Lower module pricing will bolster PV deployment in India

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According to Josefin Berg, research & analysis manager at IHS Markit, the oversupply of modules on the global market, resulting from the latest regulatory intervention in China, is creating a better environment for developers and engineering, procurement and construction (EPC) contractors, and will bolster India’s PV deployment this year.

“The overhanging concern about future trade barriers can also lead to an additional rush to import modules to the Indian market later this year,” she said, adding, “PV module prices have already fallen by 20% in the last six months. The price fall is great news particularly for those Indian developers who won projects at record low tariffs last year.”

Indeed, she says many of these projects, which were looking unviable until recently, have now become viable and seem financially attractive.

“On the whole, the timing is very favourable for the entire Indian market, as the government is looking to scale up the sector. More than 25,000 MW of tenders are currently awaiting auction and tariffs are expected to fall further,” adds Vinay Rustagi, managing director of Bridge to India.

Anmol Jaggi, director at Gensol Group, sees the 20% reduction in module prices as benefitting the independent power producers (IPPs), as it is a golden time to book modules and lock-in margins. “However, module prices shall start to strengthen around October, and also the reduction has given an opportunity for the Indian government to impose safeguard duty,” he adds.

“Imposition of safeguard duty currently would not lead to a tariff increase as well, as the government can demonstrate its commitment to the domestic manufacturing.”

The China effect

Independent energy analyst, Corinne Lin recently discussed the fallout of China’s recent solar PV policy decision, including decreasing utilization rates and serious oversupply; and a focus on equipment upgrades, particularly for PERC, SE, half cut and bifiacial technologies. The industry will bounce back in 2019, she concluded.