Solar prices across every market in India have been increasing recently, driven by a combination of rising demand, increasing component and module costs, and regulatory factors. Large-scale solar project costs went up by about 3% quarter-over-quarter and 1% year-over-year in early 2025, mainly due to a rise in prices for Indian-made DCR-compliant solar modules and higher costs for components like glass and aluminum frames. This was fueled by strong demand from government programs such as PM Surya Ghar and PM KUSUM.
The price hike is also linked to global industry trends, including consolidation of solar module manufacturing and production limits in China, which have pushed solar module prices to rise above $0.12/W. This threatens India’s low-cost solar advantage and could increase the cost of solar power bids.
While prices have risen modestly so far, 2025 is expected to see sharper increases due to higher demand from sectors like electric vehicles and large-scale solar capacity additions aimed at meeting India’s ambitious 2030 renewable targets. Module costs account for about 48% of total solar project costs, up from 47% last quarter, highlighting their significant impact on overall pricing.
Despite the rising costs, government subsidies and strong demand, especially under rooftop solar schemes, continue to support market growth, but utility-scale projects are seeing increased price resistance from state utilities unwilling to pay above certain tariff thresholds.
In summary, India’s solar market in 2025 is experiencing a broad increase in solar prices across all segments, reflecting global supply chain constraints, domestic regulatory impacts, and growing demand pressure, with module price rises being the most significant cost driver.
