According to industry executives and analysts, the continued congestion of ships at Chinese ports has resulted in higher solar project costs in India. According to Animesh Damani, managing partner of renewable energy consultant Artha Energy Resources, the supply vacuum caused by the non-movement of consignments has influenced the already rising rate of solar module inflation. “This directly leads to an increase in the amount of working capital required, and we’re seeing an overall rise in project expenses of nearly 0.7 percent solely due to working capital,” Damani noted.
The Chinese port bottleneck, according to Ritu Lal, senior vice-president and head of institutional relations at Amplus Solar, a Gurugram-based distributed energy company, has generated ripple effects in the worldwide supply chain. “Congestion has harmed solar component shipments, particularly modules and solar cells, from India’s perspective.” Given India’s reliance on China for solar components, the delays caused by the traffic added to the country’s already high shipping costs following the pandemic… “Timelines for project completion were also harmed,” she added. Supply-side difficulties and shifting freight tariffs, according to Lal, will continue to be a worry in the short-to-medium term. However, if the Production-Linked Incentive program results in large domestic capacity for integrated end-to-end solar module production, India’s reliance on Chinese imports in this area will be significantly reduced in the future. According to Damani, there are a variety of reasons behind the current gridlock.
For starters, COVID-19-related closures and restrictions have resulted in a shortage of workers and equipment in Shanghai and Ningbo, two of China’s most important ports. When ships enter China, the crew is subjected to severe quarantine measures, compounding the difficulty and lengthening the lead time. Because of the power outage, there was a massive industry backlog, which resulted in many shipments being bundled together when the situation improved.
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