The heavily import-dependent solar industry has warded off any adverse impact of the falling rupee as the steep reduction in global module prices offset the cost increase attributable to the currency depreciation. During the past one year, the rupee has fallen by about 5% against the US dollar while the module prices were down by 33% to around 21 cents per watt. So, while solar cell imports recorded an increase of 25.7% in the first eleven months of FY19, the value of imports fell 40% year-on-year (to `12,050 crore) in the same period.
According to an analysis by Crisil, every 10% drop in the rupee, the cost of setting up a solar power plant increases by `30 lakh per MW, assuming other factors remain unchanged. Yet, bidders continue to remain aggressive, with the weighted average solar bid tariff in calendar year 2018 remaining at `2.73/unit (vs `3.01/unit in 2017 and `5.01/unit in 2016).
