Question map
With reference to solar power production in India, consider the following statements : 1. India is the third largest in the world in the manufacture of silicon wafers used in photovoltaic units. 2. The solar power tariffs are determined by the Solar Energy Corporation of India. Which of the statements given above is/are correct ?
Explanation
The correct answer is option D - Neither statement 1 nor 2 is correct.
**Statement 1 is incorrect:** India has emerged as the third-largest solar module manufacturer globally (~3% share), following China (~90% share) and Vietnam (~5% share).[1] The statement claims India is third-largest in silicon wafer manufacturing, but the source clarifies India's position is in solar module manufacturing, not silicon wafer production. Silicon wafers and solar modules are different components in the solar value chain - wafers are upstream components while modules are downstream finished products.
**Statement 2 is incorrect:** Solar power tariffs in India are not directly "determined" or "set" by SECI. The lowest ever solar tariffs in India of Rs.2.44 per unit were registered in reverse auctions carried out by Solar Energy Corporation of India (SECI) in [2]May 2017. SECI conducts reverse auctions where bidders compete, and the market mechanism through competitive bidding determines the tariffs - SECI facilitates the process but doesn't unilaterally set the tariffs. The tariffs emerge from the competitive auction process, not administrative determination by SECI.
Therefore, both statements are incorrect, making option D the right answer.
Sources- [1] https://bsmedia.business-standard.com/_media/bs/data/market-reports/equity-brokertips/2025-09/17581877500.70194600.pdf
- [2] https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1555373
PROVENANCE & STUDY PATTERN
Full viewThis question is a classic 'Detail Trap'. It lures you with India's general success in Solar (high installed capacity) to fake a specific industrial achievement (wafer manufacturing). It also tests the fundamental administrative distinction between a 'Corporation' (business) and a 'Regulator' (pricing).
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: In the context of solar power production in India, is India the third-largest manufacturer in the world of silicon wafers used in photovoltaic units?
- Statement 2: In the context of solar power production in India, does the Solar Energy Corporation of India (SECI) determine or set solar power tariffs?
States India has only about 3 GW annual solar cell manufacturing capacity while annual demand is ~20 GW and the shortfall is met by imports mainly from China.
A student could infer that large reliance on imports makes it less likely India is a top global manufacturer of wafers and check global producer rankings or compare import volumes.
Outlines the full PV supply chain and notes silicon production and wafer manufacturing are more capital‑intensive than module assembly.
Knowing wafer production is capital‑intensive, a student could assess whether India's industrial capacity and investment (or lack thereof) match the scale needed to be a top-three wafer manufacturer.
Presents the claim as a multiple‑choice item, implying the statement is debatable and requires verification rather than assumed true.
A student could treat this as a prompt to seek corroborating production/ranking data from industry reports or trade statistics to resolve the question.
Gives examples of large domestic solar projects and programs, indicating strong domestic deployment demand which may outstrip local manufacturing.
A student could reason that high domestic deployment plus prior note of import reliance strengthens the case that India may not be a top wafer manufacturer despite large domestic usage.
- Directly states that reverse auctions carried out by SECI registered the lowest-ever solar tariffs, showing SECI runs auctions that establish tariff outcomes.
- Implicates SECI's active role in price discovery for solar power through auction processes.
- Explains SECI was converted/authorized to own solar plants and to generate and sell solar power, indicating it can participate in commercial pricing and procurement.
- Supports the idea that SECI is an implementing/commercial agency involved in transactions that influence tariffs.
- Notes SECI conducted multiple auctions (9 auctions), reinforcing that SECI organizes auction-based procurement which determines tariff bids.
- Shows SECI's operational role in the reverse auction mechanism used to set prices.
This snippet explicitly records the claim/question that 'The solar power tariffs are determined by the Solar Energy Corporation of India', showing the idea is circulating and is a point of examination.
A student could treat this as a hypothesis to verify by checking institutional roles (who is named in official tariff orders or policy documents).
The National Solar Mission excerpt emphasizes creating 'policy and regulatory regimes' for solar deployment, implying tariffs are part of broader regulatory/policy frameworks rather than solely an implementing agency's unilateral decision.
A student could use this to infer tariffs are likely tied to regulatory/policy bodies and then check which agencies (e.g., central/state regulators) make tariff determinations.
Discussion of National Solar Mission guidelines and contested local-content requirements shows the central government and international/trade bodies shape rules for solar projects, suggesting tariff-related rules may be influenced by policy and legal constraints beyond a single corporation.
A student could extend this by examining whether tariff-setting is part of government mission guidelines or handled by a separate statutory regulator.
Provides sample average power tariffs by source (including solar), indicating that tariffs are treated as a measurable, comparable category—often the output of market/regulatory processes rather than an internal number of one implementing agency.
