Wood Mackenzie forecasts utility-scale solar system costs will rise 20% by Q4 2026 as ALMM-II cell capacity constraints tighten. EPC contractors who bid on H2 2026 projects at pre-June pricing face direct margin exposure. This article gives you the data and the playbook.
- 01Current Solar Module Prices in India
- 02What Is Driving Prices Up — and Down
- 03The Cost Impact on a Typical EPC Project
- 046 Margin Protection Strategies
- 05Price Outlook Through 2027
- 06ALMM-II Compliant Manufacturers
- 07What to Avoid in This Market
- 08Key Takeaways
India's solar market in 2026 is a study in contradictions. Installation volumes are at an all-time high — 34 GWdc added in H1 2026 alone, 38% above H1 2025 levels. The pipeline is enormous. And yet, for EPC contractors on the ground, margin pressure has never been more acute.
The reason is ALMM-II — the MNRE mandate that came into force in June 2026, requiring solar modules used in government-supported projects to be manufactured from domestically produced cells. The policy is strategically sound. The near-term supply chain reality is brutal. India's domestic cell capacity stood at roughly 88 GW in 2026 against annual module demand trending toward 50 GW — but utilisation rates remain insufficient, and Wood Mackenzie forecasts system prices rising 20% by Q4 2026 as cell availability tightens.
For contractors who won tenders in Q4 2025 or Q1 2026 at pre-ALMM-II module prices, this is not a future risk. It is a present reality that is already compressing margins on active projects. This guide gives you the complete picture — what is driving prices, what the numbers actually look like today, and the margin protection strategies that experienced procurement teams are using right now.
Current Solar Module Prices in India — August 2026
Module pricing in India has two distinct tracks in 2026: ALMM-I compliant modules (the broader list, covering finished modules), and the narrower universe of ALMM-II compliant modules (modules made with domestically manufactured cells, mandatory for government projects from June 2026). The price gap between these two categories is now a hard procurement reality.
| Module type | ALMM status | Relative price level | Price trend (vs. early 2026) | Availability |
|---|---|---|---|---|
| Mono PERC (non-DCR, imported cells) | ALMM-I only | Lower end of market | ↓ Broadly stable | Good |
| Mono PERC (DCR, domestic cells) | ALMM-I + II | Moderate premium over non-DCR | ↑ Increased significantly | Tight |
| N-Type TOPCon (non-DCR) | ALMM-I only | Slightly above PERC non-DCR | ↓ Marginal softening | Good |
| N-Type TOPCon (DCR, domestic cells) | ALMM-I + II | Higher — meaningful ALMM-II premium | ↑ Increased sharply | Very tight |
| Bifacial TOPCon (DCR, domestic cells) | ALMM-I + II | Highest — premium technology + DCR | ↑ Increased sharply | Scarce |
| Imported modules (non-ALMM, private projects only) | Not ALMM | Lowest — global oversupply benefit | ↓ Softening (private use only) | Good (private only) |
The ALMM-II price gap is now the defining procurement variable
- ALMM-II mandatory from June 1, 2026 for all government-funded projects — SECI, NTPC, state DISCOM, PM-KUSUM, PM Surya Ghar
- ALMM-II exemption extended to December 31, 2026 for net metering and open access projects only
- MNRE waived ALMM-II for projects nearing completion that submitted applications by July 23, 2026 — if you missed this window, full compliance applies
- India's certified domestic cell capacity is a fraction of total module production capacity — meaning the compliant supply pool is structurally small relative to demand, creating upward price pressure on ALMM-II modules
- Anti-dumping duties of up to 30% on Chinese-origin solar products were recommended by DGTR in September 2025 — final notification still pending but adds further cost uncertainty
What Is Driving Module Prices Up — and What Is Holding Them Down
The price picture for solar modules in India in 2026 is the result of two opposing forces — upward pressure from domestic policy and compliance requirements, and downward pressure from a globally oversupplied module market. Understanding both helps procurement teams identify where they have room to manoeuvre.
