Hardening of imported solar PV module price to moderate project returns: Icra

Hardening of imported photovoltaic solar module price will moderate the returns for projects awarded over the last six to nine-month period, rating agency Icra said on Tuesday. The increase in imported photovoltaic (PV) solar module price level by about 15-20 per cent over the last 4-5 months, to around 22-23 cents/watt as of date, is likely to impact the returns of solar power project developers, Icra said in a statement.

This price rise has been mainly driven by a sharp increase in the price of polysilicon, a key input for cell and module manufacturers, it added. Given the import dependency for PV modules for a majority of the solar power installations in India, such hardening in the price of PV modules, if sustained, remains a near-term headwind, the agency noted.

This risk is especially significant for the capacity won by developers through the bidding route over the last six to nine months (amounting to 4-GW at tariffs ranging largely between Rs 2.00 per unit and 2.25 per unit and scheduled to be commissioned over the next 12-15-month period, it stated.

This apart, the recent surge in metal prices is also leading to upward pressure on the overall capital cost for solar power projects.