Fall in solar module prices can help renewable energy producers, who’ve bagged contracts for the installation of solar projects at aggressive tariffs but they are yet to buy solar panels & other related equipment or yet to start construction, resulting in greater margins, based on company executives and analysts.
Globally, prices of PV modules have reduced by up to 10% in the first half of this year.Costs of Pro Volaitic Solar modules is an essential component in the establishment of solar plants, which has recently seen a downward trend due to oversupply in China. Modules constitute nearly 60% of the solar project’s cost. “If module prices come further down then that will benefit only those projects that are not yet been built,” stated Saurabh Jain Managing Director of Jaina Solar Systems Pvt Ltd, who are specialized of undertaking government projects to set up solar power plants in isolated hilly region.
Reduction in the cost of solar panels in India would be further assisted by depreciation from the Chinese Yuan from the Indian Rupee by about 3-4% over this past year.Lowering costs means that some of the projects, that have been called unviable because of low bids & high cost they can now be executed with the good margin. And those projects which were not getting bidders can now be won at aggressive tariffs. Numerous companies including Fortum Oyj’s Indian unit, Goldman Sachs-backed ReNew Power Endeavors Pvt. Limited, RattanIndia Solar, Adani Eco-friendly Energy Limited, Orange Renewable, and Mahindra Renewables have lately won the solar project in different states.
“Indian solar project developers are going to be relieved to know that the (module) prices are coming lower a lot more dramatically than expected, supplying a chance to enhance returns despite aggressively bidding to win a tender for installation of a Solar Plant. The autumn in prices comes in a perfect here we are at Indian solar market as Q1 2017 is anticipated is the greatest quarter for brand new capacity addition till date,” Bridge to India stated.
For any 10 megawatts (MW) plant, for instance, prices of tier-1 modules came lower to 42 cents per watt in This summer 2016 from 55 cents per watt in The month of January 2015-a small amount of 23.6%, But industry people sting wants module prices to fall another 10% within the several weeks in the future. Solar modules are rated as tier-1, tier-2, tier-3, and tier-4, where tier-1 would be the greatest quality modules in the top 2% from the producers.
India is among a couple of marketplaces promising strong growth of developers of renewable energy plants. It presently has 8 gigawatts (GW) of installed solar capacity. Getting added capacity at the quickest rate in 2016, India is anticipated to get the 4th biggest solar market this season, overtaking the United kingdom, Germany, and France. The nation includes a target of establishing 100GW of solar and 60GW of wind energy capacity by 2022.
Solar tariffs first fell below Rs.5 per unit in November, brought by SunEdison Corporation.’s aggressive bid of Rs.4.63 per kilowatt-hour (kWh) inside a reverse online auction marketplace. Tariffs fell further to Rs.4.34 in a The month of January e-auction carried out by condition-run National Thermal Power Limited (NTPC).Recent bids in the plethora of Rs.4.6-5.3 per kWh imply that price wold come down by 6-13% with respect to the price of debt, JM Financial Institutional Investments Limited had stated inside a set of 11 April. With equipment cost getting fallen since these developers could now expect a greater return, analysts suggest.
Solar projects won since during the month of January would help the most as, construction typically commences between 8-12 several weeks from the moment of winning the work, stated Divya Charen, an analyst at India Ratings. There’s a niche of 6-8 several weeks from the moment a task signs an electrical purchase agreement (PPA) having a buyer towards the time that it procures equipment and concurrently searches for financial closure of project cost. Indeed, those firms which are just setting up capacity to lead to that particular pipeline will take advantage of the falling module prices. For instance, companies, which are in the pipeline to set up the business to build solar projects .