Navigating Solar EPC Challenges in India

India’s solar energy sector is surging with new installations, but the EPC (Engineering, Procurement, and Construction) segment faces headwinds in the form of rising costs and supply chain bottlenecks. These challenges risk slowing down project execution and squeezing developer margins. Yet, they also present opportunities for innovation in project delivery and greater reliance on experienced turnkey EPC partners.

Rising Input Costs and Supply Chain Bottlenecks

One major challenge is rising input costs, especially for solar modules and key components. Domestic content requirements and trade measures have driven up module prices, adding pressure on project budgets. For instance, recent anti-dumping duties on imported solar glass (a critical module component) added roughly ₹450 (~$5.30) per panel – about ₹0.8–0.9 per watt – to module costs.In response, some manufacturers hiked module prices by ₹2–2.5/Wp, far above the actual cost impact. Solar developers have protested these sudden increases, noting that “rising input costs should affect only new orders, not those already in progress,” as one industry executive put it. Inflated module costs have cascading effects on the value chain – raising overall project expenses, eroding margins, and even reducing business for EPC contractors.

In tandem with cost pressures, module supply chain issues are testing the resilience of solar EPC projects. There is a limited supply of domestically made modules, and top manufacturers often prioritize large government-backed projects, leaving smaller developers and rooftop installers scrambling. In some cases, even leading brands have failed to deliver on time, preventing EPC vendors from fulfilling commitments and tarnishing project credibility. Such supply bottlenecks, coupled with policy shifts like the re-imposition of the ALMM (Approved List of Models and Manufacturers) for modules, mean EPC providers must navigate an unpredictable procurement landscape. Notably, by late 2024 over 65% of large-scale projects had to use ALMM-listed (Indian) modules, pushing costs slightly up after a period of decline.

Best Practices and Opportunities in Solar EPC

Despite these hurdles, the outlook for solar EPC in India remains bright and full of opportunities. India added 25.2 GW of solar capacity in 2024 alone – a 204% jump from the previous year– marking the highest annual installation ever. This boom in solar deployment underscores the critical role of efficient EPC delivery in achieving India’s renewable targets. Leading EPC players are responding by adopting best practices to ensure projects stay on track even in challenging conditions:

• Robust Risk Management: Top EPC companies employ advanced risk mitigation strategies – from hedging against price fluctuations to building buffer stocks – to cope with volatile input costs and supply delays. Proactive risk management (including weather and financial risk modeling) helps avoid costly overruns.

• Stakeholder Coordination & Compliance: Navigating regulatory approvals and coordinating multiple stakeholders (developers, contractors, financiers, and regulators) is essential. Clear communication and alignment across all parties help prevent delays due to permit issues or design changes. Seasoned EPC providers bring project management expertise to handle these complexities smoothly.

• Technology & Process Innovation: Embracing technology has become a best practice in solar EPC. Real-time monitoring and control systems (SCADA) are now standard for utility-scale projects, enabling immediate response to performance issues. Early integration of O&M (Operations & Maintenance) insights into the design and construction phases is another winning approach – it can reduce long-term maintenance costs by 15–20% over a project’s lifespan. Additionally, modular construction techniques and smarter supply chain logistics (like multi-sourcing critical components) are helping EPCs deliver faster and more reliably.

Crucially, these practices not only mitigate challenges but also improve overall project outcomes. They ensure that even as input prices fluctuate or modules are in short supply, solar plants are built on-time and on-budget. 

Every challenge is an opportunity for EPC providers to innovate – whether in securing alternative component suppliers, optimizing designs for available materials, or leveraging financial tools to buffer cost swings.

In a market as dynamic as India’s, the EPC firms that adapt and evolve will lead the way in delivering India’s ambitious solar capacity goals.

At Elanor Renewables & Power Pvt. Ltd., we recognize these industry challenges and have positioned ourselves as a turnkey EPC partner ready to ensure reliable solar project delivery. Our team brings end-to-end expertise – from precision engineering design through procurement and construction – to navigate the current headwinds in the solar sector. By leveraging strong relationships with module and equipment suppliers, we secure the best prices and availability for our clients even when the market is volatile. 

Our project managers emphasize rigorous planning, risk management, and quality control, so that each solar installation is resilient against delays or cost escalations.

Elanor’s approach incorporates the latest best practices: we use advanced monitoring and project management tools to keep installations on schedule, and we collaborate closely with O&M teams to optimize long-term performance of the plants we build. The result is bankable, high-performance solar assets delivered on schedule and within budget – a track record we are proud of.

Despite rising costs or supply chain hiccups in the broader market, our commitment to on-time, on-spec project delivery is unwavering. We act as a single-point EPC solution, taking full responsibility for engineering, procurement, and construction so that developers and investors can proceed with confidence. 

India’s drive for renewable energy calls for partners who can execute reliably at scale, and Elanor Renewables & Power stands ready to build the solar infrastructure that powers a sustainable future.

In these challenging yet exciting times for the solar EPC sector, having a dependable partner makes all the difference. If you’re looking to turn solar ambitions into reality, we’re here to make it happen – efficiently, transparently, and successfully. Together, we can surmount the cost and supply challenges and illuminate India’s path to a greener energy future. Contact us through messages or visit our site now!