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					</table>The sharp rise in key commodity prices, coupled with a weaker rupee, policy uncertainty, and geopolitical disruptions, is intensifying cost pressures across India’s solar value chain in 2026. Higher input costs are squeezing manufacturers&#8217; margins, while rising module and equipment prices are beginning to weigh on project economics for developers.
At the same time, the mismatch between India&#8217;s large module manufacturing base and comparatively limited domestic cell capacity is creating another layer of pricing and procurement pressure.
Pricier Raw Materials, Weakening Rupee  
Solar cell and module production costs have come under increasing pressure in 2026 as prices of silver, aluminum, copper, and other critical raw materials rose. Silver, a key component of solar cell metallization paste, has emerged as one of the most significant cost pressures.
Pushpendra Samadhiya, Chief Revenue Officer at <a href="https://saatvikgroup.com/" target="_blank" rel="noopener">Saatvik Green Energy</a>, said, “The sustained increase in key commodity prices has been a significant cost driver for the solar industry. Silver has been the most pronounced contributor, with prices reaching a 52-week high of approximately $121.6/oz in January 2026, substantially above the previous year’s range. Prices of other key commodities such as copper have also risen by approximately 48% year-on-year (YoY), adding further pressure across the solar supply chain.”
“The current market dynamics are volatile but indicate upward cost pressure due to commodities and currency movements as well as unprecedented supply-demand dynamics,” Samadhiya added.
According to Dilip Mehta, Director, Technical Services, <a href="https://www.hexaclimate.com/" target="_blank" rel="noopener">Hexa Climate Solutions</a>, silver has been the single largest driver of prices across the solar value chain. “Silver paste now accounts for close to 30% of total cell production cost, against just 3% two years ago.”
He said cell costs alone have risen 25 to 30% because of this factor. Aluminum prices have risen roughly 20%, increasing frame and mounting structure costs, and copper is on a similar trajectory. For Q1, the module-to-project cost impact ranged between 8% and 12%.”
The depreciation of the Indian rupee against the U.S. dollar has compounded these pressures because several solar raw materials and components remain directly or indirectly linked to dollar-denominated prices.
“The rupee is currently around ₹95.7/$, approximately 10% weaker YoY, and has pushed the rupee cost of dollar-denominated inputs,” Samadhiya added.
“Since the war began in February, many of our orders have been tied to fixed-price contracts, making it impossible to immediately pass on the increase in input and currency costs. This situation compressed our margins during that period. The rapid movement from $88 to $95 added a 5–6% impact on costs, compounding the pressure on profitability,” Samadhiya noted.
Mehta noted that on a project with sizeable imported content, currency movements alone add 3% to 5% to the landed cost, independent of what the underlying commodity has added.
Developers with committed capital and signed PPAs are locking in supply now, because the downside of further escalation outweighs the cost of holding inventory. “Developers still finalizing financing are waiting, betting that silver corrects once substitution technologies scale. Neither approach is wrong, but the wait-and-watch group is taking on real execution risk if commissioning timelines are fixed,” Mehta said.
Avinash Hiranandani, Vice President and Managing Director at <a href="https://www.renewsysworld.com/" target="_blank" rel="noopener">RenewSys</a>, said copper and aluminum prices have also risen, contributing to higher module prices. As a result, the module bill of materials (BoM) cost has gone up by 20%.
Industry stakeholders expect Chinese cell prices to remain volatile rather than follow a sustained downward trajectory.
Until commodity prices, exchange rates, and domestic cell supply stabilize, these pressures could continue to weigh on manufacturer profitability, project internal rates of return, procurement strategies, and investment decisions.

Soaring Input Costs, Weak Rupee Cast Shadow on Solar Project Economics

Renewable energy company Suzlon Energy Limited has disclosed an outstanding debt of ₹127.85 billion (~$1.8 billion), according to the company’s Bombay Stock Exchange (BSE) filing.
The company has filed the disclosure of defaults on payment of interest, repayment of principal amount on loans from banks and financial institutions in the filing.
The outstanding debt towards various lenders is inclusive of interest calculated by the company up to December 31, 2019.
The loans were given by a consortium of 18 banks led by the State Bank of India (SBI) along with the Indian Renewable Energy Development Agency (IREDA).
The company took secured the loans for its subsidiaries, namely, Suzlon Global Services Limited, Suzlon Gujarat Wind Park Limited, Suzlon Generators Limited, and Suzlon Power Infrastructure Limited.
The company’s total default amount is to the tune of ₹72.56 billion (~$1.01 billion), where the principal amount is ₹67.17 billion (~$936.56 million) and interest is about ₹5.39 billion (~$75.13 million).
Mercom reached out to the company for further details, but the spokesperson chose not to comment at this juncture.
In November 2019, <a href="https://mercomindia.com/suzlon-net-loss-reaches-₹7-78-billion-q2-fy-2020/" target="_blank" rel="noopener noreferrer">Mercom</a> reported that Suzlon Group reported a net loss of ₹7.78 billion (~$108.6 million) in Q2 of the fiscal year 2019-20. It was up 64% from the same period last year when the net loss was ₹2.8 billion (~$39.08 billion). The pre-forex (foreign exchange) operating performance, earnings before interest, taxes, depreciation, and amortization (EBITDA) reflected a loss of ₹2.43 billion (~$33.92 million) in Q2 2020. The company had noted then that it had an annual market share of around 39% in India. It also added that as of March 31, 2019, it had a cumulative market share of about 35% and that it had approximately 12.5 GW of assets under management in the country.
The revenue of the company for Q1 FY20 <a href="https://mercomindia.com/suzlon-net-loss-billion-first-quarter/" target="_blank" rel="noopener noreferrer">came</a> to ₹8.33 billion (~$117 million). According to the company’s statement, it continues to witness a sectoral slowdown, owing to the prolonged industry transition to reverse auctions and policy uncertainty in a few states
In April 2019, Suzlon had <a href="https://mercomindia.com/suzlon-sells-solar-subsidiaries-renew/" target="_blank" rel="noopener noreferrer">announced</a> that it will sell two of its solar subsidiaries to Ostro Energy, a wholly-owned subsidiary of independent power producer, ReNew Power. The two subsidiaries are Shreyas Solarfarms Limited (Shreyas solar) and Aalok solar farms Limited (Aalok Solar).
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Image credit: Suzlon