ALMM-II domestic cell mandate
Modules for government projects must now use domestically manufactured cells. India's cell capacity is far below module capacity — this supply-demand mismatch drives a ₹8–10/Wp compliance premium.
Impact: Meaningful price premium on ALMM-II compliant modules vs. non-DCR
20% Basic Customs Duty on imported cells
Chinese solar cells at USD 0.042/Wp rise to USD 0.053/Wp after 20% BCD and 7.5% AIDC — adding ₹0.93/Wp landed cost even before module assembly margins.
Impact: Significant landed cost addition on imported cell-based modules
Rush demand in H1 2026 depleted inventory
34 GW installed in H1 2026 as developers raced to commission before ALMM-II — depleting compliant module inventory across all major manufacturers. Lead times stretched to 10–14 weeks for DCR product.
Impact: Supply squeeze persisting into Q3–Q4 2026
ISTS charge waivers reducing — adding project cost
Inter-state transmission charge waivers fell from 75% to 50% for projects commissioned from July 2026. Full phase-out by July 2028. This adds to total project cost, squeezing overall EPC economics even where module prices hold.
Impact: Additional project cost burden — varies by project location and capacity
Global module manufacturing oversupply
Global module manufacturing capacity exceeds 1,100 GW against ~650 GW of installation demand in 2026. China's massive overcapacity keeps ex-factory module prices near historic lows at USD 0.085–0.15/Wp.
Benefit: Private project module costs remain suppressed
Competitive EPC bidding keeps contractor pressure high
India's EPC market remains intensely competitive. Developers routinely push for lower tariffs, squeezing EPC margins even as procurement costs rise. This limits how much cost increase contractors can pass through in negotiations.
Challenge: Absorption pressure remains on EPC firms
What This Means for a Typical EPC Project
Understanding the procurement cost gap: bid stage vs. current market
Since modules typically account for nearly half of total EPC project cost, even a moderate increase in procurement price creates a significant gap between what was priced at bid stage and what must be paid today. Every contractor's situation is different — project size, contract terms, payment schedules, and supplier agreements all affect the actual impact. But the direction is clear: procurement costs are higher now than they were at the time most H1 2026 bids were submitted, and that gap needs active management.
“The near-term cost impact is unavoidable, and developers will need to navigate a difficult transition period before prices stabilise.”
— Sureet Singh, Research Analyst, Wood Mackenzie, August 2026
Lock in module prices before they rise further
Headsup B2B connects EPC contractors to ALMM-II compliant modules from Waaree, Tata Power Solar, Vikram, and Adani Solar — with competitive pricing, verified stock, and 60-day procurement credit.
6 Margin Protection Strategies for EPC Contractors in H2 2026
Lock in ALMM-II module pricing now — before Q4 tightening
Wood Mackenzie forecasts the steepest price increases in Q3–Q4 2026 as cell capacity constraints peak. Contractors with active or upcoming projects should place forward purchase orders for ALMM-II compliant modules now — even for projects commissioning in Q1 2027. Price lock-ins with confirmed delivery schedules protect against Q4 spot market premiums.
↗ Forward orders typically offer better pricing than spot Q4 procurement
Separate module procurement from EPC bid pricing — use escalation clauses
For new tenders, negotiate procurement price escalation clauses tied to MNRE-notified indices or published spot module prices. A 3–5% escalation provision for module costs protects you from the kind of 15–25% price movement seen in H1 2026 without requiring you to overbid on base rates and lose tenders.
↗ Shifts a meaningful portion of price risk to the developer contractually
Evaluate non-DCR modules for open access and private C&I projects
ALMM-II is mandatory only for government-funded projects. For open access, captive, and C&I solar — where developers are private — non-DCR modules remain fully eligible and carry a materially lower price than DCR-compliant equivalents. Deliberately segmenting your project portfolio between DCR-mandatory and DCR-optional projects optimises your blended procurement cost.
