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					</table><p>The average cost of large-scale solar power projects in India declined by 13.4% year-over-year (YoY) in the third quarter (Q3) of 2023 following the drop in module prices.</p>
<p>Large-scale solar system costs fell for the third quarter in a row. The average project costs decreased by 4.9% quarter over quarter (QoQ).</p>
<p>These findings were published in Mercom India Research&#8217;s recently released <a href="https://www.mercomindia.com/product/q3-2023-india-solar-market-update" target="_blank" rel="noopener"><strong>Q3 2023 India Solar Market Quarterly Update</strong></a><strong><u>.</u></strong></p>
<p><img decoding="async" loading="lazy" class="aligncenter wp-image-60957 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Average-Large-Scale-Solar-System-Cost-Chart001.png" alt="Average Large-Scale Solar System Cost Chart001" width="913" height="456" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Average-Large-Scale-Solar-System-Cost-Chart001.png 913w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Average-Large-Scale-Solar-System-Cost-Chart001-300x150.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Average-Large-Scale-Solar-System-Cost-Chart001-768x384.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Average-Large-Scale-Solar-System-Cost-Chart001-650x325.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Average-Large-Scale-Solar-System-Cost-Chart001-624x312.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Average-Large-Scale-Solar-System-Cost-Chart001-600x300.png 600w" sizes="(max-width: 913px) 100vw, 913px" /></p>
<p>The lower system costs mean CAPEX savings and higher returns on investment for project developers.</p>
<p>The average selling price of Chinese mono PERC modules fell 29% QoQ and 52% YoY.</p>
<p>The MNRE <a href="https://www.mercomindia.com/mnre-almm-exemption-solar-projects-march-31-2024" target="_blank" rel="noopener">suspended</a> the Approved List of Models and Manufacturers (ALMM) order, allowing developers to import low-cost modules until March 31, 2024.</p>
<p>As the deadline approaches, developers have ramped up module procurement at cheaper prices from China and other Southeast Asian countries to commission projects on time.</p>
<p>India <a href="https://www.mercomindia.com/indian-solar-exports-surge-q3-2023" target="_blank" rel="noopener">imported</a> solar cells and modules totaling $1.2 billion (~₹101.6 billion) in Q3 2023, a 31% increase from $926.6 million (~₹76.6 billion) in Q2. Imports were up 208% YoY from $394 million (~₹32.5 billion).</p>
<p>Solar cells accounted for nearly 41% of the quarter&#8217;s imports compared to 55% in Q2 2023, whereas solar modules&#8217; import share increased by 59% from 45%.</p>
<p>The prices of power conditioning units fell 3.8% QoQ. During the quarter, the industry gradually shifted towards central inverters over string inverters for their projects.</p>
<p>During Q3 2023, India&#8217;s capacity additions were <a href="https://www.mercomindia.com/india-adds-5-6-gw-solar-47-yoy-drop" target="_blank" rel="noopener">down</a> by over 34% YoY, with 1.9 GW installed, of which utility-scale installations accounted for over 1.4 GW, down nearly 43% YoY.</p>
<p>India&#8217;s cumulative installed solar capacity, including rooftop solar installations, surpassed 69 GW as of September 2023.</p>
<p>Mercom&#8217;s Q3 2023 India Solar Market Quarterly Update is 75 pages long and covers all facets of the Indian solar market and a detailed analysis of the project cost trends. For the complete report, <strong>visit <a href="https://www.mercomindia.com/product/q3-2023-india-solar-market-update" target="_blank" rel="noopener">https://www.mercomindia.com/product/q3-2023-india-solar-market-update</a></strong></p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/urvashi-gupta/" class="vcard author" rel="author"><span class="fn">Urvashi Gupta</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="authorboxn" style="padding-bottom: 20px"><a href="#" target="_blank" rel="noopener"><strong style="color: #00b451">Urvashi Gupta</strong> </a>is a research associate at Mercom India Research.</div>
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<div class="authorboxn"><a href="https://mercomindia.com/author/urvashi-gupta/" target="_blank" rel="noopener">More articles from Urvashi Gupta</a></div>
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Average Cost of Large-Scale Solar Projects Fell 13% YoY in Q3