Suzlon’s Outstanding Debt Reaches ₹127.85 Billion

The Rajasthan Electricity Regulatory Commission (<a href="http://rerc.rajasthan.gov.in/main.aspx" target="_blank" rel="noopener">RERC</a>) has issued new guidelines to amend its regulations concerning the terms and conditions for the determination of tariff for renewable sources-(biomass, biogas and biomass gasifier based power plants) that were passed in 2015.
These regulations will come into force from the date of their notification in the official gazette.
Key Highlights
<ul>
<li>Tariff norms according to these regulations will continue to remain applicable until notification of the revised rules.</li>
<li>RERC will determine project-specific tariff, on a case-to-case basis for biomass gasifier-based projects, biogas-based projects, municipal solid waste and refuse derived fuel-based projects with Rankine cycle technology.</li>
<li>A petition for the determination of project specific tariff must be accompanied by a fee determined by RERC.</li>
<li>Detailed project report outlining technical and operational details, site-specific aspects, the premise for capital cost and financing plan, details of installation, manufacturers/suppliers guaranteed and other technical particulars, recommended operation and maintenance practices and public safety requirements need to be submitted along with a petition for tariff determination.</li>
<li>If the equity deployed is more than 30 percent of the capital cost, equity that is more than 30 percent will be treated as a normative</li>
<li>If equity deployed is less than 30 percent of the capital cost, the actual equity will be considered for determination of tariff.</li>
<li>For determination of generic tariff, loan tenure of 13 years will be considered.</li>
<li>A depreciation rate of 5.28 percent per annum for the first 13 years will be considered, and remaining depreciation will be spread over the rest of the useful life of the project considering the salvage value of the project as 10 percent of project cost.</li>
<li>The normative return on equity (RoE) will be 14 percent.</li>
<li>Interest on working capital will be the interest rate equivalent to the normative interest rate of three hundred basis points above the average SBI MCLR (one-year tenor) prevalent during the last available six months for the determination of tariff.</li>
<li>The excess energy of each time block will be totaled until the end of the month and will be set off against the cumulative drawl of the distribution company’s energy in the same month.</li>
<li>For 10 percent of remaining excess injected energy, if any at the end of the month, the renewable energy developer will get the payment at the rate of 60 percent of energy charges applicable for large industrial power tariff, excluding fuel surcharge.</li>
<li>Unutilized banked energy, more than 10 percent will lapse.</li>
</ul>
<a href="https://mercomindia.com/rajasthan-draft-tariff-biomass-biogas/" target="_blank" rel="noopener">In January 2019</a>, the commission had issued draft terms and conditions for the determination of tariff for biomass, biogas, and biomass gasifier energy.

Rajasthan Amends Regulations for Tariff Determination of Biomass and Biogas Projects

