Rising Chinese solar module prices may put solar power projects at risk

New Delhi: Rising prices of Chinese solar modules may arrest the sharp decline in Indian solar power tariffs and also put at risk projects that won licences betting on a continued decline in module prices.

Several developers and analysts Mint spoke to said that the record low tariff of Rs2.44 per per kilowatt hour (kWh) at the auction of 500 megawatts (MW) of capacity at the Bhadla solar park in Rajasthan in May was quoted assuming module prices will fall to around 23 cents per watt.

With the module prices currently around 32 cents and the August delivery quoted at around 34 cents, developers are wary about the future tariff trajectory.

Modules account for nearly 60% of a solar power project’s total cost and their prices fell by about 26% in 2016 alone.

Module prices have, however, firmed up with China extending the feed-in tariff regime, which ensures a fixed price for power producers, for the third quarter and US developers placing advance orders to shore up cell and module supplies amid demands for a cap in prices of cheap imports to the US.

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