Solar Power Overtakes Coal in Global Electricity Generation for the First Time in History

Solar power surpassed coal for the first time in history as a source of electricity generation globally during the second quarter of the year, according to International Energy Agency data, contributing 12.4% of global electricity compared to 12.1% for coal, in a shift officials described as a "pivotal turning point".

The pace of solar panel deployment accelerated remarkably this year, with China alone adding solar capacity equivalent to Germany's total additions over two decades, while India, South Korea, and Southeast Asian nations recorded record growth rates in installed capacity. Analysts attribute this acceleration mainly to a roughly 90% decline in solar panel costs over the past decade.

Regarding the impact of this shift on coal companies, stock prices of major U.S. coal companies dropped by more than 15% since the beginning of the year, while several coal-fired power plants in Europe and Asia announced timelines for early closure, amid rising regulatory pressure and declining economic viability.

Analysts believe that this historic shift will not eliminate the need for coal in the near term, particularly in developing economies that require reliable around-the-clock power; however, it reinforces the general trend making solar energy the most economically viable option for new projects.

What do these terms mean?

Installed capacity: The total installed electricity generation capacity from a specific source—such as saying "China added 300 GW of solar," meaning the amount it can generate at peak output, not what it actually generates.

Economic viability of power plants: A comparison between the operating cost of a power plant and its revenue from selling electricity—when costs exceed revenue, the plant is closed even if its operational lifespan has not ended.

Pivotal turning point in energy: The moment a new energy source surpasses its predecessor in a major indicator such as production volume or investment—historically, after this point, the transition accelerates significantly and irreversibly.