Indian solar projects hit by higher module price - Bridge to India

Indian solar developers are faced with solar module price increases that could lead to the delay of up to 1 GW of projects, according to Bridge to India.

Developers in India usually factor in a 15%-20% annualised decline in module costs when bidding for projects, but prices have increased in the last two-three months, the consultancy explains. For the current quarter prices are being quoted at about USD 0.34 (EUR 0.28) per Wp, against Indian expectations of USD 0.28 per Wp, it said.

Strong installations in China, which has already added more photovoltaic (PV) capacity year-to-date than it was expected to add in the whole of 2017, along with reduced polysilicon supply in China, are seen as the main reasons for the price increases.

While Chinese installations are expected to slow in the remainder of 2017 after the addition of 34.9 GW in the first seven months of the year, including 24 GW in June and July alone, some expect that prices will remain high due demand from the US as the Trump administration ponders import tariffs.

In India, developers are delaying purchases in the hope that prices will start falling in the near future, Bridge to India says. There have also been reports that Chinese manufacturers are reneging on supply contracts and asking for higher prices. More than 3.8 GW of capacity is due to be commissioned in the second half of 2017, which is projects awarded at tariffs still viable at the current price levels. Bridge to India, however, expects that up to 1 GW could be delayed as developers wait for better prices or assured supplies.

The cost increases for the sector have been exacerbated by the goods and services tax (GST) rate of 5%.

In addition, Indian projects face the risk of anti-dumping duties and it is possible that the Indian authorities unveil a provisional duty as early as September.

(USD 1 = EUR 0.837)

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