The rise in prices of Chinese solar power modules, which grab the market majority in India, may put the future of several major solar projects in jeopardy.

A Mint report attributes the price rise to the Chinese continuing to the feed-in tariff system for the third quarter. This system fixes a price on the tariffs that developers receive, as opposed to the bidding system which is followed in India. Adding to that are the caps which the United States have imposed on cheaper Chinese solar module imports.

Module prices are currently placed at 32 cents per Watt, and are projected to increase at 34 cents a Watt. This will put several developers in a soup, who had taken up these projects under the assumption that the module prices will come to 23 cents a Watt.

It was this assumption that brought tariffs at an all-time low of Rs 2.44 per kilo Watt hour (kWh) at the Bhadla Solar Park in Rajasthan. Close to 500 mega Watts (MW) of Solar energy was auctioned to developers for production.

A rule of thumb in the solar industry is that modules account for 60 percent of the costs in solar power production. Mint quotes prices to have reduced by 26 percent in 2016 alone.

Consulting firm Bridge to India states that major market-share of solar modules is taken up by Trina Solar (25.7 percent), Hanwha (10.5 percent) and Risen (7.6 percent). Domestic manufacturers’ have a 10.6 percent share of the market.

India plans to generate 175 gigawatts (GW) of renewable energy by 2022. Of this, 100GW is to come from solar projects.

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