Average construction cost of large-scale solar projects increased 23% year-on-year in third quarter 2021


The average cost of large-scale solar projects in the third quarter of 2021 (Q3 2021) was around 42.4 million yen (~ $ 559,828) / MW, according to the recent India solar market update for the third quarter of 2021. from Mercom.

The cost increased by 23% compared to the same period last year when it was 34.5 million (~ $ 455,322) / MW and an increase of 10% compared to the previous quarter (Q2 2021) where the cost was approximately 38.6 million (~ $ 509,433) / MW.

The increase in the costs of large-scale systems in the third quarter of 2021 is mainly due to an increase in the cost of transporting solar components. Transportation costs, which have followed an upward trajectory since the Covid-19 outbreak, have negatively impacted the importation of solar modules into India. Another problem is the shortage of containers, creating problems with importing raw materials from China.

Upward trends in the prices of raw materials, including steel, aluminum and copper, have also contributed to the rising costs of large-scale systems. The cost of the aluminum profile increased 30-40% during the quarter. The prices of silicon and EVA wafers have also increased by 40-50%.

India added 2,835 MW of solar capacity in the third quarter of 2021, an increase of 14% from 2,488 MW installed in the second quarter of 2021. The numbers marked a massive increase of 547% year-on-year.

According to the report, in 9M 2021, India added more than 7.4 GW of solar capacity, which was 335% higher than 1.73 GW in 9M 2020. The cumulative installed capacity at the end of Q3 2021 amounted to 46.6 GW.

The average selling prices of solar modules continued to increase. Module prices surged, along with raw material prices after major manufacturers started cutting production in line with China’s electricity constraints.

According to the report, the prices of polycrystalline modules from China increased by 4%, and those of Chinese mono PERC ASP modules increased by 17% QoQ. Prices for Chinese modules have increased for six consecutive quarters, a trend not seen in the past decade.

A wave of cases of delayed solar project development linked to price overvaluation has led investors to cut spending, while lingering supply chain problems have hampered businesses.

Solar module manufacturers estimate that Chinese module prices are expected to remain high until the first quarter of 2022.

For the full report, please visit: https://mercomindia.com/product/q3-2021-india-solar-market-update


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