Average Cost of Large-Scale Solar Projects Fell 13% YoY in Q3

The slump in solar module prices contributed to the declining project costs


The average cost of large-scale solar power projects in India declined by 13.4% year-over-year (YoY) in the third quarter (Q3) of 2023 following the drop in module prices.

Large-scale solar system costs fell for the third quarter in a row. The average project costs decreased by 4.9% quarter over quarter (QoQ).

These findings were published in Mercom India Research’s recently released Q3 2023 India Solar Market Quarterly Update.

Average Large-Scale Solar System Cost Chart001

The lower system costs mean CAPEX savings and higher returns on investment for project developers.

The average selling price of Chinese mono PERC modules fell 29% QoQ and 52% YoY.

The MNRE suspended the Approved List of Models and Manufacturers (ALMM) order, allowing developers to import low-cost modules until March 31, 2024.

As the deadline approaches, developers have ramped up module procurement at cheaper prices from China and other Southeast Asian countries to commission projects on time.

India imported solar cells and modules totaling $1.2 billion (~₹101.6 billion) in Q3 2023, a 31% increase from $926.6 million (~₹76.6 billion) in Q2. Imports were up 208% YoY from $394 million (~₹32.5 billion).

Solar cells accounted for nearly 41% of the quarter’s imports compared to 55% in Q2 2023, whereas solar modules’ import share increased by 59% from 45%.

The prices of power conditioning units fell 3.8% QoQ. During the quarter, the industry gradually shifted towards central inverters over string inverters for their projects.

During Q3 2023, India’s capacity additions were down by over 34% YoY, with 1.9 GW installed, of which utility-scale installations accounted for over 1.4 GW, down nearly 43% YoY.

India’s cumulative installed solar capacity, including rooftop solar installations, surpassed 69 GW as of September 2023.

Mercom’s Q3 2023 India Solar Market Quarterly Update is 75 pages long and covers all facets of the Indian solar market and a detailed analysis of the project cost trends. For the complete report, visit https://www.mercomindia.com/product/q3-2023-india-solar-market-update