China’s Longi Green Technology Co: suppliers were renegotiating contracts as prices of modules have surged 35% as the cost of polysilicon, glass and silver paste rose. Higher freight rates due to shortage of shipping capacity during the pandemic also fuelled hikes.
In this pandemic time, the Indian solar industry already declining & besides Chinese module makers (Chinese Vendors) want to renegotiate prices. That will pull down more to the Indian solar industry as the cost will increasing unexpectedly & which will harm the solar power producer financially.
The world’s biggest producer of solar cells, Longi Green Technology Co stated that suppliers were renegotiating contracts as prices of modules have surged 35% as the cost of polysilicon, glass and silver paste rose. Higher freight rates due to shortage of shipping capacity during the pandemic also fuelled hikes.
For more clarification of this statement, many trusted media reports said that Chinese suppliers unilaterally canceled contracts with Indian power producers. The problem is that Indian solar firms have bid and won projects from the Solar Energy Corporation of India quoting the lowest possible fixed tariffs.
In a solar project, Half of the entire cost goes to the solar module, & moreover, almost 80% of the Indian solar demand fulfills by Chinese export.
Renegotiation done by Chinese vendors is going to affect the projects to be commissioned between July 2021 and March next year. A senior executive at one of the largest renewable power producers in India said that he didn’t want to be identified out of business concerns. Lack of alternatives means the producers will have to take a hit on their margins. Chinese firms have increased prices by at least 15-20%.
The chief executive officer at the industry lobby National Solar Energy Federation of India, Mr. Subrahmanyam Pulipaka said, “the sudden surge in module prices has disrupted the Indian supply chain when local firms are already under pressure during the pandemic. While the association will soon approach the Ministry of New and Renewable Energy. Chinese vendors seeking higher prices have the potential to cause a big dent for the industry, which will be forced to pass on the burden to utilities and eventually to consumers.”
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