Loading...

Module price spike delays installations


31 January 2021 | BRIDGE TO INDIA

Module price spike delays installations

Prices of solar modules, on a downward trajectory following the COVID-19 pandemic, have moved up sharply in the last few months. Mono-PERC module prices had fallen to a low of USD 0.18/ W in July 2020 but have since increased by more than 16% to USD 0.21-0.22/ W. Initially, prices rose due to a spate of supply side disruptions caused by explosions and flooding at various polysilicon factories in China. Subsequent surge in local demand towards the end of the year contributed not only to prices staying up but also shortfall in availability for the Indian market.

  • Solar module market is undergoing a massive technological and supply side shift;
  • Soaring global demand in 2021 means that outlook for module prices is unclear;
  • The increase in prices has come at an inopportune time for the Indian solar sector with expected 2021 imports at an all-time high of 14 GW;

Solar module market is witnessing a frantic pace of technology and structural changes. Higher efficiency mono-PERC modules have almost entirely replaced multi-crystalline modules. Simultaneously, there is a push towards larger wafers and bigger modules, which has caused equipment shortages. Tier 2 and 3 suppliers in China, unable to invest in new technologies, have been squeezed out and leading suppliers are gaining market share at their cost.

Figure: Solar module prices in 2020, USD cents/ W

Source: BRIDGE TO INDIA research

Most supply side issues are expected to ease over the next two quarters. But on the other hand, global demand is expected to reach 145-150 GW this year, about 20% higher than in 2020, with sharp bounce back in demand across the US, Europe and China. Market consolidation in China and increasing global demand mean that outlook for module prices remains unclear.

Indian project developers, typically hard negotiators on prices, are facing a host of challenges including prices being renegotiated upwards by the suppliers and delayed shipments. Even freight rates have shot up 5-8 times due to container shortages. Fortunately for them, exchange rate has been moving in other direction with USD-INR easing by 6% to 72.90 from the annual high of 77.38 in May 2020.

Indian module import data shows volumes gradually picking up. But H2/2020 imports at 3.2 GW are still much lower than expected. 2021 should be a huge year for Indian solar sector with total expected installations of 13.5 GW (AC), equivalent to module demand of at least 18 GW. Setting aside about 4 GW supply from domestic manufacturers, total imports for the year are expected at 14 GW. The increase in prices has come at a distinctly inopportune time for the sector.


Recent reports

India Solar Map | December 2023

India Solar Map | December 2023

India Solar Map 2023 is an info-graphic report covering growth of utility scale solar sector – national and state-wise commissioned and pipeline capacity, leading market players and portfolio details of top 16 project developers. Capacity addition in 2023 fell 51% YOY to 5,924 MW taking total utility scale solar capacity to 59,840 MW. Total project pipeline stands at a record 74,161 MW.

India Corporate Renewable Brief | Q4 2023

India Corporate Renewable Brief | Q4 2023

This report provides an update on key trends and developments in the corporate renewable market including capacity addition, key players, policy & regulatory issuance, financing, PPA tariffs and other market trends.

India PV Module Intelligence Brief | Q4 2023

India PV Module Intelligence Brief | Q4 2023

This report captures quarterly trends in module demand and supply, import and domestic production volumes, supplier market shares, break-up by technology and rating, global market scenario, pricing trends across the value chain, key policy developments and market outlook.

India Solar Compass | Q4 2023

India Solar Compass | Q4 2023

This report provides a detailed update of all key sector developments and trends in the quarter – capacity addition, leading players, tenders and policy announcements, equipment prices, financial deals and other market developments. It also provides market outlook for the next two quarters.

Inter-state OA — opportunities and challenges

Inter-state OA — opportunities and challenges

Inter-state transmission system (ISTS) open access (OA) renewable market is growing strongly on the back of multiple drivers including a waiver from ISTS charges together with decarbonisation pressure on corporates and streamlined transmission connectivity approval process. However, the ISTS route savings are viable only for projects commissioned by June 2026 (at least 75% ISTS charge waiver).

India Corporate Renewable Brief | Q3 2023

India Corporate Renewable Brief | Q3 2023

This report provides an update on key trends and developments in the corporate renewable market including capacity addition, key players, policy & regulatory issuance, financing, PPA tariffs and other market trends.

To top