InvestorQ : Is it true that the cost of solar energy generation in India could get impacted?
Aashna Tripathi made post

Is it true that the cost of solar energy generation in India could get impacted?

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Aditi Sharma answered.
7 months ago
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There is a cost push that Indian solar companies are facing and that is largely due to hike in costs by the Chinese manufacturers. Chinese solar module manufacturers have increased prices by over 20% in the last 4 months. Considering the dominating position that China holds in this space, this moves is likely to impact a capacity of around 10 GW which is still under development. China has refused to abide by their old price contracts.

While Indian companies had signed with China solar module manufacturers at a price of 19 cents per KWH, China has gone ahead and unilaterally raised the price to 23 cents per KWH. The problem for Indian power companies is that this price hike will impact the IRR of the project, based on which the power purchase agreements or PPAs have already been signed. India imported $2.16 billion of solar photovoltaic cells, panels and modules in FY-19.

Chinese manufacturers of these solar cells and panels have quoted a spike in the cost of materials as the reason for this spike, but it does look like China is trying to get monopoly rents out of the unique position that it enjoys today with a domineering capacity. This would add to the customs duty hike on solar modules and solar cells that is effective from April 2022. China has blamed input costs, supply chain disruptions and container shortages.

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