Indian Cell and Module Market – Current Demand & Supplies
The global supply chain of solar items has again hit a roadblock with severe flooding in some parts of China resulting in the shutting down of the polysilicon factory of Tongwei. This has created another round of panic of polysilicon shortage among the stakeholders of the solar industry. In India, the overall installations in H2 2020 have been slowed down to mere above 2 GW showing the lull in the market. Though BCD notification is rumoured to be issued in the first week of Sept 2020 but the uncertainty has completely gripped the Indian market as there is no development seen regarding BCD (Basic Customs Duty) on import of solar cells and modules in India. No solution has been found for SEZ units under the BCD regime.
Uncertainty about implementation of BCD has been severely impacting the large ticket imports of solar modules in the country. However, the import of solar cells have been imported to a large extent though in lesser volumes. The sharp rise in prices of imported solar cells have been seen fading away this week due to the wait and watch situation. The FOB China price of 18.8% multi cells is roaming around USD 0.33-/ pc to USD 0.34/- per pc whereas the FOB China price for 330/340 multi modules has been inching to USD 0.17/- per watt. The prices of mono items also looked weak during this week. However, the Tier-1 Chinese companies have been pitching strongly their premium products of 400 Watt modules into India as their strategy to differentiate.
The local manufacturers of solar cells and modules have been facing an uphill task due to sharp rise in input costs in the country. The impact of price rise in wafers, silver paste and other items could not be fully absorbed due to weak demand through non Govt sectors. The capacity utilization of Adani, Waaree and RenewSys have been seen impressive under the COVID conditions. The fate of SEZ units will be decided once the notification of BCD is issued. The local association of solar manufacturers has been pushing for a 50% rate of BCD for long term impact on the solar manufacturing sector of India. The expansion plans (Mono PERC Cells and modules) of Tata Power Solar have been moving at a brisk pace as well. its cell line machines are expected to reach India in Sept 2020.
The demand for solar cells and modules for DCR projects in the country has seen steady. Most of the new large projects have been in the wait and watch situation in the wake of the announcement of BCD. The large projects under execution could also be in limbo if higher rates of BCD has been imposed without a pass through clause. The private demand from residential and commercial segments is already severely impacted to COVID conditions with some silver lining of industrial demand.
Impact on Solar Cells and Solar Module Pricing
The current prices of local non-DCR multi 330/335 watt modules by Tier-1 and Tier-2 local manufacturers have seen between Rs. 16.25 to Rs. 17.50 per watt whereas non DCR mono PERC 380 watt modules are available around Rs. 18.50. The dollar exchange rate is expected again to remain around Rs. 75. The market scene looks quite uncertain due to input material shocks. However, the DCR market looks quite certain and firm for saviour of the local manufacturing companies.
See you next week for the next analysis of the prices. Stay at work safely. Best Wishes.