Solar panel prices up a quarter in 2 months

"There is a pent-up demand for solar panels government should immediately assess the international supply chain scenario and defer the plan to introduce BCD," Das said.

Prices of the imported solar panels have shot up 23% in the last two months since China’s power shortage crippled the delivery schedule from manufacturing plants. The price of solar panels is being quoted at over 28 to 32 cents per watt peak, compared to 26 cents before the crisis.

The price increase is “adversely affecting” the commercial viability of projects where panels are yet to be procured, said EPC players importing panels for developers.

Gautam Das, CEO of Oorjan Cleantech said, “Solar panel prices have shot up by Rs 2 to 3 per watt peak over last one month alone. The sudden increase in prices will impact the commercials of the power purchase agreement (PPA) by more than 20 paise per unit and the projects under execution may be financially unviable for the investors and/or consumers.”

There is a perception among the global community that the power shortage due to coal supply issues in China will continue till March 2022. On the other hand, India plans to introduce 40% basic customs duty (BCD) from April 1, 2022, on imported solar panels. Together the two issues will compound the problems further for developers whose projects were already delayed by Covid-19.

“There is a pent-up demand for solar panels government should immediately assess the international supply chain scenario and defer the plan to introduce BCD,” Das said.

On October 13 the Board members of the European Union Chamber of Commerce in China said that electricity shortages had worsened in some cities, and eased in others. They predicted electricity problems would last until March 2022. Until enough power comes online, China’s factories risk unexpected and destabilising stoppages.

Puneet Goyal, co-founder SunAlpha Energy said, Chinese module manufacturers have stopped giving any commitment to the production or pricing of modules. When forced (since we have to quote the price to our clients) suppliers quote absurdly high prices between 28-32 cents per watt peak compared to 26 cents in July-August.

“This will impact upcoming contracts for the entire solar sector, where developers are not able to take purchase decisions,” said Goyal. “Going ahead we expect freights to fall significantly from the highs of $8000 to $9000 per 40 feet equivalent containers,” he added.