A student could compare such published tariff averages with auction or regulatory orders to see who issues or fixes the observable tariff levels.
- [THE VERDICT]: Trap / Conceptual Bouncer. Source: Current Affairs (Renewable Energy Status Reports) + General Administrative Knowledge.
- [THE CONCEPTUAL TRIGGER]: Energy Infrastructure > Renewable Energy Value Chain & Institutional Framework.
- [THE HORIZONTAL EXPANSION]: 1. Solar Chain: Polysilicon → Ingots → Wafers → Cells → Modules (India is strong in Modules, zero in Wafers). 2. Top Wafer Makers: China (>95% share). 3. Tariff Mechanism: Discovered via Reverse Auction, adopted by CERC/SERC. 4. SECI: Implementing agency/Trader, not a Regulator. 5. CERC: Statutory body under Electricity Act 2003 that regulates tariffs.
- [THE STRATEGIC METACOGNITION]: When reading 'India is a leader in X sector', dissect the supply chain. Are we leaders in *consumption/installation* or *manufacturing*? Usually, India leads in deployment but lags in upstream high-tech manufacturing (Chips, Wafers, Lithium Cells).
The supply-chain stages (silicon → ingots → wafers → module assembly) are described in the references and are directly relevant to the claim about wafer manufacturing.
High-yield for questions on industrial structure of renewable-energy sectors; helps distinguish where value and technical/capital intensity lie (useful for policy, trade, and industry questions). Connects to topics on manufacturing policy, technology transfer, and capital intensity. Practice: map stages and state policy levers for each stage.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > Solar Photovoltaics Manufacturing in India > p. 450
References provide figures on India's solar-cell manufacturing capacity relative to domestic demand, highlighting shortfalls met by imports—a key context when assessing manufacturing ranks.
Crucial for questions on self-reliance, trade balance, and industrial policy in renewables. Shows why production rank claims must be checked against capacity and import data; useful for policy evaluation and solution-oriented answers (e.g., incentives, PLI schemes).
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > Solar Photovoltaics Manufacturing in India > p. 451
One reference states India has the third-largest installed solar capacity, which is a different metric than manufacturer ranking for wafers—this distinction is central to evaluating the statement.
Important exam skill: identify and differentiate metrics (installed capacity vs manufacturing output/exports). Prevents conflation of deployment statistics with industrial capability; applicable across energy, infrastructure, and economic geography questions.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > Solar Photovoltaics Manufacturing in India > p. 451
The National Solar Mission frames India's solar policy, emphasizing phased rollout and the creation of policy and regulatory regimes for solar deployment.
High-yield for UPSC: understanding the Mission's phased approach and its emphasis on policy/regulatory instruments helps answer questions on government strategy for renewables and implementation challenges. Connects to topics on energy policy, central-state roles, and program design; useful for questions on policy effectiveness and institutional mechanisms.
- Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 23: India and Climate Change > Objective > p. 302
The National Solar Mission's domestic content mandate and subsequent WTO disputes are directly mentioned, showing interaction between domestic renewable policy and international trade law.
Important for UPSC: illustrates how industrial policy (local content rules) can trigger trade disputes and legal consequences. Links energy policy with international institutions (WTO) and trade law; useful for questions on policy trade-offs, diplomacy, and compliance with international rules.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > CASE OF SOLAR PANELS UNDER NATIONAL SOLAR MISSION > p. 539
Evidence provides average tariff figures for solar generation, giving a benchmark for cost comparisons with other sources.
Practically useful: knowing approximate tariff levels for solar (and comparing them with wind, thermal, hydro) helps in policy analysis questions on competitiveness of renewables, subsidy needs, and planning. Connects to public finance, energy economics, and infrastructure planning topics.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 14: Infrastructure and Investment Models > Renewable Energy > p. 431
The next logical question is on 'Green Hydrogen' electrolyzers or 'Lithium-ion' batteries. Just like Solar, India has high targets but currently imports the core 'Cell' technology while assembling the 'Battery Packs'. Watch for PLI schemes in ACC Battery Storage.
Apply the 'Name-Function Mismatch' hack. Statement 2 says a 'Corporation' (SECI) determines tariffs. In Indian governance, 'Corporations' do business/implementation, while 'Commissions' (CERC, SERC) or 'Authorities' regulate prices. A player cannot be the referee. Thus, S2 is likely false.
Mains GS-3 (Energy Security) & GS-2 (IR): India's dependence on Chinese silicon wafers (90%+) is a strategic vulnerability, similar to semiconductor dependence. This links to the 'China Plus One' strategy and the rationale behind the PLI (Production Linked Incentive) schemes.