A Brief of Indian Cell and Module Market – Current Demand & Supplies
As the India solar market is heavily dependent on Chinese market for solar materials and finished products like cells and modules, the market has been witnessing a complete disruption due to corona virus starting from Jan 2020. With the lockdown conditions in India and other parts of the world have severely impacted the supplies of solar cells and modules in India. Since almost all cell and module manufacturing units, except Mundra Solar (Adani Group Company) which has started partial production in last week, are not in production mode due to lockdown conditions.
However, the current stocks of modules with these units and their channel partners can start module supplies from their current stocks once the lockdown conditions are eased out. The supplies of imported modules would start to ease out as the imported module shipments, which have started from China by end March/early April, would start landing at Indian ports around end of May or early June. This would change the supply positions of modules significantly.
As majority of Indian large module manufacturers are located in SEZ, these units are allowed to start manufacturing operations after 20th April 2020 as per Govt orders. But this would be largely dependent upon if there is enough demand for modules in the market coupled with availability of sufficient materials like solar cells (can be imported through air), glass, frames and above all manpower to produce modules. However, these units are only expected to ramp up their productions slowly owing to these constraints.
There could be immediate demand for solar modules as the lockdown eases out due to incomplete projects but largely there would be extremely scanty demand in the local residential and commercial market due to low disposal income coupled with no overseas demand for exports of solar modules in next two quarters or so. The Govt tenders and other incomplete large projects would only be the saviours for the industry at the moment.
Impact on Module Pricing
With fear of scarcity of stocks of materials & finished products in the country along with rising freight costs especially airfreight costs and dollar fluctuations, has already started pushing the cells and module prices by 8% to 10% in India. The non DCR poly 330 watt module ex factory prices from top Indian module manufacturers like Vikram, Adani, Waaree, Renewsys and Goldi have started touching around Rs. 18.25 per watt whereas other medium scale module manufacturers like saatvik offer similar products between Rs. 17.25 to Rs. 17.50 per watt. Similarly, the prices of imported Chinese poly 330 watt modules of tier-1 companies like Trina, REC, Canadian Solar etc hover around Rs. 16 to Rs. 16.50 per watt. This increase in prices is expected to be further mitigated in next three to four weeks time span by due to sudden drop in prices of polysilicon, wafer and cell prices in China. However, the prices would largely be determined by local demand for solar modules in the market in next four weeks or so as the current prices might not be reflecting true picture due to lack of demand in the market.
See you next week with next analysis of the prices. Stay home and Stay safe. Thanks.