Large-scale solar project costs in India increased for the second consecutive quarter, according to Mercom’s  Q1 2025 India Solar Market Update, average project costs rose 3% quarter-over-quarter (QoQ) and 1% year-over-year (YoY).

The average selling price (ASP) of Indian-made DCR-compliant modules increased in Q1 2025, fueled by strong demand from government programs like PM Surya Ghar and PM KUSUM and rising component costs. With developers scrambling to secure limited production slots, pricing pressure increased further.

Meanwhile, non-DCR module prices declined slightly due to a correction following last quarter’s surge, primarily driven by anti-dumping duties on solar glass and aluminum frames.

Regulatory requirements, such as Approved List of Models and Manufacturers (ALMM) enlistment and Bureau of Indian Standards (BIS) compliance, are increasing manufacturers’ operational and certification costs, contributing to pricing pressure.

Solar modules accounted for about 48% of total project costs in Q1, up from 47% in the previous quarter.

Bulk discounts remain limited, and localized demand spikes are compounding cost pressures across the value chain.

Over 60% of the large-scale capacity commissioned in Q1 used domestic modules, the majority of which were ALMM-compliant. This shift played a key role in pushing up overall system costs.

ASPs for DCR complaint Indian monocrystalline PERC and TOPCon modules, both DCR-compliant, rose by 0.3% QoQ.

In contrast, solar inverter prices declined 0.5% in Q1, making up around 6% of overall project cost. The market is gradually moving from central inverters to string inverters as developers favor easier replacement and faster repair timelines.

The cost of mounting structures and other balance-of-system (BoS) components remained flat, accounting for roughly 9% and 2% of total system costs, respectively.

India added 6.7 GW of solar in Q1 2025, a 25% drop from the 9 GW installed during the same period last year and a 14% decline from Q4 2024. As of March 2025, India’s cumulative installed solar capacity stood at 104.6 GW.

Mercom’s Q1 2025 India Solar Market Update provides detailed insight into project costs, capacity additions, policy developments, and market shifts. For the complete report, visit https://www.mercomindia.com/product/q1-2025-india-solar-market-update