Indian Cell and Module Market – Current Demand & Supplies
The supply glut in polysilicon looming large in the global solar supply chain with threats of shortages of PV glass. Another strong news making the mark is that silver will double in 2021 due to perceived high consumption by the world solar manufacturing industry. The India-China international border tensions are still a worrisome point for Indian solar market. In India, the news of implementation of Basic Customs Duty (BCD) of 40% on imported solar modules and 25% on solar cells from April 2021, shall again start appearing in the news once again. The delay is mainly caused due to the Govt’s focus on farmers’ agitation which has been taking some grim turns. Further, the Indian solar module manufacturers are grappling with increased conversion cost of modules due to sharp rise in input costs of PV glass, EVA and backsheet leaving the fate of many signed contracts into lurch.
Imported Supplies
The imported solar cells and solar modules have been marred due to sharp rise in sea freight costs due to shortages of space. The cost of a 40 ft HQ container has gone up around USD 4000/- from roughly USD 1000/- some time ago. This cost is further expected to go double in next few months due to huge inventories piling up for shipment after Christmas and New Year holidays. Further, the imported multicrystalline solar cells with efficiency of 18.6% to 18.9% are priced in the range of USD 0.31 to 0.325 per pc FOB China basis whereas the prices of imported mono PERC cells are around USD 0.108 per watt FOB China basis. Further, the prices of Chinese solar modules have started softening a bit due to low demand and currently 72 cell PV modules 335/340 watt are priced in the range of USD 0.177 to USD 0.186 per watt FOB China basis. However, the PV modules like mono PERC 420 watt and above are still available in the price range of USD 0.22 per watt FOB China.
Local Manufacturing
The increased module conversion costs have been proving fatal for many module manufacturing companies as the already signed long term contracts have gone into tizzy. The conversion costs have gone up by almost 3 cents per watt. This has further been delaying the module manufacturing orders of central government schemes, impacting the deadlines of completion of these tenders. The cell manufacturing plans of Waaree and Adani (expansion) are still stuck in limbo due to no buyers for SECI manufacturing linked tenders won at higher prices. The further delay in implementation of BCD could prove detrimental for Govt plans of inviting large conglomerates into solar manufacturing in India.
Demand
The long term demand for solar is intact with the fact that technology giant and one time leader of solar equipment manufacturer, Meyer Burger, Germany has also jumped into manufacturing of solar cells and modules seeing the market potential. However, the short term demand for solar products is still greatly dented by COVID conditions and now got impacted by rising module prices. Further, the Punjab DISCOM shall again tender its DCR requirement for rooftop projects as the previous bid prices were too low and nobody could supply on such abysmally low prices under DCR category. This would certainly impact the tenders of other state govt DISCOM tenders like Himachal Pradesh. However, the commercial and industrial sector demand for solar energy could be a new shining star in the already dim market.
Impact on Solar Cells and Solar Module Pricing
The dollar exchange rate is expected to remain around Rs. 74. The prices of locally manufactured non-DCR 330/335 watt solar modules have started inching up to levels of Rs. 16.50 per watt after sharp rise in input costs whereas the price of locally manufactured 370/380 watt non-DCR mono PERC has been quoted around Rs. 19.50 per watt. However, the companies carrying huge inventories are still offering prices around Rs. 15.80 per watt for 330/335 watt modules. The prices of 330/335 watt DCR modules have been quoted around Rs. 20 per watt.
See you next week for the next analysis of the prices. Stay at work safely. Best Wishes.