar Muft Bijli Yojana subsidy from now on.

As a direct effect of this change, your rooftop solar installation may cost a little more (up to Rs. 3,000 per kW), but the PM Surya Ghar Muft Bijli Yojana government subsidy stays exactly what it was. As long as your panels comply with the new rule, you can still claim financial assistance of Rs. 78,000 on a 3 kW or higher-capacity solar system.

The slight cost increase changes very little about the economics of going solar. That’s because a well-sized PV system built with MNRE-approved solar panels still covers most of your monthly electricity use (~90% to be precise), and the grid tariff you are escaping keeps climbing by 3-6% year after year. A one-time increase by a few thousand does very little to change that math. As a result, installing an on-grid rooftop solar system is still a financially rewarding choice.

In this guide, we walk you through what has actually changed, who it affects, how much extra you have to pay to go solar now, and whether rooftop solar still makes financial sense after the change.

Key Highlights

Here are some quick highlights about the ALMM List-II rule that every solar buyer must know.

• What changed? From June 1, 2026, MNRE-approved solar panels used in subsidized and net-metered projects must be built with solar cells from manufacturers listed in the ALMM List-II.
• What’s the cost impact? Industry estimates put the increase at ~Rs. 3,000 per kW.
• Who’s affected? New residential rooftop solar installations that claim the PM Surya Ghar subsidy and commercial and industrial solar projects on open access. People who already have solar installed on their rooftops are not affected at all.

What Changed in the Solar Industry in India on June 1, 2026?

MNRE (Ministry of New and Renewable Energy) introduced ALMM List-II for solar cells, and that single step changed how MNRE-approved solar panels are defined in India.

• Until now, the rules only cared about whether the module itself was made in India.
• From June 1, they also care about who makes the solar cells inside that panel.

Both the finished panel and the cells within it must now come from approved domestic manufacturers for a panel to qualify for government schemes. A panel assembled in India using imported cells no longer clears that bar. This is the government’s way of closing the last big gap in its push to make the whole product in India rather than only the final assembly.

What is the New ALMM List-II Rule that Leads to Solar Price Hike?

ALMM stands for the Approved List of Models and Manufacturers, a quality and sourcing framework administered by MNRE under its ALMM Order of 2019. It is the government’s list of solar equipment that has been checked and cleared for use in subsidized and grid-connected solar projects.

Only if your equipment is on the list can it go into these projects.

In December 2024, MNRE amended the original 2019 order to create a second list, List-II, specifically for solar cells. The start date was initially proposed as April 1, 2026, and the government later moved it to June 1, 2026, which is now in force.

The two lists now work in tandem.

• ALMM List-I: It has always governed approved solar modules, which are the finished panels.
• ALMM List-II: It governs the solar cells inside modules.

Together, these lists decide which products qualify for a subsidy project.

From June 1, any listed module used in such a project must use cells sourced only from manufacturers approved under List-II.

Who Does the New Rule Actually Affect?

If you’re either of the following, the new ALMM list-II rule affects you directly:

• Homeowners applying for the PM Surya Ghar Muft Bijli Yojana: Your installer must install MNRE-approved solar panels, meaning List-I modules built with List-II cells. Otherwise, your subsidy and net metering will not hold.
• Commercial and industrial solar buyers: Industrial and commercial solar projects are far bigger than a home solar system and need many more solar cells. So, while approved Indian cells are still in short supply, commercial projects are the ones facing the longest waits and the sharpest price increases.

If your system was installed and commissioned before June 1, the ALMM list-II rule doesn’t concern you. The rule applies only to new installations going forward.

Why MNRE Introduced ALMM List-II?

MNRE introduced List-II to address the imbalance in solar manufacturing in India.

• India makes plenty of panels but very few cells: The country can build ~200 GW of solar modules a year, while its domestic solar cell manufacturing capacity is only ~30 GW. That gap is the core problem the rule has been introduced to solve.
• Most Indian panels still use imported cells: Because of the manufacturing gap, many panels sold as Indian are actually built with imported cells, and the bulk of those come from China.
• The aim is to make the whole product in India: By mandating that MNRE-approved solar panels use approved India-made solar cells, the government wants to attract investment into local cell manufacturing and build a complete supply chain at home rather than an assembly industry that relies on imports.
• It is also about long-term security: A solar sector that makes its own cells is far less exposed to import prices, shipping delays, and supply shocks from outside the country.

