According to Mercom’s recent Q2 2021 India Solar Market Update, the average cost of large-scale solar projects in Q2 2021 (Q2 2021) was 38.6 million yen (~ $ 529,036) / MW .
The cost increased by 12% compared to the same period last year when it was 34 million (~ $ 455,532) / MW and an increase of 5% compared to the previous quarter (Q4 2020) where the cost was approximately 35.3 million (~ $ 488,255). ) / MW.
Costs have skyrocketed due to higher component costs driven by modules and other commodities, as well as a shortage of some raw materials. Global steel prices surged in the first four months of 2021. But steel producers struggled to source supplies as production was low due to a shortage of iron ore, the material. first used to produce steel.
Meanwhile, the average cost per MW of rooftop solar installations was around 39.6 million yen (~ $ 541,942) / MW, up 8% from the same period last year, when the costs were 36.5 million yen (~ $ 489,027). The average cost of installing rooftop solar systems was 38 million yen (~ $ 524,445) / MW in the previous quarter, up about 4% quarter over quarter (QoQ).
The rise in ASPs of solar modules continued in the second quarter of 2021, driven by expensive polysilicon and rising raw material prices. Shipping costs have remained high since last year due to shortages of shipping containers and global logistics challenges.
The problem of container shortage has not yet been solved, resulting in high transport costs, which has a negative impact on module prices. Module prices had increased due to the gap between supply and demand, adding an additional financial burden to rooftop solar developers.
The rooftop solar industry has seen better financing opportunities with lower cost of debt, increased availability of equity and lower overall cost of financing. The second quarter also saw numerous government tenders, indicating demand for rooftop solar power in this segment.
However, against the trend, bids have trended downward in recent auctions, which is of concern to the industry.
Rahul is a journalist at Mercom India. Prior to entering the world of renewable energy, Rahul was the head of the Gujarat office for The Quint. He also worked for DNA Ahmedabad and Ahmedabad Mirror. Coming from a banking and financial background, Rahul also worked for JP Morgan Chase and State Bank of India. More articles by Rahul Nair.