ALMM List-II: EPC Contract and Supply Risk Guide

This Is a Contract Problem Now, Not Just a Compliance Problem

Most ALMM List-II content, including our own DCR compliance guide, answers "am I covered by the mandate." That's necessary but no longer sufficient. The list itself is not stable enough to write a fixed-price, fixed-scope contract against and assume it will still be accurate at commissioning.

Consider the timeline: the mandate took effect June 1, 2026. A blanket exemption for net-metering and open-access projects was extended to December 31, 2026 by a memo dated July 18. The list itself received its 8th revision on July 22, the day before this update. An EPC contract signed in March, before any of these changes, that named a specific supplier and assumed the May 25 narrow-relief regime would now be operating on outdated assumptions on three separate fronts at once, none of which required the EPC to do anything wrong.

That's the actual risk. Not "will my project be non-compliant," but "who absorbs the cost when the rules move between signing and commissioning."

Where the Risk Actually Sits

Procurement risk. A BOM naming a specific manufacturer and cell model at contract signing can become non-compliant before delivery if that model drops off a subsequent revision. A brand can remain listed while a specific model doesn't; genericized "ALMM-approved supplier" language in a contract doesn't protect against this.

Eligibility risk. If a subsidy claim, net-metering application, or case-specific relief request is rejected, and it can be, approval under the Category I/II relief process is explicitly not guaranteed, someone bears the cost of remediation. Most EPC contracts don't currently specify who.

Schedule risk. DISCOM-side delays to commissioning are common and, as MNRE itself has acknowledged, can push a project past a compliance cutoff for reasons entirely outside the EPC's control. Without a clause addressing this, the EPC can end up contractually exposed for a DISCOM's timeline.

Price risk. Domestic cell capacity remains a fraction of module demand, and pricing has moved as a result. A fixed-price contract signed before a supply shift, in either direction, transfers that volatility entirely onto whichever party absorbed the fixed price.

Contract Clauses EPCs Need

1. Model-level supplier specification, not brand-level. Name the exact cell model and current ALMM List-II revision number at signing, not just the manufacturer. Require the supplier to notify the EPC in writing within a defined window (5-7 days is reasonable) of any change to that model's listing status.

2. An ALMM-specific change clause, separate from generic change-in-law language. Given the list has moved eight times in a year, a standard annual change-in-law review clause is far too slow. Build a clause that specifically triggers on any ALMM List-I or List-II revision, MNRE Office Memorandum, or exemption-scope change affecting the named equipment or project category, with a defined response window for both parties.

3. A substitution and cost-allocation mechanism. If a named model or manufacturer is delisted between order and delivery, define in advance: who selects the replacement, who bears any price delta, and what happens to the project schedule. Leaving this to be negotiated after a delisting event, under time pressure, favors whichever party has more leverage at that moment, not necessarily the one who should bear the cost.

4. Explicit eligibility-risk allocation with the client. State plainly whether the EPC or the client bears the cost if a relief, exemption, or subsidy application is rejected despite good-faith, complete documentation. This is not the same as EPC negligence, a rejected application under a discretionary, project-by-project review process is a real possibility even with a clean submission, and the contract should say so rather than leave it to be argued after the fact.

5. A two-way price adjustment mechanism tied to List-II supply conditions. Given the current gap between domestic cell capacity and module demand, and the fact that new capacity, including PLI-linked manufacturing, is actively coming online, module and cell pricing can move in either direction over a project's timeline. A price adjustment clause referencing a defined index or supplier quote at defined intervals protects both sides, not just the EPC.

6. Defined documentation and audit-support obligations. Specify which party retains DCR certificates, supplier declarations, invoices, e-way bills, and installation records, and for how long. If a compliance question arises during or after commissioning, the party responsible for producing evidence should be established in the contract, not discovered during a dispute.

