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Indian solar cells cost more than Chinese imports, says CRISIL – pv magazine International

Pabio December 19, 2024

Solar cells made in India cost between 1.5 and two times more than Chinese imports, even after deducting customs duties, according to CRISIL Market Intelligence and Analytics. These higher prices could increase the investment costs of solar projects by up to INR 10 million ($117,580)/MW and increase tariffs.

December 19, 2024
Uma Gupta

From pv magazine India

The Indian government’s decision to extend the Lists of Approved Models and Manufacturers (ALMM) to solar cells from June 1, 2026 is spurring the rapid growth of solar cell manufacturing in India.

CRISIL Market Intelligence and Analytics said domestic PV manufacturing capacity will more than quadruple to 43 GW to 47 GW by June 2026, up from 10 GW in March 2024. Meanwhile, average annual demand is expected to reach 40 GW at 45 GW between exercises. 2027 and 2030.

“While the supply of solar cells is expected to be sufficient based on current market announcements, there could be a transient shortage until manufacturing ramps up,” says Sehul Bhatt, research director at CRISIL Market Intelligence and Analytics.

Timely commissioning of announced projects will be crucial to meeting demand, taking into account typical utilization rates and other uncertainties.

High prices for domestically manufactured cells could also influence tariff bids in solar power project auctions.

“Prices of Indian solar cells today are 1.5 to two times higher than those of Chinese solar cells, even after basic customs duties,” Bhatt said. “Such high prices may increase the investment cost of solar power projects from INR 5 million/MW to INR 10 million/MW and require one or more tariff increases. »

The ALMM cell mandate could pose a challenge for companies without domestic cell manufacturing capacity. Non-compliance could lead to module supply issues, potentially affecting their market share in the long term.

“Of the 62 GW of installed capacity as of December 2024 held by 79 entities, only 13 have an integrated cell manufacturing base. The rest will have to choose between increasing capacity or competing for domestic cell supply,” said Surbhi Kaushal, associate director of research at CRISIL Market Intelligence and Analytics. “Although 12 non-integrated players have announced plans to install 32 GW capacity by 2029, the relatively higher investment cost of cell manufacturing plants compared to module assembly lines and the lower pricing in the solar value chain could slow things down.”

CRISIL said there have been over 55 GW of capacity announced under the Production Linked Incentive (PLI) scheme and other initiatives.

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