Rising solar cell and module costs pressure developers
POWER & RENEWABLE ENERGY

Rising solar cell and module costs pressure developers

The cost of solar photovoltaic (PV) modules has risen by more than 40% in the last 18 months to $27-28 cents per watt, owing to an increase in polysilicon pricing. This is primarily driven by disruptions in operations across the value chain of solar module manufacturing in China and a jump in the cost of polysilicon, a critical material for module producers. The surging cell and module prices have been contributing to the cost constraints that solar power manufacturers are encountering, even as supply chain concerns continue to alleviate.

While bid rates have climbed from Rs 1.99 per unit in December 2020 to Rs 2.2-2.5 per unit, the extent of the increase has remained lower than what has been projected is necessary to counteract the increase in module prices. The risk of moderation in returns is substantial for projects totalling 4.4 GW awarded in the last 18 months with rates less than Rs. 2.2 per unit.

The cost of solar photovoltaic (PV) modules has risen by more than 40% in the last 18 months to $27-28 cents per watt, owing to an increase in polysilicon pricing. This is primarily driven by disruptions in operations across the value chain of solar module manufacturing in China and a jump in the cost of polysilicon, a critical material for module producers. The surging cell and module prices have been contributing to the cost constraints that solar power manufacturers are encountering, even as supply chain concerns continue to alleviate. While bid rates have climbed from Rs 1.99 per unit in December 2020 to Rs 2.2-2.5 per unit, the extent of the increase has remained lower than what has been projected is necessary to counteract the increase in module prices. The risk of moderation in returns is substantial for projects totalling 4.4 GW awarded in the last 18 months with rates less than Rs. 2.2 per unit.

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