Supply glut in solar panel market favours prices in India: Bridge to India

The glut is likely to continue for a year and possibly longer as China is unlikely to grow

The landed price of imported solar panel in India crashed to $0.36/Wp in past three months owing to supply glut globally and falling prices of its raw material polysilicon in China.

"Polysilicon prices have dropped 30 per cent in a month (refer), wafer prices by 20 per cent (refer) and similar reductions are seen across the value chain. Landed module prices in India have dropped by nearly 15 per cent," said a recent report by Bridge to India (BTI).

The investment tracking agency in the solar sector expects that the supply glut is likely to continue for a year and possibly longer as China is unlikely to grow out of trouble this time.

"Indian project developers will see a major windfall but notwithstanding major government thrust on domestic manufacturing, the country will find it difficult to attract large investments in a technology driven industry that has seen two major global supply gluts in the past five years," said the report.

It said that the Indian project developers would reap benefits out of this fall in prices.

"Tariff bids that seemed aggressive in past now seem very attractive. For example, projects with tariffs of Rs 5.17-5.72/unit for 2,000 MW tender in Telangana, completed in August 2015 when module prices were about $0.45/Wp, will be procuring modules at current prices and will see substantial jump in returns," it said.