Leading Solar Developer Warns Of Disruption In Prices As Chinese Firms Struggle With Supply Chain Issues

This view, from a leading Indian developer that requested not to be named, is a critical input to give readers a perspective on just how much higher risks and volatility in solar could be in 2026. Coming at a time when the ALCM is due to kick in by 2026, the odds of prices rising even higher than expected are more than just favourable. Here's hoping the government is keeping an eye out too, or the newfound momentum and pace of solar additions could run up against a wall as early as the end of H1, one fears.  Keep in mind that the same set of risks exists in storage as well, especially the withdrawal of export incentives on storage exports in China applies as well. All in all, much to think and plan for. The note below, reproduced as it is. 

India’s Solar Sector Feels the Heat as Global Supply Chains Tighten

India’s solar industry is going through an unusually turbulent phase. In just a few weeks, the cost economics of manufacturing and building solar projects have shifted sharply, unsettling prices across the entire value chain—from raw materials like polysilicon and silver to cells and finished modules.

Multiple Pressure Points On Prices  Globally

Much of the pressure is coming from overseas. Globally, consolidation in polysilicon manufacturing has squeezed supply at the very top of the chain. At the same time, a steep rise in silver prices has pushed up the cost of solar cells, which rely heavily on the metal. Adding to this is the weakening of the US dollar against the Chinese renminbi, making exports from China more expensive at a time when the country remains the world’s primary supplier of solar components. Matters have been made worse by sudden capacity quota restrictions imposed by Chinese manufacturers, which have tightened spot market availability almost overnight. There is almost a 60% increase in the solar cell rate in the past one month. 

A key trigger behind the recent price surge has been a policy change in China. From April 1, the rollback of a 9% VAT refund for solar manufacturers has set off a scramble among global buyers to secure supplies ahead of the deadline. This rush has created a sharp demand spike, driving global solar module prices further.

Impact On India 

The ripple effects are now clearly visible in India. Domestic module manufacturers, who still rely heavily on imported cells and silver, have raised module prices by as much as ₹20 lakh per MW. In many cases, price quotes are being kept valid for just a single day—a clear sign of how volatile and unpredictable input costs have become. Industry executives point out that Chinese suppliers of silver and solar cells have increased prices three times in the last six weeks alone, leaving Indian manufacturers with little room to commit to long-term pricing.

For developers, EPC contractors, and investors, this volatility is creating immediate challenges. This is happening even as India’s long-term solar demand remains strong, backed by policy stability and ambitious decarbonisation targets.

The situation is not limited to India. A large Middle East–based developer recently noted that Chinese suppliers raised module prices by as much as 43% in a single week for projects in Saudi Arabia, underscoring the global nature of the disruption.
Industry stakeholders warn that unless supply-side stability returns—or India rapidly scales up domestic wafer, silver, and cell manufacturing—pricing pressures could persist in the near term. The current episode serves as a stark reminder that while India’s solar ambitions are firmly on track, reducing dependence on volatile global supply chains is no longer optional, but essential.Ends. 

Note: While these are well made points from a firm much more closer to the ground than we are, we believe many Chinese firms,facing a situation of overcapacity will not cut output even as margins shrink. That provides a window of relative stability before even these firms capitulate possibly. Most global research firms have predicted a contraction in China linked to tighter margins for renewable developers in 2026. In some case, the drop over 2025 has been predicted to be as high as 75-100 GW. If that plays out, there is no way global markets can absorb such an excess, and will in turn place more downward on prices possibly in the short term.