According to the recent "India Solar Market Update Q1 2024" report by Mercom India Research, the average cost of utility-scale solar PV projects in India decreased by 28.2% year-over-year in the first quarter of this year. This significant change is primarily attributed to the rapid decline in solar module prices.
Since the first quarter of 2023, the cost of utility-scale solar projects in India has been on a downward trend for five consecutive quarters. Notably, Q1 2024 reached a historic low, with the average project cost dropping by 7.1% compared to the previous quarter.
Research indicates that the notable reduction in solar module costs has lowered investment expenses and increased the internal rate of return for utility-scale solar projects, thereby further driving the steady growth of solar power generation in India.
In Q1 2024, India installed over 10 GW of solar systems, setting a new quarterly installation record and achieving a significant milestone.
The report highlights that the average price of Chinese-manufactured PERC solar modules fell by 12.4% quarter-over-quarter and 48.3% year-over-year, while the average price of India-manufactured monocrystalline PERC solar modules declined by 13.6% quarter-over-quarter and 41.7% year-over-year.
In Q1 2024, India imported solar cells and modules worth over $2 billion (approximately ₹166.9 billion), a 2.1% decrease from Q4 2023's $2.05 billion (approximately ₹170.9 billion). However, this represents a 147.5% increase compared to $812 million (approximately ₹66.7 billion) in Q1 2023. Among the total imported solar products, solar cells accounted for 20.9%, while solar modules comprised a substantial 79.1%.
An oversupply of solar materials and products has led to reduced sales prices for both Chinese and Indian solar modules. However, due to limited domestic capacity for solar cells, the average cost of solar projects using domestically produced (DCR-compliant) modules remains significantly higher than those using imported modules.
The cost of solar system mounting structures decreased by 3.6% quarter-over-quarter. The cost of Balance of System (BOS) components remained largely unchanged from Q4 2023, contributing 1.6% to the average solar system price.
Given that India's Ministry of New and Renewable Energy has issued a notification to re-implement the Approved List of Models and Manufacturers (ALMM) regulations for all solar projects (including rooftop and open-access projects) starting April 1, 2024, it is anticipated that the average cost of installing utility-scale solar projects in India may increase from Q2 2024 onward. The ALMM list aims to regulate the solar market, but this move might also restrict the availability of lower-priced imported solar modules, thereby increasing project installation costs.
Source：BJX PV