The trade-off here is simple. You pay a little more in the near term, and in return, the country builds a solar industry that can stand on its own.

How Much More Will Rooftop Solar Cost Now?

While there’s no official statement on the exact price hike, industry estimates suggest rooftop solar may cost ~Rs. 3,000 more per kW under the new rule. The reason is that Indian solar cells used in MNRE-approved solar panels are not yet as cheap as the imported ones they replace.

Please keep in mind that the actual price hike will vary by vendor, location, and even the solar panel technology in question.

What Is DCR, and How Does It Connect to ALMM List-II?

DCR stands for Domestic Content Requirement, and it refers to a solar panel in which both the cells and the module assembly are manufactured in India.

For years, DCR said the cells had to be Indian, but until now, there was no reliable way to verify that they really were. ALMM List-II is that check. It’s the official list of approved Indian cell makers. From now on, your panel must use cells from that list to be considered truly made in India.

Simply put:

• DCR set the principle that the cells must be Indian
• List-II is the official register that proves a given cell manufacturer actually meets it

Despite the rule change, a common point of reassurance for homeowners is that MNRE has confirmed the DCR provisions under schemes like the PM Surya Ghar Muft Bijli Yojana remain unchanged even as the cell and wafer rules tighten. Which means you still get the same amount of subsidy as before the new rule.

What About Inverters: Is There an ALMM Requirement?

No, the new ALMM List-II rule applies to solar cells, not inverters. So, nothing about solar inverters changed on June 1, 2026. The ALMM framework covers three categories in the panel supply chain, which are modules under List-I, cells under List-II from June 2026, and wafers under List-III from June 2028.

Inverters sit outside this chain entirely, so the June 1 rule imposes no new sourcing requirement on them.

However, solar inverters do have their own quality standards, and those are worth knowing about.

• Your inverter must be BIS-certified: Grid-connected solar inverters sold in India are required to be BIS-certified under IS 16221. A PM Surya Ghar installation requires a BIS-certified, approved inverter to be eligible for the subsidy and net metering.
• Efficiency labelling became mandatory in January 2026: The Bureau of Energy Efficiency brought grid-connected inverters into its Standards and Labelling program, and compliance became mandatory from January 1, 2026, with BIS certification under IS 16221-2 and minimum efficiency levels set by capacity.

Does the PM Surya Ghar Muft Bijli Yojana Subsidy Still Apply for Homeowners?

Yes, the PM Surya Ghar Mift Bijli Yojana solar subsidy scheme continues in full, and it remains generous enough to absorb the small price rise many times over.

The central subsidy still works in the same tiered manner:

• Up to 2 kW: Rs. 30,000 per kW
• For additional capacity up to 3 kW: Rs. 18,000
• Subsidy cap for systems equal to or above 3 kWp: Rs. 78,000

Here’s a walkthrough of the exact subsidy you can receive for different-capacity solar systems in India:

The scheme is set to run only until March 31, 2027, or until 1 crore homes are solarized under it, whichever comes first. That makes the subsidy a limited-time benefit rather than a permanent one, making 2026 the best time to install rooftop solar in India.

Why is Solar Still a Strong Investment Despite the Price Rise?

Solar remains one of the most dependable investments a homeowner can make in 2026. Grid electricity tariffs in India rise by 3-6% every year. A properly sized solar system using MNRE-approved solar panels can offset ~90% of your monthly electricity bill. And since a well-marinated solar system lasts for over 25 years, the savings you’ll make over the system’s lifespan will be in tens of lakhs of rupees.

Let’s take the example of a 3 kW solar system in Pune to understand how much money rooftop solar can save when sized to a home’s actual power consumption pattern.

• Cost of a 3 kW solar system in Pune without subsidy: ~Rs. 2.15 lakh*
• Total PM Surya Ghar subsidy for 3 kW: Rs. 78,000
• Cost of a 3 kW solar system in Pune with subsidy: ~Rs. 1.37 lakh*
• Savings from a 3 kW solar system in Pune over 25 years: ~Rs. 16.12 lakh**
• ROI from a 3 kW solar system in Pune: ~10.7

*Please note the prices are subject to change. The above-mentioned solar panel price in Pune is indicative as of 11th June 2026 for the SolarSquare Blue 6ft variant. The final cost of installing an on-grid rooftop solar panel system depends on your DISCOM charges, city, product variant opted for, panel type, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc.