Before Naming a Supplier: A Pre-Contract Checklist

• Confirm the specific cell model, not just the manufacturer, appears on the current ALMM List-II revision.
• Ask the supplier directly whether they anticipate any capacity or specification changes to that model in upcoming revisions, get this in writing even if the answer is "no known changes."
• Confirm the supplier's process and typical turnaround for generating the 16-digit DCR certificate per batch, before you need it, not during a subsidy filing deadline.
• Check whether the supplier's List-I module status depends on a List-II cell relationship that could itself change; a manufacturer's module can be delisted if its cell supply falls out of compliance.

Revisiting Contracts When the Rules Loosen, Not Just When They Tighten

Most EPC attention goes to defending against new restrictions. The July 18 blanket exemption extension for net-metering and open-access projects is a reminder that rules move in both directions. A contract signed under the narrower May 25 relief framework, before that extension, may now qualify a client for exemption they weren't counting on at signing. Proactively flagging this to affected clients is both the right call and a genuine relationship-builder, an EPC that surfaces a rule change in the client's favor without being asked is doing something most competitors aren't.

Action Checklist

• Audit live contracts signed before July 18, 2026 for net-metering or open-access projects that may now qualify for the extended exemption.
• Add model-level, not brand-level, equipment specification to all new BOM references in contracts.
• Insert an ALMM-specific change clause distinct from generic change-in-law language, given the revision frequency.
• Define substitution cost allocation before signing, not after a delisting event.
• Specify eligibility-risk allocation with clients explicitly, including the possibility of a good-faith relief application being rejected.
• Set documentation retention responsibility per party, in writing, at signing.

Frequently Asked Questions

Q1. How often does ALMM List-II actually change, and why does that matter for contracts?

List-II has been revised eight times since its first publication in July 2025, most recently July 22, 2026. A generic annual change-in-law clause responds far too slowly to this pace. Contracts referencing ALMM-compliant equipment need a change clause triggered by list revisions specifically, not a standard periodic review.

Q2. If a supplier's cell model is delisted after a contract is signed but before delivery, who is responsible?

This should be defined in the contract itself, not resolved case by case. Without a substitution and cost-allocation clause agreed at signing, this becomes a negotiation under time pressure, generally unfavorable to whichever party has less leverage in that moment.

Q3. Can an EPC be held responsible if a client's subsidy or exemption application is rejected despite complete documentation?

This depends entirely on what the contract says. Case-specific relief and exemption processes are explicitly discretionary; MNRE does not guarantee approval even for complete, well-documented applications. Contracts should state in advance whether the EPC or client bears this risk, rather than leaving it to be argued after a rejection.

Q4. Should EPCs proactively revisit contracts when exemption rules loosen?

It's not usually a legal obligation, but it is worth doing. The July 18, 2026 extension of the net-metering and open-access exemption to December 31, 2026 may benefit clients under contracts signed before that date. Flagging this proactively is good practice and a genuine differentiator with clients.

Q5. Does naming a manufacturer by brand alone protect an EPC contractually?

No. A manufacturer can be listed on ALMM List-II for some cell models and not others, and a brand's overall listing status doesn't guarantee a specific model remains compliant. Contracts should specify the exact model and current list revision at signing.

Sources

• MNRE, ALMM Order primary page (mnre.gov.in) – confirms List-I/List-II structure, revision history, and current status.
• EQ Magazine, "8th Revision of ALMM List-II for Solar PV Cells – dated 22.07.2026" – confirms most recent revision date and supply-chain risk framing for procurement strategy.
• PV-Tech, "MNRE extends ALMM List-II exemption for net-metering and open-access solar projects" – confirms the July 18, 2026 blanket exemption extension to December 31, 2026.
• SolarSure, "ALMM List-II: Impact on Solar Project Timelines & Compliance" – supports practical procurement risk points, including List-I(a) migration and documentation retention advice.
• Reslink Energy, "Non-DCR Solar Panels After June 2026: The Real Rules" – for the underlying compliance mechanics this piece assumes as background.