Impact of Solar Modules Price Rise on Indian Solar Industry

The solar industry in India is experiencing a significant price hike in Solar PV modules,creating ripples across the value chain. For solar EPCs companies, developers and installers, this increase poses immediate challenges, while also signaling long-term shifts in the industry.

Why Solar Module Prices Are Rising in India?

Two key factors are driving this surge: India's recent imposition of anti-dumping duties on imported solar glass and China's reduction in export incentives for solar modules and components. Here's a closer look at the causes and implications of this volatile situation.

a. Anti-Dumping Duty on Solar Glass Imports

The Indian government recently imposed anti-dumping duties on textured and tempered solar glass imported from China and Vietnam. This move aims to protect Indian manufacturers from unfair competition. In its preliminary findings, the Directorate General of Trade Remedies (DGTR) identified several Chinese and Vietnamese solar glass manufacturers engaging in the dumping of ultra-cheap solar glass in India.

While this measure supports India’s domestic solar glass manufacturers, it also raises the production cost of solar modules, as solar glass is a critical component. This financial burden directly impacts module manufacturers, EPC companies, and consumers.

b. China Reduces Export Rebates

In a surprising policy change, the Chinese government reduced export rebates for solar modules from 13% to 9%. Additionally, rebates on ancillary components like aluminum frames and copper wires have been eliminated, pushing module prices higher globally.

For every 1 cent per watt-peak increase in module prices, electricity tariffs in India could rise by 6–7 paise per unit. With module prices increasing by 2–4 cents, Indian consumers may see tariffs rise by 12–28 paise per unit. This change is particularly challenging for India, which relies on China for 80% of its solar cells.

Impact of Price Rise on Solar EPCs & Project Developers

Utility-scale solar projects are expected to dominate new capacity additions in 2025. However, this segment faces tighter pricing constraints due to competitive tariff bids and state-level policies. State DISCOMS have expressed reluctance to procure solar power at rates exceeding ₹2.80 per kWh, limiting profitability for developers.

A 10% increase in solar module costs can lead to a rise of up to 20 paise per kWh for large tenders, significantly affecting project economics. Experts suggest the market can accommodate only a 10-15% cost increase from current levels before facing resistance from developers, consumers, and state discoms.

Impact on Government Subsidy Projects

Government subsidy schemes such as PM Surya Ghar and PM KUSUM Yojana drive demand for solar power in India. These programs aim to solarize 1 crore households, ensuring steady demand for Distributed Solar (DCR) PV modules, even in a price-sensitive environment.

Subsidies under these schemes make solar power affordable for farmers and residential consumers, sustaining momentum in the sector. High-quality DCR PV modules align with the demand generated by these initiatives, bolstering India’s clean energy transition and promoting domestic manufacturing capabilities.

Impact on Corporate Solar Adoption Trends

Corporate buyers are projected to install over 2.5 GW of solar capacity in 2025, reflecting their commitment to renewable energy goals. This segment exhibits higher elasticity in demand and is willing to invest in solar, even with moderate cost increases, due to long-term savings and sustainability targets.

PV modules, including Bi-Facial and N-TOPCon technologies, cater to this segment, offering advanced solutions for rooftop and open-access solar projects.

The Road Ahead

The Need for Strategic Adaptation

To navigate these challenges, the solar industry must adopt a strategic shift in operations:

• Strengthening domestic partnerships: Collaborate with local suppliers to reduce dependency on imports.

• Innovative cost optimization: Leverage cutting-edge technology and process improvements to offset rising material costs.

• Transparent customer communication: Educate consumers on the long-term financial and environmental benefits of solar energy.

Policy and Industry Synergy

Policymakers must cushion the impact of price fluctuations by enhancing incentives for domestic manufacturing and providing policy clarity. Programs like the Production-Linked Incentive (PLI) scheme should be expanded to encourage local production of modules and upstream components like wafers and cells.

A Call for Domestic Solar Glass Manufacturing Growth

This disruption offers Indian manufacturers an opportunity to ramp up production capacities, innovate, and compete globally. Solar glass manufacturers, module producers, and ancillary component suppliers must seize this moment to establish India as a global hub for solar technology through:

• Investment in R&D: Develop advanced, cost-efficient solar technologies like N-TOPCon and HJT modules.

• Expanding production capacities: Scale manufacturing to meet domestic and export demands, reducing reliance on imports.

Conclusion

The rise in PV module prices presents challenges but also an opportunity for India’s solar industry to strengthen and innovate. By optimizing costs, enhancing local partnerships, and educating consumers on long-term benefits, solar EPC companies can adapt effectively.

Policymakers, industry stakeholders, and consumers must collaborate to turn this challenge into a stepping stone for a brighter and more sustainable energy future. Through strategic adaptation and a focus on domestic manufacturing growth, India’s solar industry can weather the storm and emerge as a global leader in renewable energy.