The average cost of large-scale solar projects increased by 19% year-over-year

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The average cost of utility-scale solar projects in the first quarter (Q1) of calendar year (CY) 2022 was around ₹43.5 million (~$560,512)/MW, according to the Solar Market Update India Q1 2022 recently published by Mercom.

The average cost increased by 19% compared to the same period last year when it was ₹36.6 million (~$471,603)/MW and an increase of 1.4% compared to the previous quarter when the cost was around ₹42.9 million (~$552,899)/MW.

India installed 2.7 GW of utility-scale solar in the first quarter of 2021, a quarter-over-quarter (QT) increase of 23% from the 2.2 GW installed in the previous quarter and a 53% year-on-year increase from 1.75 GW installed in the same period last year. Utility-scale solar accounted for 85% of installations and rooftops for 15% during the reporting period.

Project costs ranged between ₹40.6 million (~$523,256)/MW and ₹45.9 million (~$591,563)/MW, depending on the modules used.

According to the report, the average selling price (ASP) of polycrystalline modules from China has increased by 25% compared to last year. Similarly, the ASP of Chinese mono PERC modules increased by 20% compared to Q1 2021.

The ASP of Indian polycrystalline modules increased by 26% compared to last year, and the ASP of Indian mono PERC module also increased by 20% compared to the first quarter of 2021.

With the entry into force of the Basic Customs Duty (BCD) from April 1, 2022, many developers stockpiled 10 GW of modules in the first quarter alone. This should keep project costs relatively stable until these modules are used.

However, the industry expects the overall cost of the project to rise significantly as Indian module makers mostly rely on Chinese cells for their modules.

Another measure likely to increase the cost of solar projects is the Trade Remedies Branch’s (DGTR) recommendation to extend the anti-dumping duty on imported textured tempered glass (solar glass) from China for two years.

The DGTR also recommended imposing anti-dumping duties on imports of fluoride backsheets originating in or exported from China for five years. If the recommendations are accepted, the cost of modules that use imported solar glass and fluorine backsheet will increase, which will eventually add to the overall cost of the project.

Mercom’s India Solar Q1 2022 report is 116 pages long and covers all facets of the Indian solar market. For the full report visit: https://mercomindia.com/product/q1-2022-india-solar-market-update


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