India is on track to commission more solar capacity in 2026 than in any year in its installation history, with full-year additions forecast to exceed 50GWdc, according to report from research analyst Wood Mackenzie.
The report titled ‘From Modules to Cells: India Deepens its Solar PV Push’ said that India added 34GWdc of solar capacity in the first half of 2026, 38% above H1 2025 levels, as developers accelerated project commissioning ahead of the June deadline for the Approved List of Models and Manufacturers-II (ALMM-II).
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India’s Ministry of New and Renewable Energy (MNRE) mandates that all government-backed projects subject to the ALMM source solar modules from ALMM List-I, solar cells from ALMM List-II and solar wafers from ALMM List-III.
The analysis found that utility-scale system prices are set to rise 20% by Q4 2026 as the policy driving the record build-out creates a domestic cell supply crunch. The 50GWdc forecast surpasses the previous record of 49GWdc set in 2025.
“India’s ALMM-II mandate is a bold step toward building a fully integrated domestic solar supply chain, but cell manufacturing capacity has simply not kept pace with modules,” said Sureet Singh, research analyst at Wood Mackenzie. “The near-term cost impact is unavoidable, and developers will need to navigate a difficult transition period before prices stabilise.”
Installations surge ahead of ALMM-II deadline, but slowdown follows
As per the report, the 34GWdc added in H1 2026 reflects a concentrated push by developers to complete projects before ALMM-II took effect.
The accelerated build-out was further supported by the phased removal of waivers for inter-state transmission charges. The waiver fell from 75% to 50% for projects commissioned from July 2026 onwards and is set to be phased out entirely after July 2028.
Momentum is expected to slow in H2 2026 as cell capacity constraints and rising module prices weigh on project development.
However, ALMM-II waivers granted for net metering and open access projects until 31 December 2026 could provide upside to the installation forecast. The MNRE also agreed in July 2026 to waive the mandate for projects approaching completion, requiring applicants to have submitted applications by 23 July 2026.
Import dependency and cell capacity
While ALMM-II has reduced India’s direct cell imports from China, sourcing has shifted towards Southeast Asia, with Indonesian cell imports nearly tripling in early 2026.
India imported 5GW of wafers and 20GW of cells in the first five months of 2026. Wafer imports climbed 86% year-on-year as manufacturers sought additional supply to support domestic cell production.
The country has imposed a 20% basic customs duty on imported cells and modules. In September 2025, the Directorate General of Trade Remedies (DGTR) recommended additional anti-dumping duties of up to 30% on Chinese-origin solar cells and modules.
The recommendation is pending a final decision from Central Government.
The measures make Indonesian-origin supply an increasingly attractive alternative, although Wood Mackenzie expects circumvention scrutiny could follow given the pattern of Chinese cell rerouting observed in other markets.
Additionally, any delay to the 14GW of new cell manufacturing capacity currently under construction risks deepening import reliance and driving prices beyond current estimates, the report warned.
A further 130GW of cell capacity is expected to come online by 2029, requiring a compound annual growth rate of 49% from the 2026 full-build baseline of 88GW.
The expansion is intended to close the gap between India’s rapidly expanding module manufacturing base and the cell capacity required to support it under ALMM-II.
Prices to remain elevated through 2027
The supply constraint is expected to translate into higher system prices, with utility-scale system prices forecast to rise 20% by Q4 2026 as cell availability tightens.
Even as new cell capacity comes online, Wood Mackenzie expects insufficient utilisation to keep supply short of demand in 2027. Cell production is projected to reach 29GW next year, still falling 21GW short of average annual module demand of 50GW.
“Prices are expected to stabilise through 2029 as additional cell capacity comes online, but the transition will require policy consistency and timely execution by manufacturers,” said Mathew Thomas, research analyst at Wood Mackenzie.
“The rollout of ALMM-II may follow ALMM-I’s pattern of multiple exemptions, though the impact should be more contained given greater preparedness among suppliers, developers and policymakers. The MNRE’s plan to implement ALMM-III in June 2028, extending the mandate to solar wafers, signals that India’s domestic content ambitions are far from complete.”
As a result, system prices are forecast to decline by just 3% between Q4 2026 and Q4 2027.
