Increased PV module, mobile costs pose value pressures for solar energy builders: ICRA

NEW DELHI : The increased sun photovoltaic mobile and module costs are contributing to the fee constraints going through the solar energy builders, at the same time as the availability chain problems are starting to ease, mentioned a file by way of ICRA.

The price of sun PV modules (Mono PERC) has climbed-up by way of over 40% prior to now 18 months. This used to be basically pushed by way of the disruption in operations around the price chain of the sun PV module production in China and the spike in the price of polysilicon, a key enter for module manufacturers.

Girishkumar Kadam, Senior Vice President & Co-Staff Head – Company scores, ICRA, mentioned: “The rise in sun PV mobile & module costs together with the imposition of elementary customs responsibility (BCD) on imported cells & modules is main to price force for solar energy tasks awarded over the past 12-18 months.“

 “Whilst the bid price lists have higher from the lows of Rs. 1.99 in step with unit in Dec’20 to Rs. 2.2-2.5 in step with unit, the level of the rise in bid price lists remained less than what ICRA estimates is important to mitigate the rise in module costs. The danger of moderation in returns is important for tasks aggregating to 4.4 GW awarded over the last 18 months, in which the price lists are underneath Rs. 2.2 in step with unit,” Kadam mentioned.

As modules are required to be sourced from home OEMs below the ALMM notification for tasks awarded post-April 2021 and as majority of the home OEMs should not have backward integration past cells, the dependence on wafer/mobile imports is prone to proceed over the medium time period. 

Consequently, the pricing pattern for polysilicon and wafers/cells across the world would stay a key monitorable for solar energy builders in India. Taking into account procurement of modules from home producers as required below ALMM notification and use of imported cells by way of such producers, an building up of one cent in mobile costs will require a 5-6 paise in step with unit building up in bid price lists as a way to care for the similar stage of returns, it mentioned.

Vikram V, Vice President & Sector Head – Company scores, ICRA, mentioned, “Given the mounted and unmarried phase tariff below the PPAs for solar energy tasks, the uptrend in rates of interest stays a problem for the builders and would put upward force at the bid price lists. An building up of 150 bps within the rate of interest state of affairs is estimated to result in an building up of upto 20-paise building up within the bid tariff, assuming the opposite elements stay the similar.“

 “Nevertheless, in spite of the fee headwinds, the tariff charges for solar energy tasks are prone to stay extremely aggressive from the point of view of the state distribution utilities relating to the marginal value of procurement from thermal stations which can be on the backside 25% of the benefit order dispatch, in which the variable value of procurement is greater than Rs. 3.0 in step with unit throughout key states.”

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