Solar Module Costs Jump Sharply, Putting Pressure on India’s Clean-Energy Plans

Rising module prices threaten project economics, tariffs, and India’s 2030 solar capacity targets

Written by: Supriya Kadu

Edited by: Rajan Mhatre

Last Updated: January 19, 2026

Summary: A spike in solar panel prices raises project costs and could lead to higher power tariffs nationwide.

India’s booming solar power sector is suddenly facing a fresh challenge: the price of solar modules has shot up sharply in recent weeks, threatening to raise costs for projects already under construction and even nudging future power tariffs higher.

Solar developers and manufacturers say this isn’t a seasonal blip — panel costs have climbed by roughly 30 per cent or more since late December, driven by rising prices of key materials like silver and aluminium, a softer rupee, and global supply tightness after China cut back on some solar component export incentives.

To put it in perspective, the price of photovoltaic cells — the heart of any solar panel — jumped from about 3.5 cents per watt to around 5.5 cents per watt in just a few weeks, industry insiders say. Since modules are built from these cells, the effect rippled through the supply chain.

That matters because India already has nearly 93 gigawatts (GW) of solar capacity under construction and about 136 GW installed, with national goals calling for 300 GW of solar by 2030 as part of a broader 500 GW non-fossil fuel target.

For developers racing to finish projects, higher module prices mean higher capital costs and the very real possibility that finalised tariffs in new power purchase agreements (PPAs) will come in above originally planned levels, reversing years of tariff deflation. Some manufacturers have already raised module prices by up to ₹20 lakh per megawatt (MW) compared with just weeks ago.

Manufacturers say the pressure comes partly from supply chain limitations overseas: despite India’s module manufacturing capacity exceeding 100 GW, the country still relies heavily on imported cells, wafers, and other upstream components. Restrictions on China’s output and reduced export rebates have created a scramble for supplies in global markets, putting upward pressure on prices.

At the same time, some industry voices argue the jump isn’t permanent. They point to patterns seen before — especially around the Chinese New Year — when production dips and logistics tighten temporarily, only for prices to calm down once factories restart in full.

Still, the timing is tough for projects without long-term power contracts or for developers locked into fixed-rate agreements that don’t allow tariff revisions for cost swings. With around 43 GW of renewable capacity reported to lack binding purchase deals, the risk of squeezed project returns has heightened.

The industry is now watching closely how prices behave in the coming months — whether this is a short-lived cost blip or a sign that India’s solar supply chain needs bigger structural changes to shield it from global volatility.