Hiked Prices in Solar Panels by Chinese Cos Hit Projects

solar panel installtion

Prices of Chinese solar modules have risen by over a fifth since December, which has become a concern for Indian solar developers. The hike was reiterated by Indian solar power developers, who highlight that the raised prices may impact a capacity of around 10 gigawatts (GW) under development. The developers underscored that the Chinese companies are also reneging on contracts to supply the equipment at the agreed price, even at the risk of their bank guarantees getting encashed.

One of the solar power developers also highlighted that the prices for contracts signed have raised to a price of almost 23 cents per kilowatt-hour (kWh) from 19 cents per kWh since last December. The spike is expected to affect those projects that were signed for power purchase agreements (PPAs), impacting the internal rate of return (IRR) from projects.

Moreover, a failure to meet deadlines will result in penalties for developers with India having strict project commissioning deadlines. India imported to the tune of $2.16 billion worth of solar photovoltaic (PV) cells, modules, and panels in 2018-19. Major Chinese solar module manufacturers include ET Solar (headquarters: Nanjing), Chint Solar (headquarters: Hangzhou), Trina Solar Ltd (headquarters: Changzhou), Jinko Solar (headquarters: Shanghai), and GCL-Poly Energy Holdings Ltd.

In this context, the head of a large clean energy firm cited that several developers had bid aggressively keeping low prices in mind. Plus, the Chinese manufacturers were citing reasons for the spike including high prices of material costs, which was also for cases in contracted projects.

In the meantime, queries emailed to the spokesperson of India’s ministry and new and renewable energy went unanswered (till press time). Furthermore, email queries sent to the Chinese solar module manufacturers, including ET Solar, Jinko Solar, Trina Solar Ltd, Chint Solar and GCL-Poly Energy Holdings Ltd. recently also went unanswered.

The raised prices in solar module prices are attributed to India’s decision to levy 40% basic customs duty on solar modules and added 25% on solar cells from 1 April 2022. The move is expected to make imports costlier and encourage local manufacturing.

India’s ministry of new and renewable energy has issued an order administering a list of approved module manufacturers and solar PV models for government-supported schemes, which includes projects from where distribution companies can procure electricity for supply to their patrons.

Sanjeev Aggarwal, managing director of Petroliam Nasional Bhd- owned Amplus Energy Solutions Pvt. Ltd. stated that they had observed an upward movement in the last two quarters, in solar panel prices from China. He added that the global supply chain disruption that started with the pandemic has aggravated with winter weather, container shortages, plastic price increase, factory fires, and logistics woes.