The Gujarat Urja Vikas Nigam Limited (GUVNL) has issued Request for Selection (RfS) for the purchase of power from 500 MW grid connected solar photovoltaic power projects to be set up in Gujarat (Phase IV).
The capacity has been tendered in order to fulfill GUVNL’s renewable purchase obligation (RPO) and to meet the future requirements of state’s DISCOMs. A company can bid for a minimum capacity of 25 MW.
The last date for the bid submission is January 30, 2019. The technical bids will open on January 31, 2019. The date for the opening of the financial bid and reverse e-auction is February 6, 2019.
The GUVNL will enter into power purchase agreement (PPA) with the successful bidders for a period of 25 years from the scheduled commercial operation date of the project. The maximum tariff will be discovered through the e-bidding and e-reverse auction.
The bidders can avail fiscal incentives like accelerated depreciation, concessional customs and excise duties, tax holidays, benefits from trading of carbon credits, etc.
Projects under construction, which are not yet commissioned, or projects already commissioned but do not have any long-term PPA may be considered eligible  in case they are not already accepted under any other central or state schemes and do not have any obligations towards existing buyers.
Solar projects will also be allowed to be set up in the existing wind farm which is already connected to the grid.
To be eligible to bid for the project, the net-worth of the bidder should not be less than ₹10.7 million/MW (of the capacity quoted) on the date of financial year ending March 31, 2018.
<a href="https://mercomindia.com/aditya-birla-lowest-tariff-guvnls-500-mw-solar-auction/" target="_blank" rel="noopener">Earlier</a>, Aditya Birla Renewables quoted the lowest (L1) tariff of ₹2.44 (~$0.0338)/kWh in the auction held by <a href="http://www.gseb.com/guvnl/index.aspx" target="_blank" rel="noopener">GUVNL</a> for 500 MW of grid-connected solar projects.
<a href="https://mercomindia.com/guvnl-scraps-500-mw-solar-auction/" target="_blank" rel="noopener">In April 2018</a>, GUVNL had scrapped the auction for the development of  500 MW of grid-connected solar projects in the state. <a href="https://mercomindia.com/guvnl-500mw-solar-tender/" target="_blank" rel="noopener">In February 2018</a>, GUVNL had tendered 500 MW of grid-connected solar PV projects to be developed across Gujarat to meet its RPO.
Image credit: By Antalexion (Own work) [<a href="https://creativecommons.org/licenses/by-sa/4.0" target="_blank" rel="noopener">CC BY-SA 4.0</a>], via Wikimedia Commons

Gujarat Announces RfS for 500 MW of Solar Projects

Mercom India’s news team recently had the opportunity to speak with energy solutions provider <a href="http://www.goodwe.com/" target="_blank" rel="noopener">GoodWe</a>’s sales head for south and east Asia, James Hou. Hou shed some light on the evolving dynamics of the Indian solar market.
Here are the edited excerpts from the interview:
Why India, how is India’s business important to GoodWe?
Thanks to the technology development in recent years, solar energy is well accepted and applied globally with a reduction in cost of whole systems, especially with the falling price of PV modules. As one of the major PV markets, India installed close to 9.5 GW solar projects in last year and 2 GW solar capacity is expected  this year in the commercial and industrial markets. We also note that the idea of energy-saving and emissions-reduction is becoming popular in India, which can further support GoodWe’s business.
We are happy to see the rapid development of India’s PV industry. However, when many PV manufacturers flooding into India, a vicious price war between manufacturers has cut margins to the bone. This will disrupt the healthy development of PV industry as well as provide opportunities for low-cost inferior products.
We are focusing very much on big projects, either in the private or government sectors. Such projects would have a higher requirement for quality and service, which would differentiate us from many other players in the market. A very good sign is that EPCs/Developers nowadays tend to care more about the overall strengths of a supplier, instead of just looking at the price.
What products do you offer in India?
GoodWe can offer a comprehensive portfolio of products and solutions for residential, commercial and utility scale PV systems, ranging from 1.0 to 75 kW. GoodWe also provides energy storage solutions, which give customers control of their power, by giving them the choice and flexibility in how they use the electricity grid. By storing excess power during off-peak hours, when electricity costs are at their lowest, clean energy can be enjoyed during peak times while benefitting from a reduction in monthly costs. In addition, the battery storage system provides critical back-up power during grid outages or blackouts.
Which <a href="https://mercomindia.com/string-inverter-indian-solar-market/" target="_blank" rel="noopener">inverters are in</a> more demand and why?
Our MT Series string inverters (50-60kW) are the most popular for India’s C&amp;I solar market, which can be successfully deployed on large scale commercial rooftops and ground-mounted solar PV systems. This can help further reduce installation costs while its boosting its power function, which can provide a higher yield and a faster ROI.
What do you think of the <a href="https://mercomindia.com/rupee-depreciation-affects-solar-supply-chain-india/" target="_blank" rel="noopener">rupee depreciation</a> and how is it affecting business?
Yes, the rupee depreciation has brought greater pressure on the importers. But thanks to the continuous price reduction of components, especially solar panels, projects can still be managed at a satisfying profitability level. The increase of demand for solar energy and continuous government support have been leading the market in a very positive direction, which has made India a standout as one of the most thriving solar market around the globe.
How are policy changes in India affecting the market? 
We feel that the <a href="https://mercomindia.com/industry-challenges-bis-guidelines-solar-modules/" target="_blank" rel="noopener">BIS certification</a> could be a significant change.
What would you like our readers to know about GoodWe?
GoodWe is a leading, strategically-thinking enterprise which focuses on research and manufacturing of PV inverters and energy storage solutions. With an average monthly sales volume of 30,000 pieces in 2017, and 12 GW installed in more than 100 countries, GoodWe solar inverters have been largely used in residential, commercial rooftops, industrial and utility scale systems, ranging from 1.0 to 75 kW. GoodWe inverters offer reliable operation and excellent performance and are well recognized by customers worldwide.
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