Energy Transition

India's solar energy investments are higher than coal for the first time

India's solar energy investments

Solar energy investments in India has scaled in the past few years. Image: REUTERS/Amit Dave/Files

Charlotte Edmond
Senior Writer, Forum Agenda
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In India coal is king. It powers huge swathes of the country and its use is still rising. But there are signs that coal's dominance might one day be challenged. India's solar energy investments are now outpacing those in fossil fuels, according to a report by the International Energy Agency.

solar energy investments in India are increasing
Coal may have topped total fossil fuel-based power spending previously but India’s solar energy investments were able to exceed it last year. Image: IEA

Can India’s solar energy investments alone satisfy the country’s needs?

Total renewable power investments topped those in fossil fuel-based power for the third year in a row. And spending on solar photovoltaics (PV), supported by government auctions, exceeded coal for the first time last year. The falling costs of bringing solar power online as well as favourable government policies have seen solar’s star rise in recent years.

India’s solar energy investments alone can not satisfy the country’s hunger, coal still stands strong.
India’s solar energy investments alone can not satisfy the country’s hunger, coal still stands strong. Image: IEA

But that’s not to say the country’s hunger for coal is going away any time soon: it remains one of the world’s largest coal consumers. Supply-side solar energy investments grew last year, supported by a policy favouring domestic production ahead of imports – although the fuel was still one of the country’s largest imports last year.

At a time when other nations are curbing coal use, India is bucking the trend and the vast majority of the country is still powered by fossil fuels, mostly coal.

Though solar energy investments are on an all time high in India, coal still remains its largest power source
Though solar energy investments are on an all time high in India, coal still remains its largest power source Image: Inside Climate News
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India’s energy future

India is still a relatively modest energy consumer, particularly in comparison to the United States, but demand is set to climb rapidly as its population gets richer. The country`s share of global energy demand will double by 2040, oil and gas giant BP estimates. And almost half of this new demand will be met by coal.

Although investments in solar and wind energy will continue to mount, the continued reliance on coal means greenhouse gas emissions by India – already one of the world’s biggest CO2 emitters – will climb substantially.

India’s high solar energy investments helped the country rank among the top energy investors.
India’s high solar energy investments helped the country rank among the top energy investors. Image: IEA

Given its soaring demand for power, it is little surprise India was the fastest-growing investor in the energy sector last year, according to the IEA. Continuing to meet this demand will require serious investment.

The country spent more than $20 billion on its grid last year, and the Central Electricity Authority estimated an extra $40 billion of transmission spending – the cost of getting electricity from the power plant to the substation – would be needed in the next three years. That’s over half as much again as it is currently spending.

Prime Minister Narendra Modi announced massive solar energy investments in 2015, pledging to surpass targets in the Paris climate agreement. But there is no getting away from the fact that coal is perceived as a cheap source of energy to feed Indians’ increasing demand for power.

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Related topics:
Energy TransitionClimate ActionNature and BiodiversityGeographies in Depth
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