<p>According to Mercom’s recently released <a href="https://mercomindia.com/product/q2-2021-india-solar-market-update/" target="_blank" rel="noopener">Q2 2021 India Solar Market Update</a>, the average cost of large-scale solar projects in the second quarter of 2021 (Q2 2021) was ₹38.6 million (~$529,036)/MW.</p>
<p>The cost increased by 12% when compared to the same period <a href="https://mercomindia.com/average-cost-solar-fell-q2-2020/" target="_blank" rel="noopener">last year</a> when it was ₹34 million (~$455,532)/MW and a 5% rise from the <a href="https://mercomindia.com/higher-module-prices-raise-large-scale-rooftop-cost/" target="_blank" rel="noopener">previous quarter</a> (Q4 2020) when the cost was about ₹35.3 million (~$488,255)/MW.</p>
<p style="text-align: center;"><img decoding="async" loading="lazy" class="aligncenter size-full wp-image-28740" src="https://mercomindia.com/wp-content/uploads/2021/09/Q2-2021-Average-Large-Scale-Solar-Project-Cost-per-MW.png" alt="Q2 2021 Average Large Scale Solar Project Cost per MW" width="640" height="432" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2021/09/Q2-2021-Average-Large-Scale-Solar-Project-Cost-per-MW.png 640w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2021/09/Q2-2021-Average-Large-Scale-Solar-Project-Cost-per-MW-300x203.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2021/09/Q2-2021-Average-Large-Scale-Solar-Project-Cost-per-MW-624x421.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2021/09/Q2-2021-Average-Large-Scale-Solar-Project-Cost-per-MW-600x405.png 600w" sizes="(max-width: 640px) 100vw, 640px" /></p>
<p>The costs have soared due to the rise in the component costs led by modules and other commodities, along with a shortage of some raw materials. The global steel prices surged in the first four months of 2021. But steel producers struggled to supply as the production was low due to a shortage of iron ore, the raw material used to produce steel.</p>
<p>Meanwhile, the average cost per MW for rooftop solar installations was around ₹39.6 million (~$541,942)/MW, up 8% from the same period last year when costs stood at ₹36.5 million (~$489,027). The average cost for setting up rooftop solar systems was ₹38 million (~$524,445)/MW in the previous quarter, up roughly 4% quarter-over-quarter (QoQ).</p>
<p style="text-align: center;"><img decoding="async" loading="lazy" class="aligncenter size-full wp-image-28739" src="https://mercomindia.com/wp-content/uploads/2021/09/Q2-2021-Average-Rooftop-Solar-System-Cost-in-India-per-MW.png" alt="Q2 2021 Average Rooftop Solar System Cost in India per MW" width="562" height="368" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2021/09/Q2-2021-Average-Rooftop-Solar-System-Cost-in-India-per-MW.png 562w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2021/09/Q2-2021-Average-Rooftop-Solar-System-Cost-in-India-per-MW-300x196.png 300w" sizes="(max-width: 562px) 100vw, 562px" /></p>
<p>Increasing solar module ASPs continued in Q2 2021, driven by expensive polysilicon and higher raw material prices. Freight charges have remained high since last year due to shipping container shortages and global logistical challenges.</p>
<p>The container shortage issue has not yet been resolved, resulting in high freight charges, adversely impacting module prices. The module prices had surged due to the supply-demand gap, adding more financial burden on rooftop solar developers.</p>
<p>The rooftop solar sector has been seeing better financing opportunities with a reduction in the cost of debt, increased availability of equity, and the overall cost of financing going down. Q2 also saw many government tenders being issued, indicating a demand for rooftop solar in this segment.</p>
<p>However, bucking the trend, the bids have been <a href="https://mercomindia.com/tariff-neemuch-solar-auction-aberration/" target="_blank" rel="noopener">trending</a> down in the recent auctions, which is a cause for concern in the industry.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/rahul-nair/" class="vcard author" rel="author"><span class="fn">Rahul Nair</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><p>Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. <a href="https://mercomindia.com/author/rahul-nair/" rel="noopener noreferrer">More articles from Rahul Nair.</a></p>
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Average Cost to Build Large-Scale Solar Rises by 12% Year-Over-Year

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