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According to a report by ICRA on renewable energy, the solar energy tariff is expected to increase by 20 to 25 paise per unit in future tenders for projects compared to the tariffs observed in the last six months.
This is growing in importance given India’s ambitious goal of reaching 450 GW of renewable energy by 2030.
” Rising prices for (solar) modules and the recent increase in the GST (Goods and Services Tax) rate for solar power equipment are likely to increase the tariffs for upcoming solar offers by 20 to 25 paise per unit compared to levels observed over the past six months, ” the report said.
Nonetheless, he said rates should remain competitive at less than Rs 3 per unit.
The increase in cell and module prices is likely to moderate debt coverage and performance measures for projects tendered over the past year and with commissioning expected in the next 6 to 12 months, did he declare.
In addition, developers are likely to face execution delays due to supply chain constraints resulting from disruptions in China, he added.
The availability of an adequate timeline under the PPA (power purchase contract) or obtaining an extension of the deadline from the submitting agency remains important, said Icra.
The price of Mono PERC PV modules imported to India has increased by more than 35%, from 19 to 20 cents / watt in December 2020 to 22 to 23 cents per watt in June 2021 and to 27-28 cents per watt in October 2021 .
This is mainly due to an increase in the prices of polysilicon, a key input for photovoltaic modules as well as recent supply disruptions in China, he said.
The disruption of manufacturing operations throughout the solar PV module value chain in China due to ongoing power outages is driving high price levels for solar PV cells and modules. Given the likely continuation of these power cuts as part of China’s emissions control targets, prices are expected to remain high in the near term, he also said.
Besides polysilicon, cost pressures for solar power projects arise from the sharp increase in the prices of steel and aluminum which are respectively used in the mounting structures and backsheets of solar photovoltaic modules, a he declared.
(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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