This question is part of the Super Big Solar Panel FAQ from Solar Mango, where expert answers to over 100 important questions on solar panels are provided.


Let us first look at the cost components to make a solar panel. The main raw material for a solar panel is the solar cell, so let’s start with the solar cell. If you look at the cost of a solar cell, you will immediately see that most solar cells are imported from China for the solar modules that are made here. So surely, the Chinese module makers have no advantage here.

But it is elsewhere that Chinese solar panel makers start getting a significant advantage.

The capital costs and raw material costs, and also the labour costs for Indian firms are on lines similar to Chinese – in fact, Indian labour costs are lower than those for Chinese – but the difference is that Chinese financing costs (interest rates) are really low compared to those in India. In India, to set up module making facilities, you will need to borrow at 12-13%, whereas in China companies could borrow at less than 5%, sometimes far lower than that!


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Besides, the Chinese government gives significant incentives – some transparent and some not so transparent – all of which result in a low cost for the end product – the solar panel. On the other, hand there are very few subsidies or other direct/indirect incentives available in India.

Whether you call the Chinese incentives and processes fair or otherwise, the end result is an economical solar panel for solar power developers in India and elsewhere.

In fact, the scepticism around Chinese incentives and regulations for their solar (cell and ) panel makers is what had prompted USA and EU to impose anti-dumping duties on solar cells and modules made in China.

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