The investors are worried about their returns because the tariff rates at which they will sell their power have already been fixed.

The increase in prices of solar panels and modules has become a major concern of worry for the developers who have already invested in the projects which are yet to be commissioned because around 85-90% of the solar panels and modules are imported from China.

The price of solar panels took a massive hike in mid-2020 because there was a supply disruption due to the floods that occurred in china’s southeast province which lead to the temporary closure of Tongwei Solar, a major polysilicon-producing company. Another major polysilicon-producing company GCL Poly was hit by an explosion.

The increased demand for the bifacial module is the major reason for the increase in price in the last quarter of 2020. The Bifacial Modules are the ones that produce solar power from both sides of the panel thus increasing its efficiency and utilization but they also require more glass in comparison with multi or mono modules. 

“Globally, the increased use of bifacial modules and the switch to larger panels caused a bottleneck in effective glass-processing capacity in the fourth quarter of 2020”. The freight rates took a shot up 5-8 times due to a shortage of shipping containers. The modules contribute about 45-55% of the project. In a highly competitive business environment, the power producers have very thin margins. 

The average landed price of modules imported into India increased to $0.20/W in December 2020 from $0.18/W in September. The CEO of Acme Solar, Rajat has declared that they have divided suppliers into three to four players in the module.

They are also working with small-sized suppliers. The company is also into diversifying its portfolio through the purchase of different kinds of modules like mono-facial, poly, etc. Rajat said he may start purchasing from May or June this year. Developers expect prices to stabilize again.

Solar tariffs reached a record-low of Rs 1.99 per unit last year. Developers typically procure modules four to six months ahead of commissioning a project, but the recent increases have delayed purchases.

Source:- Economic Times