Increased cost of solar modules and steel combined with higher logistics cost will impact 5 giga watt solar capacity under implementation in the private sector, Crisil Ratings said on Wednesday. In a statement, the ratings agency said: “A sharp increase in the prices of solar modules and commodities such as steel, together with rising freight costs, will pull down the Return On Equity (ROE) of nearly a fifth of the 25 GW private solar capacity. This capacity of 5 GW was mostly bid out between October 2020 and December 2021 and is currently under implementation.”<\/p>\n
The projects totalling 5 GW were bid at relatively low tariffs of less than Rs 2.35 per kilowatt hour (kWh) at a time when module prices were softening and commodity prices benign. These projects may see their ROE falling by as much as 140-180 basis points to around 7 per cent, it said.<\/p>\n
In the statement, Manish Gupta, Senior Director,CRISIL Ratings, said: “The remaining 20 GW capacity projects will also be hit, but their comparatively higher tariffs and partial cover on cost of modules will limit the impact to 60-80 basis points. Most of these projects are in advanced stages of implementation and have imported or tied up some proportion of modules at prices below the current level.”<\/p>\n
According to the statement, solar modules contribute in the range of 55-60 per cent to the cost of a solar project, and prices of the same have increased 40 per cent from January last year to March 2022.<\/p>\n
Steel contributes 5-10 per cent to the total cost of a solar project, while its rates have risen by 25 per cent during the said period.<\/p>\n","protected":false},"excerpt":{"rendered":"
Increased cost of solar modules and steel combined with higher logistics cost will impact 5 giga watt solar capacity under implementation in the private sector, Crisil Ratings said on Wednesday. In a statement, the ratings agency said: “A sharp increase in the prices of solar modules and commodities such as steel, together with rising freight costs, will pull down the Return On Equity (ROE) of nearly a fifth of the 25 GW private solar capacity. This capacity of 5 GW was mostly bid out between October 2020 and December 2021 and is currently under implementation.” The projects totalling 5 GW […]<\/p>\n","protected":false},"author":39,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[132],"tags":[],"class_list":["post-493817","post","type-post","status-publish","format-standard","hentry","category-power"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/493817","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/39"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=493817"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/493817\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=493817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=493817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=493817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}