Solar Panel Costs May Increase Due to Market Volatility and Supply Chain Pressures
COIMBATORE: The renewable energy sector in India is facing potential headwinds as fluctuating metal prices and supply uncertainties could lead to a slight increase in the costs of solar panels, according to industry leaders. R Chellapan, whole-time director and vice-chairman of SWELECT Energy Systems Limited, highlighted these concerns during an industry roundtable held in Coimbatore on Thursday.
Key Factors Driving Price Hikes
Chellapan pointed out that the price of silver has surged significantly, directly contributing to higher panel manufacturing expenses. Additionally, countries from which India imports solar cells are phasing out export incentives, further squeezing margins. "The price of silver has shot up, resulting in an increase in the panel cost. Also, the countries we are currently importing cells from are removing the export incentives," he stated.
The roundtable was organized ahead of the 10th edition of RenewX 2026, scheduled to take place in Chennai from April 27 to 29, hosted by Informa Markets. Chellapan elaborated on the global market dynamics, noting that China dominates approximately 90% of the global solar cell market. However, China has progressively reduced its export incentives from 17% to just 3% over four phases, which is expected to drive cell prices up by an additional 6%.
Broader Economic Impacts
Further compounding the issue, a 5% appreciation in the US dollar is adding to the cost pressures. Chellapan estimated that end-users could face a total price hike of around 15% due to these combined factors. "This means the user is going to suffer a price hike to an extent of 15%. But this is a temporary phenomenon," he reassured, suggesting that the situation might stabilize over time.
Tamil Nadu's Leadership in Renewable Energy
On the sidelines of the event, Rajneesh Khattar, senior group director for energy and construction portfolio at Informa Markets India, emphasized Tamil Nadu's pioneering role in adopting clean energy. "Tamil Nadu has emerged as a pioneer in the adoption of clean energy and positioned itself at the forefront of India’s transition towards renewable sources," he told TOI.
Khattar highlighted the immense potential for investment in renewable energy over the next decade, driven by growing energy demands. He pointed out untapped opportunities in geothermal energy, given India's tropical location, and offshore energy along its coastlines. However, he noted that high operation and maintenance costs have hindered the adoption of offshore energy technologies, where European nations like France, Denmark, and Germany lead.
"The energy demand for the future is going to be huge. So renewable energy has a lot of scope for investment in the next 10 to 15 years," Khattar added, underscoring the long-term growth prospects despite current challenges.
