India's Floating Solar Costs Stay High Despite Falling Panel Prices

Floating solar is having a moment in India. But the price tag is still a problem. According to a recent analysis by The Daily Brief by Zerodha, India pays more for floating solar than for ground-mounted installations, even as solar panel prices drop worldwide.

The reason isn't the panels. It's everything else.

Floating solar projects require special pontoons, anchors, and mooring systems to keep the panels afloat. Those components are often imported, adding to the cost. Then there's the installation. Working on water is trickier than working on land. You need barges, divers, and careful planning to avoid damaging the reservoir bed. All of that adds up.

Take the recent tender for a floating solar plant at the Getalsud dam in Jharkhand. The discovered tariff was around Rs 4.50 per unit, compared to Rs 2.50-3.00 for ground-mounted solar. That's a significant premium. Similar projects in Madhya Pradesh and Maharashtra show the same pattern.

Why pay more? Floating solar has advantages. It saves land, which is scarce and expensive. It reduces evaporation from reservoirs, a bonus for water-stressed regions. And the panels stay cooler on water, boosting efficiency slightly. For states with limited land but plenty of water bodies, it's an attractive option.

But the economics are still tough. Developers say the lack of a domestic supply chain for floating components is a key hurdle. Most pontoons come from Europe or China. That means import duties, shipping costs, and long lead times. Until local manufacturing scales up, prices will stay high.

There's also the question of O&M. Maintaining a floating plant is more complex than a ground-mounted one. You need boats, specialized crews, and corrosion-resistant equipment. Those costs add up over the 25-year life of a project.

Some states are trying to push costs down. Madhya Pradesh recently auctioned a 100 MW floating solar project at Omkareshwar dam. The tariff was competitive, but still higher than ground-mounted. The state hopes that larger projects will attract more bidders and drive prices lower.

Others are looking at hybrid models. Combining floating solar with hydropower can share infrastructure and reduce costs. The World Bank has funded such projects in India, including a 50 MW floating solar plant at the Rihand dam in Uttar Pradesh.

Still, the premium persists. A 2023 report by the National Institute of Solar Energy (NISE) noted that floating solar costs in India are 20-30% higher than ground-mounted. That gap hasn't narrowed much since.

For India to meet its renewable energy targets, floating solar will play a role. But it won't be the cheapest option. The government's push for domestic manufacturing of solar components could help, but it's focused mainly on panels and cells, not floating structures.

Until that changes, India will keep paying more for floating solar. The question is whether the benefits, land savings, water conservation, efficiency gains, are worth the extra cost. For now, developers and states are betting they are.