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Chinese solar module makers have raised prices by over a fifth since December, two executives at Indian solar power developers said. This may impact a capacity of around 10 gigawatts (GW) under development. The Chinese companies are also reneging on contracts to supply the equipment on the price as agreed, even at the risk of their bank guarantees getting encashed, these developers said.

Prices for contracts signed at 19 cents per kilowatt-hour (kWh) have been raised, with a price of 23 cents per kWh been quoted since December, one of the two people cited above said. Any price hike will impact the internal rate of return (IRR) from projects which have already signed power purchase agreements (PPAs).

With India having strict project commissioning deadlines, a failure to meet them will result in penalties for developers. India imported $2.16 billion worth of solar photovoltaic (PV) cells, panels, and modules in 2018-19. Major Chinese solar module manufacturers include Trina Solar Ltd, Jinko Solar, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd.

“Several developers have bid aggressively keeping low prices in mind. What happens to that capacity now? The Chinese manufacturers are citing high prices of material costs as the reason for this spike, even in contracted projects," said the head of a large clean energy firm, one of the people cited above the person cited earlier requesting anonymity.

Queries emailed to the spokesperson of India’ ministry and new and renewable energy remained unanswered till press time.

Emailed queries sent to Trina Solar Ltd, Jinko Solar, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd. on Monday night also went unanswered.

The spike in solar module prices comes in the backdrop of India’s decision to impose 40% basic customs duty on solar modules and 25% on solar cells from 1 April 2022, a move that would make imports costlier and encourage local manufacturing.

India’s ministry of new and renewable energy has issued an order enforcing a list of approved solar PV models and module manufacturers for government-supported schemes, including projects from where distribution companies procure electricity for supply to their consumers.

“We are seeing an upward movement in solar panel prices from China in the last two quarters. The global supply chain disruption that started with the pandemic has exacerbated with container shortages, winter weather, factory fires, plastic price increase and logistics woes," said Sanjeev Aggarwal, founder and managing director of Petroliam Nasional Bhd-owned Amplus Energy Solutions Pvt. Ltd.

ABOUT THE AUTHOR

Utpal Bhaskar

"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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