↗ Non-DCR modules are materially cheaper — significant saving on qualifying projects
Build a 3-supplier shortlist for ALMM-II compliant modules
Single-supplier dependency for DCR modules is a critical risk when supply is constrained. Qualify at least 3 ALMM-II listed manufacturers (Waaree, Vikram Solar, Adani Solar, Premier Energies, Tata Power Solar are current major List-II certified manufacturers) and maintain framework agreements with at least 2. Backup qualification takes 2–3 weeks; do it now, not mid-project.
↗ Eliminate single-source supply disruption risk
Use procurement credit to time purchases at price dips
Module prices are not uniformly high — they dip when developer rush periods end and supply catches up temporarily. A pre-approved procurement credit facility allows you to act immediately when a price dip window opens, rather than waiting for internal financial approvals or working capital availability. The cost of 45-day credit is invariably less than a 3% price premium avoided.
↗ Buy at dips, not at peaks — credit as timing tool
Re-examine BOQ line items for BoS cost offsets
When module costs rise, review the full BOQ for BoS components where market prices have fallen. DC cables, mounting structures, and inverters are all subject to different price dynamics. A structured BOQ review often finds ₹10–20L of cost offset that partially compensates for module price increases without quality compromise.
↗ Recover ₹10–20L per project from BoS optimisation
Solar Module Price Outlook: What to Expect Through 2027
Peak price pressure — tightest ALMM-II supply window
Post-H1 rush depletion + ALMM-II compliance in full effect + no new cell capacity commissioned yet. Worst pricing environment for DCR module procurement. Avoid spot buying if possible.
Partial stabilisation — new cell capacity begins coming online
Waaree, Premier Energies and Adani Solar cell expansion capacity enters production. ALMM-II exemption for open access expires December 31. Some price relief on DCR modules expected but limited.
Meaningful price stabilisation begins
Additional cell capacity from PLI-backed manufacturers reduces supply squeeze. DCR module premiums expected to moderate from current peaks. Better procurement environment for projects tendering now.
Full price stabilisation — per Wood Mackenzie forecast
Wood Mackenzie predicts prices stabilise by 2029 as more cell capacity becomes operational — contingent on consistent policy and timely manufacturer execution. 130 GW of additional cell capacity is slated to come online by 2029.
ALMM-II Compliant Module Manufacturers
Verified domestic cell manufacturers with ALMM List-II certification
- Waaree Energies — India's largest module manufacturer; integrated cell capacity; ALMM-II certified across multiple wattage ranges
- Adani Solar — Integrated cell and module manufacturing; strong ALMM-II supply for SECI/NTPC projects
- Vikram Solar — ALMM-II certified; strong presence in utility-scale government tenders
- Tata Power Solar — Integrated EPC + manufacturing; ALMM-II certified modules
- Premier Energies — Listed on NSE/BSE; ramping ALMM-II cell capacity through PLI scheme
What to Avoid in the Current Market
High-risk procurement behaviours in an ALMM-II constrained market
- Spot procurement for large volumes — spot prices in Aug–Sep 2026 carry the highest premiums; forward orders with framework suppliers are significantly cheaper
- Accepting ALMM-I certificates as ALMM-II compliance — these are separate lists; ALMM-I (module) is not sufficient for government projects post-June 2026
- Sourcing from Southeast Asian cell manufacturers without verifying ALMM-II eligibility — Indonesian cell imports nearly tripled in early 2026 as India pivoted away from China, but not all such imports qualify for ALMM-II compliance
- Assuming the waiver still applies to your project — the July 23, 2026 application deadline for the MNRE completion waiver has passed for most contractors
Key Takeaways
Solar module prices for ALMM-II compliant product are up 15–25% since January 2026.
Wood Mackenzie forecasts further 20% system cost increases by Q4 2026. This is not a temporary blip; it reflects a structural supply constraint that persists until 2028–29.
The ALMM-II compliance premium is now ₹8–10/Wp.
On a 10 MW project, that is ₹80–100 lakh of additional cost versus non-DCR modules. For contractors who bid at pre-June rates, this directly hits active project margins.
Private C&I and open access projects have an important cost advantage through December 2026.
