Solar module prices in India ‘likely to remain subdued in the near term’

From pv magazine India

For PV developers in India, what’s the landed cost of modules imported from China, Vietnam and Hong Kong after accounting for all duties, logistics costs, and fall in prices? Are these still cheaper than modules assembled in India? How has the continuous fall in module prices globally affected the pricing by Indian manufacturers?

The prices of the imported mono PERC modules (before duty and logistics) witnessed a significant decline over the past 15 months, declining to an all-time low of 12-13 cents/watt in December 2023 from the high of 27-28 cents/watt seen in Q4 FY2022 and lower than the 23-24 cents/watt seen in December 2022. Also, cell prices have declined to 5-6 cents/watt in December 2023 from the peak of 16-17 cents/watt in December 2022.

Based on the prevailing cell and module prices, the landed cost of imported modules is expected to be about 19-20 cents/watt, while the cost of modules sourced from domestic OEMs using imported cells is expected to be higher at 22-23 cents/watt.

With ALMM relaxation till March 31, 2024 and a drop in module prices, module imports are increasing. How can Indian manufacturers stay competitive?

The imports of solar cells and modules increased by 155% to INR 22,992 crore ($2.8 million) in 7M FY2024 from INR 9,020 crore in 7M FY2023, in view of the abeyance of the ALMM order and a sharp decline in solar PV cell and module prices. While the domestic OEMs are expected to be protected against imports through the ALMM post March 31, 2024 (assuming that the abeyance is not extended), the pricing would remain exposed to global wafer and cell prices given the dependence on imports for key inputs. The Indian solar OEMs can improve their competitiveness through backward integration and increasing the scale of operations.

Do you expect the fall in module prices to persist in 2024?

Given the dominance of Chinese OEMs across the solar PV manufacturing value chain, the pricing would remain sensitive to the supply coming from China along with their capacity expansion plans. In the near term, the prices are likely to remain subdued.

Do you think the module oversupply in the global market may hit the expansion plans of Indian manufacturers?

The plans by the Indian manufacturers would remain linked with the protection available against the cheaper imports, i.e., ALMM and BCD regime. If the ALMM order were to be restored post March 2024, the domestic manufacturers are likely to continue with their expansion plans. However, the manufacturers should focus on backward integration, technology adoption and scaling up their capacities to compete with the global manufacturers.

Given that the manufacturing capacity in India is likely to exceed the domestic demand if all the capacity expansion plans, including under the PLI scheme, were to fructify, the ability of the Indian solar OEMs to remain competitive with the global peers would be important to achieve a respective share in the export markets.