**Please note: When calculating savings, we have assumed a 3% annual tariff escalation and a 1% annual degradation. The actual final savings from solar installation in Pune depend on the types of solar panels you’ve installed and their efficiency, the intensity of sunlight your rooftop receives, the orientation of the panels and tilt angle, the pollution level and weather conditions in your city, the temperature, shadow on the roof, impact of dirt/dust, and how well you maintain your panels after installation.

If you want to check ROI and solar savings from rooftop solar in your city, you can use SolarSquare’s free solar savings calculator.

What to Check Post June 1, 2026, Before You Sign an Installation Contract?

A little care at the contract stage protects both your subsidy and your peace of mind. So, be sure to run through this short checklist before you sign anything.

• Confirm your installer uses MNRE-approved solar panels: In practice, this means List-I modules built with List-II cells, and it is the single most important check, because it is what keeps your subsidy and net-metering eligibility intact under the new rule.
• Ask for the model and manufacturer names: Documentation has tightened, so having the exact approved models recorded on paper protects you if any question comes up during inspection or subsidy release.
• Get the full post-subsidy price, including the new cost: A clear quote that already accounts for the price rise means there are no surprises later.

What Comes After List-II: ALMM List-III for Wafers in 2028

MNRE has set ALMM List-III for solar wafers and ingots to take effect from June 1, 2028, keeping the timeline it first proposed in September 2025. Wafers are the thin silicon slices that every solar cell is built from. So, even that base layer of MNRE-approved solar panels will have to be made in India for covered projects from 2028.

That completes a clear roadmap, with the government bringing one layer of the panel under Indian sourcing rules at a time.

• Modules came first, in 2019: List-I covered the finished panels.
• Solar cells followed in 2026: List-II is the rule that just took effect on June 1.
• Wafers come next, in 2028: List-III reaches all the way back to the raw silicon that cells are made from.

Should You Install Solar Now or Wait?

If you have been weighing rooftop solar, the case for acting now is stronger than the case for waiting, and the reason is the subsidy, not the price rise. The PM Surya Ghar Muft Bijli Yojana is set to run only until March 31, 2027, or until 1 crore homes are solarized under it, whichever comes first.

Given how quickly installations are growing in India, the cap could be reached before the deadline, closing the window for this level of support earlier than expected.

Waiting in the hope that domestic cell prices ease could mean losing a subsidy of up to Rs. 78,000 to save a few thousand rupees on equipment. Installing solar now lets you lock in today’s subsidy, start saving against rising tariffs straight away, and avoid any risk of the scheme closing before you apply.

For any further details on rooftop solar installation, you can book a free, no-obligation call with SolarSquare.

FAQs

Will solar prices reduce over time?

The current increase is tied to a near-term shortage of approved Indian cells, and that shortage is expected to ease as domestic cell capacity grows through successive ALMM List-II additions. As more approved cells reach the market, prices should drop, though the exact timing depends on how quickly capacity ramps up.

Are non-DCR solar panels banned in India in 2026?

No, they are not banned at all, but they do not qualify for subsidized and net-metered projects, which now require MNRE-approved solar panels built to the new domestic rules. Non-DCR panels can still be used in segments that fall outside these requirements.

Does the ALMM List-II rule affect only residential consumers?

No, it applies to commercial and industrial projects on open access as well as residential rooftop systems under the PM Surya Ghar scheme. The cost and supply impact is felt most strongly in the larger commercial and industrial segment.

What is the difference between ALMM List-I and ALMM List-II?

List-I is the approved list for solar modules, which are the finished panels. List-II is the newer approved list for the solar cells that go inside those modules. The two lists together define MNRE-approved solar panels for subsidized projects from June 1, 2026.

Which manufacturers are currently approved under ALMM List-II?

MNRE publishes and regularly updates the official List-II, and it has expanded the list across several revisions as more Indian cell makers qualify. Because the list changes with each revision, the most reliable way to confirm which models are approved is to check the official MNRE ALMM portal.

Are there any projects exempt from the ALMM List-II requirement?

Yes, certain projects are exempt based on when they are commissioned. Net-metering and open-access projects commissioned before June 1, 2026 fall outside the List-II cell requirement.

Does ALMM List-II apply to commercial and industrial solar projects too?

Yes, commercial and industrial projects on open access are covered and need MNRE-approved solar panels. These projects often use higher-efficiency cells where domestic supply is tightest, which is why this segment sees the sharpest near-term effect on cost and availability.

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