Solar Module Prices Jump 33% in Weeks, Putting ₹2.1 Trillion of Indian Renewable Projects at Risk

Solar module prices have risen sharply by nearly one-third since late December, sending ripples across India’s renewable energy industry and raising concerns over project viability. The sudden increase is being driven by higher silver and aluminium prices, depreciation of the rupee, and fresh disruptions in global supply chains after China tightened wafer quotas and withdrew a 9.00% value-added tax refund.

Component Costs Spike Rapidly

The cost pressure is most visible in photovoltaic cells, where prices have surged in a matter of weeks:

Component: Photovoltaic Cells
Previous Price: 3.50 cents per watt peak
Current Price: 5.50 cents per watt peak
Change: +57%

Module prices have also climbed, translating into an additional ₹20.00 lakh per MW for developers, compared to earlier module costs of ₹2.00–3.00 crore per MW.

“The sudden rise in cell prices exposes the structural fragility of India’s solar supply chain,” said Prashant Mathur, Chief Executive Officer of Saatvik Green Energy Ltd. “Higher equipment costs will push up capital expenditure for new projects, and tariffs under future power purchase agreements are likely to firm up after years of steady decline.”

Pressure on India’s Solar Expansion Plans

The timing of the price surge is critical, as India is in the middle of an aggressive renewable capacity build-out:

Solar capacity under construction: 93.00 GW
Installed solar capacity: 135.81 GW
Solar target by 2030: 300.00 GW
Overall non-fossil fuel target: 500.00 GW
Projects without long-term PPAs: 43.00 GW
Investment value at risk: ₹2.10 trillion

States continue to favour long-term coal-based power purchase agreements for price stability, while distribution companies are often forced to sell renewable power on exchanges at rates below procurement costs due to excess supply during peak solar hours.

Manufacturing Strength, Import Dependence

Although India has built significant module manufacturing capacity, it remains dependent on imports for key inputs. According to an executive at a leading domestic component manufacturer, module makers have raised prices by up to ₹20.00 lakh per MW because cells and silver are largely sourced from overseas markets.

Solar module manufacturing capacity: Over 100.00 GW
Projected capacity by 2025: 125.00 GW
Cell manufacturing capacity: 18.00 GW
Key imports: Polysilicon, ingots, wafers

Major domestic players include Adani Solar, ACME Solar, Avaada Electro, ReNew, Waaree Energies and Saatvik Solar, while Chinese giants such as Longi, Jinko Solar and Trina Solar continue to dominate the upstream supply chain.

Policy Constraints and Cost Pass-Through

Under government-supported schemes, developers must procure modules from manufacturers listed on the Approved List of Models and Manufacturers. A similar requirement for cells will come into force from June, with wafers expected to be added by 2028 to encourage domestic production.

“There is no mechanism in existing power purchase agreements to revise tariffs or compensate developers if component prices rise due to external shocks, such as policy actions by supplier countries,” said Mohit Bhargava, former CEO of NTPC Green Energy Ltd. He added that steep cost increases can erode margins for independent power producers and weaken project economics.

Ashish Agarwal, Head of Solar and Storage at BluPine Energy, believes the current spike may be temporary, linked to seasonal production slowdowns in China ahead of the Lunar New Year. “This pattern has been seen before. As factories resume normal output, prices are likely to soften and move back towards earlier levels,” said Agarwal, whose Actis-backed platform has nearly 4.00 GW of renewable assets.