Indian solar firms stare at cost hikes as China cuts rebates on key components

Indian solar firms face potential cost increases as China reduces export rebates on key photovoltaic components from 13% to 9%, effective December 1, 2024. This reduction is part of China’s strategy to address overcapacity in its solar industry, which has led to lower global module prices. Indian developers, who have benefited from these lower prices, may now see project costs rise. The average cost of large-scale solar projects in India fell by 25% in the second quarter of 2024, but the rebate cut could reverse some of these gains. India relies heavily on imports for solar cells and modules, with China being a major supplier. The move could also enhance competitiveness for European component makers. India’s solar capacity includes 70 GW of modules and 8 GW of cells, with annual additions of 21 GW. The rebate cut may impact future projects, although ongoing projects are likely unaffected.