NEW DELHI: India’s domestic content requirement for solar cells is set to increase rooftop solar system costs by up to Rs 30,000 for households. Industry experts weigh the impact on consumers, project economics, and the country’s expanding solar manufacturing capacity.
Households planning to install rooftop solar systems may have to pay more as the domestic content requirement (DCR) for solar cells comes into force from June 1, with industry estimates suggesting installation costs could rise by around ₹4,000-6000 per kilowatt, translating into an additional ₹20,000-₹30,000 for a typical 3-kW rooftop system.
The mandate requires solar projects connected through net-metering and open-access arrangements to use domestically manufactured solar cells, a move aimed at strengthening India’s solar manufacturing ecosystem and reducing dependence on imported equipment.
The cost impact is expected to be most visible in the rooftop solar segment. Alekhya Datta, Director, Electricity and Renewables Division at TERI, estimated that a typical 3-kW rooftop solar system using DCR-compliant equipment could cost between ₹1.8 lakh and ₹2.1 lakh, compared with around ₹1.5 lakh for a non-DCR system, implying an additional cost of about ₹30,000.
Industry participants said the price differential stems from higher domestic cell and module prices. According to an industry representative, 550 Wp solar modules are currently priced around ₹24 per watt, while TOPCon 610+ Wp modules are being quoted at ₹26-27 per watt. In comparison, non-DCR 620 Wp modules remain available at around ₹13-15 per watt, creating a significant pricing gap for rooftop as well as commercial and industrial consumers.
Anujesh Dwivedi, Partner, Deloitte India, said domestically manufactured modules and cells are currently being quoted at around ₹25-27 per watt, compared with approximately ₹21-22 per watt earlier. “Higher equipment costs could increase pressure on project economics and compress returns, particularly for competitively bid utility-scale solar projects operating under fixed tariffs,” he said.
Dwivedi said Gujarat and Maharashtra, which account for more than 30% and 20% respectively of India’s cumulative large-scale solar installations, are likely to witness the greatest impact if projects face cost adjustments or delays. “Maharashtra, Uttar Pradesh and Punjab could also experience pressure in rooftop solar deployments under the PM Surya Ghar: Muft Bijli Yojana,” he said.
However, solar manufacturers maintain that the mandate will not lead to shortages or significant disruptions. Amit Manohar, Secretary General of the Indian Solar Manufacturers Association (ISMA), said India currently has around 30 GW of solar cell manufacturing capacity recognised under the MNRE’s ALMM-II notification, while estimated domestic demand during FY27 is expected to remain at 20-25 GW.
He said most utility-scale projects scheduled for commissioning this year are covered under grandfathering provisions and therefore remain outside the ALMM-II requirements. According to ISMA, an additional 30 GW of domestic cell manufacturing capacity is under commissioning and expected to become operational between June and September this fiscal.
Manufacturers also contend that tariffs discovered after the ALMM-II framework was announced have already factored in domestic sourcing requirements. Manohar cited GUVNL’s 500 MW solar tender, where tariffs were discovered at ₹2.34 per unit, marginally below pre-August 2025 levels despite the use of domestically manufactured cells.
Dwivedi, however, cautioned that the immediate transition period following June 1 could witness temporary supply tightness, particularly for advanced technologies such as TOPCon and HJT cells, amid rising demand from schemes such as PM Surya Ghar, which is targeting more than 10,000 rooftop installations per day.
Vinay Rustagi, Chief Business Officer at Premier Energies, said India already has around 33 GW of operational cell capacity, with another 20 GW expected to come online during the year. He added that pipeline projects have either received relief from domestic sourcing requirements or been given 18 months to prepare for compliance, reducing the likelihood of implementation delays.
While the industry remains divided over near-term cost implications, the mandate marks a significant step in India’s effort to build a domestic solar manufacturing ecosystem and reduce dependence on imported cells.
Source: The Financial Express
