India’s largest coal producer Coal India Ltd has significantly accelerated its investment in solar energy this financial year, reporting a capital expenditure (capex) of ₹961 crore on solar projects by the end of January 2026 — surpassing both interim and full-year targets set for the segment. The development signals a notable pivot in a traditionally fossil-fuel-centred company, as it grapples with energy transition imperatives and the broader decarbonisation agenda shaping India’s power sector.
The ₹961 crore capex represents about 132 % of the progressive target of ₹729 crore laid down for the first ten months of the fiscal, and slightly exceeds the full-year solar expenditure goal of ₹957 crore. This reflects more than a 2.3-fold year-on-year increase compared to the ₹412 crore spent on solar initiatives during the same period last year.For a firm historically anchored in coal extraction, this pivot underscores an emerging recalibration of strategic priorities. Solar energy investments, though still a relatively small fraction of total capex, are rapidly gaining prominence as India intensifies efforts to curb carbon emissions and broaden its renewable energy footprint. Analysts see such moves as an effort to both future-proof revenue streams and align with national climate goals. Urban development stakeholders, especially in cities with rapid electrification and green infrastructure plans, view renewable capacity expansion as integral to long-term resilience and energy cost stability.
Coal India has set an ambitious target of installing 3,000 MW of solar capacity by FY 2028 as part of its net-zero strategy. As of December 2025, CIL and its subsidiaries had installed around 247 MW of renewable capacity, with plans to increase this to 675 MW by the end of the current financial year. Upcoming solar projects include a 100 MW installation in Patan and a 300 MW facility in Khavda, both in Gujarat.Beyond standalone projects, the company is exploring up to 2,000 MW of additional renewable capacity through joint ventures and subsidiary structures. Notable initiatives under consideration include solar capacity additions in partnership with state-owned power producers in Rajasthan and Uttar Pradesh, as well as bids for a 20 MW floating solar plant in Gorakhpur. Participation in tariff-based competitive bidding (TBCB) tenders and interest in battery energy storage systems further broaden the scope of Coal India’s renewable strategy.
The cost dynamics of solar deployment are also shifting. The current cost to set up 1 MW of solar capacity has dropped to ₹4–4.5 crore, down from ₹5.5–6 crore previously — making large-scale installations more economically viable and attractive even for companies with legacy fossil fuel portfolios.Yet challenges remain. Coal India’s core business continues to underpin India’s energy security, with coal still dominating power generation. Integrating renewables into its growth model will require sustained policy support, grid enhancements and careful capital allocation to balance legacy obligations with clean energy ambitions. Within India’s urban and industrial centres, where energy demand continues to expand, the success of such diversification efforts could shape how legacy energy firms contribute to the nation’s climate and sustainability goals in the decade ahead.
