← All questionsGS3 · 2015 · Indian Economy ·Falling Solar Costs and Thermal Power
QUESTION 10
GS3
12.5 marks

To what factors can the recent dramatic fall in equipment cost and tariff of solar energy be attributed? What implications does the trend have for thermal power producers and related industry?

WRITE IN
9 min
200 words

What the examiner wants

Explain why solar costs and tariffs have dropped sharply and what this means for thermal power.

Attribute + ImplicationsAnswer exactly what the question asks.

Demand-wise check

  1. 1Factors: falling module prices (Chinese scale), better technology, cheaper finance, reverse auctions, solar parks with land and grid, policy support (JNNSM)≈35 words
  2. 2Thermal implications: low PLF, stranded assets, NPAs in power sector, shift to flexible/backup role≈35 words
  3. 3Industry: coal demand outlook, equipment makers (BHEL), jobs in coal regions - need just transition≈35 words
  4. 4Caveats: storage and grid integration costs, import dependence on modules≈35 words

Open in about 30 words and close in about 30.

Answer plan

Causes of fallImpact on thermal generatorsRelated industryCaveatsConclusion

Where marks usually go

  • Only causes, no implications
  • Ignoring intermittency and storage

Draw this

  • Line graph of solar tariff decline 2010-2017

Value addition

  • DataSolar tariffs fell from a CERC benchmark of Rs 17.91/kWh (2010-11) to an auction low of Rs 2.44/kWh at Bhadla in 2017.CERC; SECI/NTPC auction results
  • DataNon-fossil sources reached 50% of India's installed power capacity in 2025, five years ahead of the NDC target.Ministry of New and Renewable Energy, 2025

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