The End of Cheap Solar: Why Waiting Until July 2026 Could Cost Your Business Crores
⭐ Executive Summary
For over a decade, industrial consumers benefited from a simple truth: solar prices kept falling. That era is over. A structural shift driven by global commodity inflation, China’s trade policy changes, and India’s upcoming ALMM enforcement has pushed solar project costs up by approximately 25% in the last year, with further increases expected through 2026.
Waiting even 3–4 months now erodes ROI, extends payback periods, and increases capex by crores. The message is clear: 2026 rewards action — not delay.
Silver Prices Have Exploded—And Solar Panels Depend on Silver
Silver is critical for every solar cell. Today, silver prices have tripled year-on-year, dramatically increasing module production costs.
- Earlier: Silver was ~4.5% of module cost
- Now: It has surged to 20–30%
- Manufacturers have fully passed on the increase. Result:leading to a structural long-term uptrend.
Indian Solar Manufacturers Have Already Raised Prices by ~25%
Module makers across India (e.g., RenewSys) have formally increased prices due to spikes in
- Silver
- Copper
- Polysilicon
- Aluminum
China’s Policy Changes Are Driving Up Prices Globally
China controls most of the world’s solar supply chain. Recently, it has:
- Cut export rebates
- Increased export prices across cells, modules, aluminum frames, and copper components
Impact to Indian buyers:
- Costs have increased by ₹0.12–₹0.28 per kWh
- Prices are rising even for Indian manufacturers dependent on imported upstream materials
ALMM Enforcement on Solar Cells Will Tighten Supply in India
From 1 June 2026, ALMM compliance becomes mandatory for solar cells. India’s annual demand is 90+ GW, while ALMM-listed domestic capacity is only ~13 GW.
This massive supply gap will push:
- DCR / ALMM module premiums sharply upward
- Project timelines into long queues
- Procurement risk to the highest level in a decade
NEW UPDATE: DCR vs NonDCR Module Price Gap Has Blown Up to ₹8/Wp
Earlier industry estimates suggested a DCR premium of ₹3–₹4/Wp. This is outdated.
According to fresh quotes received on 28th January 2026:
| Module Type | Current Price (₹/Wp) |
|---|---|
| Non-DCR | ₹17/Wp |
| DCR | ₹25/Wp |
This is a ₹8/Wp gap — double earlier expectations.
This means:
- A 1 MW project costs ₹8 lakh more due to the module category alone
- For most industrial buyers, DCR modules may become unavoidable post–June 2026
- As ALMM rules kick in, this price gap may widen further due to scarcity
This single factor alone increases payback by 4–6 months for a typical rooftop project.
Solar Prices Are Now in a Long-Term Uptrend
After hitting decade-low levels in 2024, module prices have:
- Rebounded 25–30%
- Broken the downward price cycle for the first time in 10+ years
- Stabilized at a higher floor due to commodity inflation, metal scarcity, and regulatory shifts
Projections indicate that post–June 2026, the price of panels alone will match the total project cost (panels + inverters + installation) of 2025.
Solar is still financially attractive — but rapidly becoming less so with every passing quarter.
What This Means for ROI: A Clear Case Study
Industrial Tariff Assumption: ₹8/kWh
Solar Generation: 1,500 kWh/year per kW
Cost Evolution of Solar Projects (Per kW)
| Period | Price per kW | % Increase | Impact |
|---|---|---|---|
| Past (Low Price Era) | ₹27,000 | — | Cheapest in 10 years |
| Now (Jan 2026) | ₹30,000 | +11% | Cost up ₹3,000/kW |
| Feb 2026 (New Rates) | ₹33,000 | +10% | Cost up ₹6,000/kW |
| July 2026 Projection | ₹40,500 | +50% | Cost up ₹13,500/kW |
Return on Investment & Payback Impact (1 MW System)
Key assumptions:
- Annual generation: 1.5 million units
- Annual savings: ₹1.2 crore
- No financing considered
| Metric | Jan 2026 (Current) | Feb 2026 (Next Week) | July 2026 (Projected) |
|---|---|---|---|
| Cost per kW | ₹30,000 | ₹33,000 | ₹40,500 |
| Project Cost (1 MW) | ₹3.00 Cr | ₹3.30 Cr | ₹4.05 Cr |
| Delay Penalty | — | + ₹30 Lakhs | + ₹1.05 Crores |
| ROI (Year 1) | 38.6% | 35.1% | 28.6% |
| Payback Period | 2 Years, 7 Months | 2 Years, 10 Months | 3 Years, 6 Months |
Summary of Lost Advantage
- Waiting until July 2026 adds 11 months to payback
- ROI drops from ~38.6% to ~28.6% per year
- Each month of delay forces power purchase at ₹8/kWh grid tariffs
For Industrial Clients, the Financial Logic Is Clear
✔️ Solar is still an excellent investment
Even at higher prices, payback periods under 4 years continue to outperform most industrial capex projects.
✔️ ROI deteriorates with every month of delay
The current price trend is upward — not downward. Waiting no longer delivers cost advantages.
✔️ Locking prices today protects long-term returns
- Lower upfront capital expenditure
- Improved payback period
- Faster company-wide energy savings
- Protection from policy-driven supply shortages
✔️ Delaying exposes you to
- Higher module prices
- Longer payback cycles
- ALMM-induced supply shortages
- Rising grid tariffs year-on-year
Strategic Conclusion for Business Owners, CEOs & CFOs
For the first time in a decade, solar rewards speed — not patience.
The market has flipped.
By acting now, industrial leaders can:
- Lock in ₹17/Wp non-DCR module prices
- Avoid the ₹25/Wp DCR pricing regime
- Preserve 2–3 year payback periods
- Prevent capex escalation of ₹30–40 lakh per MW
- Avoid ALMM-driven supply shocks
- Begin energy savings immediately
Delaying exposes companies to:
- Higher module costs
- Mandatory DCR pricing
- 1+ year longer payback cycles
- Increased regulatory risk
- Project execution and production delays
- Rising grid tariffs year-on-year
If your organization is serious about reducing energy costs and improving EBITDA through solar, February 2026 is the month to act — not the year to wait.
Critical Regulatory Update: ALMM Mandate & Project Timelines
All solar projects commissioned after 1st June 2026 must use cells and modules listed under the Approved List of Models and Manufacturers (ALMM).
- Typical construction timeline: 90–100 days
- Net-metering approvals: 30–45 days
- Minimum end-to-end execution time: 90 days (best case)
To ensure commissioning before the ALMM mandate, decision-makers should release Purchase Orders and payments by 15th February 2026, allowing a prudent 15-day buffer for unforeseen delays.
Acting within this window is essential to avoid regulatory hurdles and lock in current pricing advantages.
The data, pricing, and projections contained in this document reflect current market conditions and supplier quotations at the time of publication. These are subject to change based on commodity markets, supply chain constraints, government regulations, and project-specific factors.
This document does not constitute a binding offer or guarantee of performance. Final project pricing and timelines will be confirmed after detailed technical assessment and commercial evaluation.