Q12.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 industries?

The dramatic fall in solar energy costs has significantly altered India's energy landscape, making renewables increasingly competitive.

• Technological advancements: Improved solar cell efficiency and streamlined manufacturing processes reduced production costs.
• Economies of scale: Mass production driven by increased global demand led to significant cost reductions.
• Supportive government policies: Subsidies, tax incentives, and competitive bidding mechanisms fostered investment and lowered tariffs.

• Reduced viability: Cheaper solar alternatives make new thermal projects less attractive, stressing existing ones.
• Asset underutilization: Lower Plant Load Factors (PLFs) and potential for stranded assets due to reduced demand.

• Coal mining: Decreased demand for coal as solar replaces thermal generation.
• Thermal power equipment manufacturing: Reduced orders necessitate diversification into renewable energy components.

This trend accelerates India's energy transition, challenging traditional power sectors but fostering a sustainable, diversified energy mix.