Falling Chinese PV prices good news for aggressive bidders in India

Indian solar developer could benefit from a projected decline in the prices of Chinese-made solar panels, which are due to weakened demand in China and Japan and prolonged trade restrictions in the EU and the USA.

Tier-1 module prices are expected to go down to INR 27.50 (USD 0.41/EUR 0.37) per Wp for shipments in the first quarter (Q1) of 2017, consultancy Bridge to India said Monday. This will allow project developers in India to improve returns despite aggressive bidding in recent tenders.

Companies have offered to sell solar power at as low as INR 4.34/kWh in Indian tenders this year. Whether developers that bid below INR 5/kWh would find the needed funds has become a common question in the sector.

Bridge to India said the price decline forecasts for Chinese photovoltaic (PV) equipment come “at a perfect time” for the Indian solar market. It is expected that Q1 2017 would be the biggest quarter in terms of installations so far. The consultancy expects about 2 GW to be added.

The depreciation of the Chinese Yuan against the Rupee means that imported equipment becomes even cheaper.

“Unless there is a change in Chinese demand sentiment or EU removes its trade barriers against Chinese suppliers, we expect prices to stay soft for the next few quarters,” said Bridge to India.

(INR 100 = USD 1.489/EUR 1.345)

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