Experts predict a resurgence in stalled solar projects, propelled by a remarkable 48% drop in solar module prices over the past year. The decline is attributed to surplus production in China, causing a surplus in the market and an inability to meet demand in Europe and the U.S.
Driving Forces Behind Solar Project Resurgence
Solar panel prices have reached a new low of 13 cents per watt peak in December, down from 25 cents per watt peak a year ago. Developers are seizing the opportunity by placing orders from China, taking advantage of the postponed Approved List of Modules and Manufacturers (ALMM). This move is expected to facilitate the commissioning of approximately 15 GW capacity projects that were hindered during and post-Covid due to escalating commodity prices.
Positive Impact on Debt Coverage Metrics
ICRA, in a statement, notes a significant decline in solar PV cell and module prices by 65% and 50%, respectively, over the past 12 months. This decline is contributing to a healthy improvement in debt coverage metrics for upcoming solar power projects. For projects with a bid tariff of Rs 2.5 per unit, utilizing modules from domestic Original Equipment Manufacturers (OEMs) with imported PV cells, the average Debt Service Coverage Ratio (DSCR) has seen a notable improvement.
India’s Renewable Energy Capacity Projection
ICRA forecasts a surge in India’s installed renewable energy capacity to touch 170 GW by March 2025, compared to the current 132 GW as of October. This projection is driven by a substantial increase in tendering activity, with the government having already tendered 16 GW of renewable energy capacity in FY24, and an additional 17 GW bids in progress through central nodal agencies.
Source：bloombergquint.com
