Prices of solar equipment have started to show a declining trend with even the cost of supporting components reducing over the past three-four months, Tata Power Company (Tata Power) CEO & Managing Director Praveer Sinha said on October 28.
Sinha, in an interaction with reporters on the sidelines of announcing Tata Power’s second-quarter performance, talked about the recent uptick in the cost of parts that go into manufacturing solar modules.
“Prices of solar equipment had increased in the last quarter. But, its costs have started coming down now. In the last three months, prices of imported solar panels have come down. We expect this will further reduce in the next three to six months,” Sinha said.
He added that the same declining trend is also now showing in the balance of plant (BOP) ecosystem, meaning the supporting components and auxiliary systems of a power plant. “Similarly, prices of balance of plant including steel, copper and aluminum had gone up in the last three-four months. In fact, their prices now have come down by nearly 25 percent,” he said.
“So, we have now been able to lock in many of the supplies at a much lower price and we expect that we will be able to execute our order book not only within the margin that we were expecting, but maybe a little higher than that also,” Sinha said.
Engineering, procurement and construction (EPC) in the solar energy sector has been hit by rising commodity prices which resulted in increased costs of solar manufacturing in the past few months forcing firms to put projects on hold or delay the upcoming ones.
Tata Power currently has an installed capacity of 3,870 MW and another 1,790 MW are under various stages of implementation. It has 625 MW large-scale renewable energy projects with a strong EPC order book of 3,799 MW worth Rs 15,261 crore.
On October 28, Tata Power declared a consolidated profit of Rs 935 crore, registering an on-year growth of 85 percent over a consolidated profit of Rs 506 crore last year.
On a sequential basis, the consolidated profit is marginally higher than the profit of Rs 884 crore earned by the company during the previous quarter ended June 2022.
The consolidated revenue from operations for the Tata group company rose 49 percent to Rs 14,031 crore from the revenues of Rs 9,810 crore registered during the same period last year. Sequentially, the consolidated revenues have declined three percent from Rs 14,495 crore recorded during the preceding quarter.
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