Average Cost to Develop Large-Scale Solar Projects Up by 21.6% YoY in Q4 2021

Project costs are estimated to increase further as BCD takes effect in April 2022


The average cost of large-scale solar projects in the fourth quarter of 2021 (Q4 2021) was approximately ₹43 million (~$566,008)/MW, according to Mercom’s recently released 2021 Q4 and Annual India Solar Market Update.

The average cost increased by 21.6% compared to the same period last year when it was ₹35.3 million (~$488,255)/MW and a 1% rise from the previous quarter when the cost was about ₹4.24 million (~$559,828)/MW.

The report attributes the rise in the average cost of projects in 2021 to the higher goods and services tax (GST) and component prices triggered by supply chain disruptions. Project costs are estimated to increase further as BCD comes into effect in April 2022.

The project costs varied between ₹4.03 Cr (~$0.508 million)/MW and ₹4.39 Cr (~$0.576 million)/MW, depending on the type of module used.

Q4 2021 Average Large-scale Solar Project Cost per MW

The Chinese polycrystalline module ASPs in 2021 recorded the highest rise in recent history, with a 35% increase YoY.

According to the report, the average selling price (ASP) of polycrystalline modules from China increased by 10% compared to the previous quarter. In contrast, the ASP of Chinese mono PERC modules increased by 1% compared to Q3.

The prices of Chinese modules have increased for seven sequential quarters, a trend that has never been seen in the past ten years. Module prices had only seen an upward trend in just two quarters before the pandemic in the past five years. Solar module manufacturers also believe that prices of Chinese modules are expected to stay high through Q1 2022.

Prices of the Indian modules also increased. The ASP of the Indian polycrystalline modules increased by 3%, and the Indian mono PERC module ASP increased by 1%, compared to the previous quarter.

The report notes that the rise in module ASPs resulted from higher prices of freight, polysilicon, EVA, back sheets, aluminum framers, and solar glass.

According to the report, India added 10 GW of solar capacity in the calendar year (CY) 2021, a 210% increase year-over-year (YoY), compared to 3.2 GW installed in CY 2020. Large-scale solar projects accounted for 83% of installations with 8.3 GW and saw a 230% increase YoY during CY 2021.

Mercom’s India Solar Q4 & Annual 2021 report covers all facets of India’s solar market. For the complete report, visit: https://mercomindia.com/product/q4-2021-india-solar-market-update