China blamed as solar auctions plunge 51 pct quarter on quarter
Increase in Chinese solar module prices has adversely impacted the frequency of auctions in the sector. According to a report released by research firm Mercom on Tuesday, a total of 1,232 MW of solar projects were auctioned in Q2FY18, down 51% quarter-on-quarter. Mercom noted that average prices of Chinese solar modules—which are most widely used in Indian solar projects—increased by 14% q-o-q in the quarter ended September 30. Based on order size and other parameters, module prices ranged between Rs 19.4/watt to Rs 24.6/watt, about 20% more than the expectations of Indian solar project developers. “Even though the Indian solar market is on pace for a record-breaking year, the momentum has definitely slowed,” said Raj Prabhu, CEO, Mercom Capital Group. The pipeline of utility-scale projects is currently at about 11.5 GW and another 5.6 GW of tenders are pending auction.
The ongoing anti-dumping investigations against the import of solar cells was initiated by the Centre in July following a petition filed by the Indian Solar Manufacturing Association. If a 30% anti-dumping duty is imposed on imported solar cells from China, Taiwan and Malaysia, solar tariff will need to go up by about Rs 0.48/unit (17%) to restore pre-duty financial returns of the solar projects, research firm Bridge to India said in a recent report. “The implication of GST on the solar tariffs also meant some of the tenders getting postponed/delayed till there is clarity on the issue,” said an expert. However, the person added that the delays can “also be seen in light of government’s intention to introduce large sized tenders (of more than 10 GW) for solar in one go, which is aimed at boosting the domestic industry”. The lowest solar tariff discovered in the quarter was Rs 2.65/unit by Gujarat. This is incidentally the cheapest solar rate yet under any state-owned scheme.