Installing solar panels will be expensive: According to ICRA, the cost may increase by 20%, know the main reasons

A big shock news has come to the fore for common consumers and big solar project developers thinking of installing rooftop solar on their roofs. According to the latest report of leading credit rating agency ICRA, the cost of solar projects and panel installation may increase by up to 20 percent in the next 6 to 8 months. Manufacturing of solar energy equipment is becoming expensive due to the new import regulations of the government and rising prices of raw materials globally.

Mandatory rules for domestic solar cells are the main reason for increasing cost.

According to ICRA report, the biggest reason for the increase in cost is the use of domestically manufactured solar cells (Domestic Content Requirement) made mandatory by the Central Government. Earlier, Indian solar module manufacturers used cheap imported cells from China and other countries. However, under new rules implemented to promote domestic manufacturing, expensive domestic solar cells now have to be used. The cost of domestic cells is much higher than imported cells, which is directly increasing the prices of the end product i.e. solar panels.

Rise in prices of copper, aluminum and raw materials

There has also been a huge jump in the prices of metals used in making solar panels and its entire structure. Due to the ongoing geopolitical tensions in West Asia and disruptions in the global supply chain, the prices of copper, aluminum and steel have increased significantly. These metals are used extensively in solar panel mounting structures, cabling and inverters, directly increasing the installation cost of the overall project.

Impact on common consumers and rooftop solar

The increase in cost will not only impact commercial and utility-scale solar power plants, but will also put a burden on the pockets of consumers installing rooftop solar systems at the residential level. Despite government subsidy schemes like Pradhan Mantri Surya Ghar Muft Bijli Yojana, the base price of installation and panels charged by vendors may see an increase. Experts believe that for consumers who are planning to install solar panels, booking at current prices can prove to be more beneficial.