In India, the prices were also impacted by an estimated 55 per cent y-o-y drop in solar installations in FY19 to 4,569 MW which was only a quarter of planned target of 16,000 MW.
Despite the safeguard duty imposed on imports from China, Malaysia and the West, effective July 2018, solar panel prices continued to fall in the domestic market, as a 25 per cent year-on-year fall in global prices has more than offset the duty impact.
Though demand for the panels could look up in 2019, with a sharp cut in China’s installation target (down 60 per cent), supplies might still continue to outweigh demand keeping prices low through the year, analysts feel.
Panels constitute 60 per cent of the solar project cost; a precipitous fall in prices over the last five years has facilitated installation of 28,000 MW of solar capacity in India as of December 2018. Between 2013 and 2019, solar panel prices have fallen 71 per cent.
Factors driving the Indian solar market
Kunal Chandra, managing director of Proinso India, the Indian arm of the UK-based solar solutions provider, said to Financial Express that going ahead, some of the important events that will drive demand in the solar market would be a procurement drive in Europe, new solar policies in Latin American countries and new markets in Africa.
Also, the safeguard duty in India will come down from 25 per cent to 20 per cent from August. All these factors will have a positive impact on demand, but the panel prices will fall by another 5-6 per cent in FY20 as supplies will exceed the demand.
In India, the prices were also impacted by an estimated 55 per cent y-o-y drop in solar installations in FY19 to 4,569 MW which was only a quarter of planned target of 16,000 MW.
Though the ministry of new and renewable energy was on a tender issuance spree, the actual progress was much slower owing to multiple instances of tender under subscription and cancellations. Private sector response has dimmed owing to poor tender design, low tariff expectations and transmission sector bottlenecks.
