ALMM II may give investment opportunity, says Fujiyama Power Systems

Mandatory domestic sourcing of solar cells under ALMM II from June may create supply shortages, prompting fresh investments and capacity expansion by Indian manufacturers

The implementation of the Approved List of Models and Manufacturers II (ALMM II), for mandatory sourcing of domestic cells, beginning June this year, may open up a substantial investment opportunity for Fujiyama Power Systems. 

The company has already commissioned a 1 Gigawatt (Gw) solar cell manufacturing plant in Dadri, Uttar Pradesh, with ₹300 crore investment. The firm plans to invest more if a domestic content requirement (DCR) cell shortage occurs due to ALMM II. 

“If needed, future investments may go into 1 Gw to 2 Gw of solar cell capacity, depending on market conditions and policies like ALMM II. Because of the policy, there is a lot of expectation of DCR cell shortage,” Chairman and Joint Managing Director Pawan Kumar Garg told Business Standard in an interview. 

However, the company is currently exploring various options. “If we can get it at a reasonable rate, we will not invest. We are exploring various options in this area. Many manufacturers are installing solar cell manufacturing plants and we are speaking with them,” he said. 

Fujiyama’s current facility produces DCR solar cells to support rooftop solar demand. Apart from the rooftop solar business, the company also manufactures inverters, lead-acid batteries and lithium-ion batteries. The firm makes solar panels and cells for residential, commercial and industrial use. 

“When the scheme was launched, the subsidy was applicable only on DCR cells. Suddenly, the demand for DCR cells was very high, but the supply was low. We observed a direct business loss. Last year in May, we decided to start solar cell manufacturing and within six months, our 1 Gw cell production started,” Garg said. 

Fujiyama is among the companies that pushed for off-grid rooftop solar systems, owing to rising demand from Tier-II or Tier-III cities. “While subsidies attracted customers, many actually needed off-grid or battery-based systems due to power cuts. So, while subsidy-driven demand grew, non-subsidy demand also rose,” Garg said. 

The company plans to increasingly focus on lithium batteries, catering to the increased demand. “While 75 per cent of the company’s procurement is done domestically, with a deep backward integration in inverters and lead-acid batteries, cells for lithium batteries are imported. We plan to explore lithium cell manufacturing in two-three years,” he said. 

For its inverters, 80-85 per cent of the components are domestically sourced, and active components are imported. All the components in inverters are manufactured in-house, and mounting and testing are done in-house. Lead-acid batteries are 100 per cent domestic, he said. 

For wafers and ingots, upstream components required for manufacturing solar cells, the company will prefer domestic sourcing if available, else, imports will continue as long as viable. 

Fujiyama’s current manufacturing capacity is about 1.5 Gw across all three components. It is establishing a manufacturing facility in Ratlam, Madhya Pradesh, which is expected to be operational by April-May this year, to double its current capacity. 

The BSE-listed company had reported a total revenue of ₹588 crore in the December 2025 quarter, a 4 per cent increase over ₹567 crore reported in the previous quarter.