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The solar industry is witnessing strong demand momentum alongside rising pressure from raw material costs | Photo Credit:
Solar power consumers may have to pay more for the installation of panels, wiring and other components such as inverters, as the prices of silver, copper and aluminium, the primary raw materials, have soared. However, it is unlikely to have any impact on solar power charges since the energy sector enjoys a huge cost advantage over the others. 
Silver prices have soared by one-and-a-half times in the past year and copper prices 40 per cent. Aluminium prices have increased by over 20 per cent during the period. Prices of metals in India are fixed based on the global market behaviour. 
“Over the past 8-9 months, this [hike in prices of key raw materials] has been impacting, especially on transformers, inverter duty transformer, cables, conductors. These are the affected items, and the impact is in the range of 3-15 per cent on end products,” said an executive of a solar power manufacturing firm, who did not wish to be identified.
Gujarat-based Kosol Energie Pvt Ltd, which has a 3.1 GW solar module manufacturing facility in Ahmedabad, is already feeling the impact of rising prices of silver, copper and aluminium. 
“In any solar project, solar modules make up about 50 per cent of the cost. So, when the prices of silver, copper or aluminium go up, the manufacturing cost of solar modules is bound to rise. In the last 5-6 months, the production costs of solar modules have risen by 8-10 per cent; the costs and prices are bound to increase by another 8-10 per cent as Chinese solar cell suppliers have increased prices over the last few weeks,” Kalpesh Kalthia, the company’s CMD, told businessline.
Vinay Thadani, Director & CEO of GREW Solar, said the solar industry is witnessing strong demand momentum alongside rising pressure from raw material costs. 
Solar photovoltaic (PV) modules rely on key metals such as silver, copper and aluminium, all of which have increased sharply in recent years. Silver, used in cell metallisation, has seen one of the steepest rises, significantly increasing cell input costs, he said. 
Copper, essential for electrical connectivity, has also moved up on the back of global electrification and renewable energy demand. Aluminium, used extensively in module frames and mounting structures, has added to overall module costs as prices remain elevated. “The cumulative impact of these increases has altered the industry’s cost structure, tightening margins for manufacturers,” said Thadani. 
Vinay Rustagi, Chief Business Officer, Premier Energies Ltd, said silver and aluminium are major inputs in solar module manufacturing. “But the negative impact of higher costs is being countered by improving technology and scale,” he said. 
A solar power distributor in Chennai said consumers have to pay more for copper cables from this month, though the exact hike has not been communicated yet.  Another agency said inverter prices are set to rise by 3-4 per cent. 
Atanu Mukherjee, CEO of Dastur Energy, a company that conceptualises, designs and develops clean energy transition and carbon management solutions, said: “Rising metal costs are compressing developer margins, rather than being passed through. We saw similar effects after ALMM enforcement and solar glass duties, which lifted tariffs by 10-30 paise/kWh in some tenders.”
Thadani said higher metal prices have put near term pressure on the margins of manufacturers, and have required closer cost control and sourcing efficiency. “Companies are working on improving yields and reducing wastage to manage these increases. For consumers, the impact has been more limited. There may be some movement in module prices,” he said. 
The solar company’s executive said the impact will only be on manufacturers. Most of them say that they are trying to replace it with some other commodity, but it that is not easy, as it is a tried and tested technology, he said.
Kosol Energie’s Kalthia said the margin pressure continues, and in certain cases, it has also led to cost overruns in the short term period. The company expects the prices to stabilise, going forward. In some cases,  the company has been forced to absorb the rising module costs.
Thadani said the industry expects some moderation in metal prices over the medium term as supply chains stabilise and global production capacities adjust. While short-term volatility may continue due to macroeconomic factors and geopolitical developments, the long-term outlook is more balanced. 
“Technological innovation is also playing a critical role, particularly in reducing silver consumption per watt and increasing material efficiency across modules. At the same time, increased recycling, alternative materials, and scale-driven efficiencies are helping decouple solar growth from raw material volatility,” he said. 
Rustagi said since solar power enjoys a huge cost advantage over other power generation technologies, the impact can be easily absorbed without affecting demand. 
“The Indian market is becoming more insulated from China, with various measures being taken by the government to localise manufacturing,” he said.
Kalthia said that currently, the solar module sector is witnessing overcapacity, and so, prices have continued to remain stable.  
Mukherjee said solar module manufacturers have found alternatives to counter the rising metal prices. “Manufacturers are reducing silver intensity through fine-line printing, multi-busbar designs, silver-coated copper pastes and copper electroplating, and through transitions to hetero junction and Tunned Oxide Passivated Contact technologies..
“On the aluminium side, lighter frames and alternative structural designs are being deployed. From a supply-chain perspective, companies are locking in longer-term procurement contracts, and governments are pursuing strategic sourcing, including India’s engagement with Chile and Peru for copper,” said Mukherjee.
With inputs from Avinash Nair, Ahmedabad; Rishi Ranjan Kala, New Delhi; Richa Mishra, Hyderabad; and Subramani Ra Mancombu, Chennai
Published on January 5, 2026
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