Posted with permission from Breaking Energy

India’s coal-power plant developers are reconsidering several projects after the plunge in the cost of solar panel improved the economic viability of renewable energy projects. After a series of federal auctions solar has become the cheapest source of electricity in India and the coal industry is suddenly struggling to make projects economically viable.

This sudden boom in the future of solar energy is preventing power distribution companies from making long term purchase agreements with convention power plants. Instead executives are making short term power purchase to fill the immediate needs of their customers and adopting a wait and see attitude.

This move into solar is a sharp departure from the India’s previous energy policy which had envisioned an expansion in coal power capacity. This approach would have exacerbated pollution problems in a country which is already home to half of the world’s 20 most polluted cities. Unfortunately, solar is not an immediate answer and coal is expected to remain an important part of India’s power production mix for years. However, the debate as to whether the future lies in coal or solar is one few people expected to be having a few years ago and solar appears to be winning.

According to a solar research firm, Bridge to India new capacity in solar is now 50% cheaper than new capacity in coal power. This while costs for coal are rising due to domestic supplies being exhausted and the cost of environmental regulations rising. Solar power production capacity has quadrupled since 2014 and this trend is expected to continue in the future. With such an exponential rate of growth and India expected to become the world’s third largest producer of solar power later this year. This being the case, it may be that coal has reached it’s high-point in India and from here it will begin a slow decline.