Module Price Trend Analysis
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The Gensol Group white paper discusses the significant growth of the solar PV market in India, highlighting a compound annual growth rate (CAGR) of 60% for the country compared to 37% globally, with expectations to reach 100 GW capacity by 2023. It emphasizes a sharp decline in project costs and solar module prices, dropping by over 71% from September 2013 to January 2019, driven by increased demand and competitive pricing. The report also notes key challenges such as policy implications, currency fluctuations, and the impact of safeguard duties on imported modules affecting the market dynamics.
Module Price Trend Analysis
- 1. Gensol Group Solar PV Module Price Index Price Trend & Forecast 2019 Gensol Engineering Pvt. Ltd White Paper Copyright © Gensol Engineering Pvt. Ltd., 2019 Author Gensol Group Publication Date 19.02.2019
- 2. Gensol Group 1. INTRODUCTION - PV MARKET DEMAND Solar Market in the India completely depends on the demand and module supply. Looking into the last few years’ trends, there has been huge market bloom in the country. Major role of the growth of the market depends on the supply of module at the lowest prices leading to competitive environment in the industry. Chinese suppliers dominating the solar module market in India as well as globally & continue to lead rankings. It should be noted that there has been remarkable addition of solar PV installations of 524.64GW globally as on 2018 and 25.21GW in India. The analysis has been carried by Gensol estimates the Global Solar Market is growing at Compound Annual Growth Rate (CAGR) of 37% YoY over a course of 19 years since 2000; which is quite bright number and expected to reach 1000 GW by 2026. However, looking into India’s CAGR of 60% YoY for same period, double of growth of Global, indicating huge solar demand in Country and is estimated to reach 100GW before 2023, if all goes as per the current trend. Graph 1 Global & India Solar PV Installations & Forecast (GW) 2. PROJECT COST TREND –GLOBAL Global increasing demand of solar PV systems has steered steep fall in overall project cost of PV systems. Studied carried out by NREL shows average of decline 30% since 2010 to 2018. 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 0.0 200.0 400.0 600.0 800.0 1000.0 1200.0 1400.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019P 2020P 2021P 2022P 2023P 2024P 2025P 2026P Global & India Solar PV Installations & Forecast (GW) Global Installed Capacity (GW) India Installed Capacity (GW)
- 3. Gensol Group Global Solar PV Project Cost Graph 2 NREL PV System Cost Benchmark Summary 2010-2018 Gensol from its vast experience of solar industry in India, has noted the significant drop in project cost. The cost from various executed solar PV projects has been plotted & Year on Year (YoY) comparison has been shown. The project cost has been also compared with Central Electricity Regulation Committee (CERC) benchmark cost. Indian Solar PV Project Cost Graph 3 Solar PV System Cost Trend Summary-India 2014-2019 9.68 8.42 7.55 8.32 8.25 8.24 8.21 8.24 8.23 6.85 6.84 6.10 8.12 7.78 7.65 7.78 7.80 7.72 7.43 7.29 5.60 5.60 7.69 7.73 7.78 7.10 6.66 6.40 6.48 6.48 6.03 5.6 4.50 4.78 0.00 2.00 4.00 6.00 8.00 10.00 12.00 GJ TS PB UP AP AP AP AP AP TS AP BR BR TS TS TS TS TS TN KA PB PB TS TS TS TS UP GJ MH MH OD RJ RJ MH Solar PV Project Cost Trend (INR in Crores/MW) Project Cost/MW CERC Benchmark Cost/MW FY 15-16 FY 16-17 FY 17-18 FY 18-19FY 14-15
- 4. Gensol Group We have evaluated a sharp declination of 50% in the project cost since last 5 years in India. There are key market & technology developments in Balance of System (BoS) like inverter, modules, Installation labor costs, cables (AC/DC), evacuation etc. 3. SOLAR PV PRICE TREND Knowing the fact that, solar PV modules are accounting 60% of the overall project cost, there has been reduction in solar PV modules since 2014 right from solar cell manufacturing. Module price trend has been declined with the increased solar PV demand & competition among the industry. The trend has been studied for the modules supplied from South East Asia especially China to India from September 2013 to January 2019. The maximum module price of 74.67 Cents was observed in March 2014 and minimum module price 19.90 Cents in January 2019 with average module price of 48.60 Cents. The module prices are precipitously fallen down by 71.34% from Sept 2013 to January 2019. The CAGR of module prices have been estimated to be -14.78% YoY basis. Graph 4 Module Price Trend & Forecast 2013-2026 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 2013 2014 2015 2016 2017 2018 2019P 2020P 2021P 2022P 2023P 2024P 2025P 2026P Module Price Trend & Forecast (2013-2026) India Installed Capacity (GW) Module Price Trend in Cents PredictedCurrent Trend
- 5. Gensol Group Considering the similar price trend, the module prices have been further forecasted on the basis of CAGR -14.78% YoY evaluated. If the trend continues, the prices are expected to fall down to approximately 8.0 cents by 2026. However, the analysis has been done on quarterly basis (Q1, Q2, Q3, and Q4) on yearly basis to see impact of demand and supply of ratio on PV modules in past 5 years. The analysis shows the change in price trend of modules on quarterly basis and it can be analyzed that the quarterly fluctuations are continuous. Looking into the overall scenario, the module prices increased in Q4 2016 by 3.3% due to sudden increase in demand. Although, Q3 2017 was most favorable as module prices fallen by 16.7% (36.53 Cents to 30.46 Cents) due to adequate supply of modules and production of silicon wafers. Again, Q3 2018 was noted as big bumper for solar market with least declination of 4.6% (25.12 Cents to 22.36 Cents) in price with respect to Q2 2018. Graph 5 Quarterly Variation in Module Price Trend YoY in % There are several reasons investigated for slow down Q3 2018 irrespective of huge solar tenders or demand in country like currency fell upto INR 73 rupees against Dollar price, cancellation of auctions & tenders and renegotiations in Power Purchase Agreement (PPA) due to lower bid tariffs, Antidumping Duty, Goods and Service Tax (GST) of 5% on solar PV modules and 18% on supply of equipment and infrastructure approval delays from Government authority. -0.83% -8.32% 1.16% -3.24% -8.59% -13.08% 0.7% -11.5% -4.2% -12.9% -7.6% -11.0% 4.6% -9.3% 2.8% -8.2% -16.7% -4.9% -3.1% 3.2% 1.0% 3.3% -5.1% -6.0% 2013 2014 2015 2016 2017 2018 Quaterly Module Price Change % Change in Price (Q1-Q2) % Change in Price (Q2-Q3) % Change in Price (Q3-Q4) % Change in Price (Q4-Q1)
- 6. Gensol Group The biggest factor was imposition of the Safeguard Duty from 30th July 2018 of 25% for the 1st year and 20% for period of 6 months and 15% for next 6 months of 2nd year on imported solar modules from China and Malaysia to promote Domestic Content Requirement (DCR) category module. Graph 6 Solar Tender Summary 2017 Vs & 2018 We can clearly see that 12 GW of projects tendered (including 4 GW of tenders were cancelled), of which, only 3.4GW (28%) projects are auctioned. Hence, implication of new policies, taxes, market, or any other reasons have high influence on solar industry. Tendered 46% Auctioned 38% Cancelled 16% Solar Tender Summary 2017 Tendered 52%Auctioned 22% Cancelled 26% Solar Tender Summary July 2018 Onwards