The average system cost of large-scale solar projects recorded mixed movements in the fourth quarter of 2025.

Projects with Indian modules across technologies posted consistent quarter-over-quarter (QoQ) declines, while projects with Chinese TOPCon modules saw QoQ cost increases.

Projects using Indian TOPCon modules continued to command a premium, maintaining the highest cost levels among module categories.

In contrast, solar projects built with Chinese mono PERC modules remained the most cost-competitive option in the market.

All Indian module technologies recorded QoQ cost reductions in Q4 2025. Projects deploying Domestic Content Requirement (DCR)-compliant Indian TOPCon modules recorded declines of over 3.4%, while projects with Indian TOPCon modules saw costs fall by nearly 3%.

Similarly, DCR-compliant Indian mono PERC projects declined by 2.8%, and Indian mono PERC projects recorded a 2.4% reduction. While these quarterly declines were more pronounced than those seen in some Chinese module categories, Indian module-based projects continued to operate at higher overall system cost levels.

On a YoY basis, both DCR-compliant and non-DCR Indian mono PERC system costs recorded declines of 2.7% and 7.9%, respectively. Despite these reductions, the structural cost premium associated with domestic manufacturing and DCR compliance remained intact.

Projects deploying Chinese mono PERC modules recorded a 1.3% QoQ decline, with YoY costs falling by 5.8%. Chinese mono PERC systems remained the most cost-competitive configuration in the market during the quarter, despite the QoQ cost increases.

In contrast, projects using Chinese TOPCon modules recorded a 2.7% QoQ increase, reflecting the rise in Chinese cell prices following the reduction in VAT export rebates and higher polysilicon prices. Overall, Chinese module prices remained relatively stable, registering only a mild upward movement.

System cost movements across technologies ranged from a decline of over 3.4% to an increase of 2.7%, highlighting divergence in pricing trends during the quarter. However, the overall cost structure remained unchanged, with Chinese module-based systems maintaining a clear pricing advantage over Indian and DCR-compliant alternatives.

Chinese mono PERC modules accounted for the lowest share of the system cost at 39.7%, underscoring their competitive advantage driven by large-scale manufacturing, mature supply chains, and operational efficiencies.

In contrast, Indian TOPCon DCR-compliant modules accounted for the highest cost share at 61.9%, reflecting higher domestic production costs, limited manufacturing scale, and the added premium associated with meeting DCR compliance norms.

Projects using mono PERC DCR-compliant modules had total project costs about 24% higher than non-DCR mono PERC installations. TOPCon DCR-based projects were the most expensive configuration, with costs approximately 37% to 38% higher than projects using Chinese modules and marginally above mono PERC DCR deployments.

The cost of power conditioning units, primarily solar inverters, declined by 0.6% in Q4 2025, accounting for 4.3% to 6.8% of the total system cost of large-scale solar projects. The marginal reduction reflects stable supply conditions and limited price volatility in inverter components during the quarter.

Module mounting structure (MMS) costs recorded a sharper 11.4% decline in Q4 2025, driven by lower steel prices. MMS represented about 4.6% to 7.2% of total project costs.

Meanwhile, other balance-of-system (BoS) components remained largely stable, contributing a relatively small share of around 1.2% to 1.9% of overall project costs.

Broader macroeconomic conditions also supported cost moderation. According to the Ministry of Statistics and Program Implementation, retail inflation eased to 1.33% in December 2025, down from 1.54% in September 2025, helping limit upward pressure on input and logistics costs.

These findings are from Mercom’s Q4 2025 India Solar Market Update, a 141-page report that provides an in-depth assessment of India’s solar sector, covering project costs and installations, supply-chain trends, policy developments, and market forecasts.

For the complete report, visit: https://www.mercomindia.com/product/q4-2025-india-solar-market-update