ALMM-II exemption for these segments means non-DCR modules are still eligible — at ₹22–26/Wp vs ₹32–40/Wp for DCR product. Portfolio segmentation is a real cost optimisation lever.
Forward purchasing and price-lock agreements are the most effective near-term protection.
Spot procurement at Q3–Q4 2026 ALMM-II module prices is the highest-cost scenario. Framework supplier agreements and forward orders are the procurement standard for any EPC firm bidding on H2 2026 or FY27 projects.
Prices will stabilise — but not until 2028–29.
Any contractor building a multi-year project pipeline should factor elevated DCR module pricing into bid models for at least the next 6–8 quarters.
Frequently Asked Questions
How much have solar module prices risen in India in 2026?+
ALMM-II compliant (DCR) module prices are up roughly 15–25% since January 2026, and Wood Mackenzie forecasts a further 20% rise in utility-scale system costs by Q4 2026. Non-DCR modules have been broadly stable or softening, because global manufacturing capacity (1,100+ GW) far exceeds 2026 installation demand (~650 GW).
What exactly is the ALMM-II premium?+
Roughly ₹8–10/Wp over comparable non-DCR modules — about ₹80–100 lakh on a 10 MW project. It exists because ALMM-II requires domestically manufactured cells, and India's certified cell capacity is small relative to module demand.
Does ALMM-II apply to my project?+
It is mandatory from 1 June 2026 for all government-funded projects — SECI, NTPC, state DISCOM, PM-KUSUM and PM Surya Ghar. Net metering and open access projects are exempt until 31 December 2026. Private C&I, captive and open access projects can still use non-DCR modules, which are materially cheaper.
I bid this project before June 2026. What are my options now?+
Four levers, in order of impact: place forward orders to avoid Q3–Q4 spot premiums; check whether any part of your portfolio qualifies as non-DCR; review the BOQ for BoS cost offsets (₹10–20L is commonly recoverable); and use procurement credit to buy into price dips rather than at peaks. For anything not yet contracted, add an escalation clause.
Is an ALMM-I certificate enough for a government project?+
No. ALMM-I and ALMM-II are separate lists. ALMM-I covers finished modules; ALMM-II additionally requires domestically manufactured cells. For government projects after June 2026, ALMM-I alone is not sufficient — verify List-II certification specifically.
When will module prices come back down?+
Partial relief is expected from Q4 2026 as Waaree, Premier Energies and Adani Solar cell expansions enter production, with meaningful stabilisation in Q1–Q2 2027. Wood Mackenzie expects full stabilisation only by 2029, when around 130 GW of additional cell capacity is slated to be operational.
Should I buy modules on the spot market right now?+
Aug–Sep 2026 is the worst window — post-rush inventory depletion, full ALMM-II enforcement, and no new cell capacity yet. Spot prices carry the highest premiums. Forward orders with framework suppliers are significantly cheaper for anything above small volumes.
- Wood Mackenzie, August 2026 — forecast of 20% rise in utility-scale solar system costs by Q4 2026 and price stabilisation by 2029; commentary from Sureet Singh, Research Analyst.
- MNRE ALMM List-II — mandatory from 1 June 2026 for government-supported projects; exemption to 31 December 2026 for net metering and open access; completion-waiver application deadline of 23 July 2026.
- India solar installation data — 34 GWdc added in H1 2026, approximately 38% above H1 2025.
- Customs duty structure on imported solar cells — 20% Basic Customs Duty plus 7.5% AIDC.
- DGTR recommendation, September 2025 — anti-dumping duties of up to 30% on Chinese-origin solar products; final notification pending.
- ISTS transmission charge waiver schedule — reduced from 75% to 50% for projects commissioned from July 2026, full phase-out by July 2028.
- Global module manufacturing capacity (1,100+ GW) versus 2026 installation demand (~650 GW); ex-factory module prices of USD 0.085–0.15/Wp.
Source ALMM-II Compliant Modules at Competitive Prices
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Published 7 August 2026 · Headsup B2B Editorial Team · Procurement Intelligence
