Module Price Rise Impacting PV Developers In India

• Solar power project developer ACME Solar is reported by local media to be exploring exiting a project it won in Bhadla Solar Park for record low solar tariff of 2.44 INR ($0.037) per kWh
• Another wind power project developer, Inox Wind, is also reported to be interested in leaving the project it won for lowest wind power tariff of 3.46 INR ($0.054) per kWh
• Rise in prices of modules from China have along with increased competition in terms of tariff based auctions are blamed to be the reasons
• ACME Solar has denied the allegations in the Mint story

With China expected to end 2017 with 45 GW of new solar power capacity and adding 12 GW in Q3/2017 alone, according to estimates from IHS Markit, supply of solar modules is scarce and  prices have been rising over the last weeks (see IHS Ups PV Market Outlook 2017 To 90 GW). These developments are starting to impact solar power project developers in India.

Leading business daily Mint has reported about two prominent examples, alleging ACME Solar and a wind project developer, Inox Wind Infrastructure Services Ltd., to contemplate about exiting the projects they won for the lowest tariffs for large scale projects in the solar and wind space in India.

ACME Solar had won 200 MW PV capacity at Bhadla Solar Park for a tariff of 2.44 INR ($0.037) per kWh in May 2017 (see ACME Wins 200 MW At 2.44 INR Record). Inox Wind had bid for a 1 GW wind power tender and won a 250 MW contract for 3.46 INR ($0.054) per kWh in February 2017.

"With Chinese solar module prices firming up, ACME is exploring an exit. Inox is also trying to exit with a sale condition precedent which involves the acquirer to use Inox Group's wind turbines. These can be structured transactions," Mint quoted an anonymous source.

When TaiyangNews contacted ACME Solar to learn about details of the potential exit, the company's Head of Marketing and Communications Vijeta Chaudhary responded that it is a 'truly wrong news,' promising to share more information soon.

However, increasingly lower tariffs are seen by industry experts as a potential disruption in the Indian power sector (see Low Tariffs Face Uncertainty In India). This development was mainly triggered by quickly decreasing module prices over the last few years. With huge demand from China and the US currently spoiling the demand-supply balance, module prices have increased dramatically over the last few weeks. In consequence, module suppliers are increasingly trying to renegotiate module prices with Indian developers previously agreed upon – this is true anywhere, also in India (see Double Whammy For Project Developers In India).