The average cost of large-scale solar projects in the second quarter (Q2) of the calendar year (CY) 2022 was ₹45.4 million (~$568,536)/MW, according to Mercom’s recently released Q2 2022 India Solar Market Update.

The average cost increased by 18% compared to the same period. The cost rose 4.4% from the previous quarter.

India installed over 3.5 GW of large-scale solar capacity in Q2 CY 2022, an increase of 23% compared to 2.9 GW installed in the previous quarter. On a year-over-year (YoY) basis, installations rose by 82% from 1.9 GW. Large-scale solar accounted for 90% of the installations during the quarter.

Project costs varied, depending on the modules used. The costs on the higher were with the use the Chinese mono PERC modules with basic customs duty (BCD).

Project costs have now risen for eight straight quarters. Pandemic-driven raw material shortages, increased freight charges, Balance of System (BoS) rates, rupee depreciation, increased duties and taxes, and worldwide commodity inflation have led to the continued cost escalation.

With the BCD applicable from April 2022 on solar cells and modules, this quarter saw a significant increase in solar module prices. Indian mono PERC module Average Selling Prices (ASPs) rose 15.2% QoQ and 28% YoY.

Chinese mono PERC module ASPs increased 49.8% QoQ and by a whopping 75.1% YoY amid the 40% BCD application, rupee depreciation, and continued polysilicon shortages.

Polysilicon shortages and increased prices of commodities such as aluminum, copper, and silver have significantly driven module prices. Additionally, duties on components such as glass, EVA encapsulant, and backsheets have added to the costs of domestic module manufacturing. Increasing commodity prices have also impacted the project’s power evacuation infrastructure cost.

Recently, the Ministry of Finance imposed anti-dumping duty on the import of fluoro backsheets (excluding transparent backsheets) from China to offset the harm caused to the domestic market.

Mercom’s India Solar Q2 2022 report covers all facets of India’s solar market. For the complete report, visit:  https://mercomindia.com/product/q2-2022-india-solar-market-update