From Coal to Solar: How the Energy Transition Happened in 10 Years

Ten years ago, solar energy was expensive, niche, and heavily dependent on government subsidies. Today it's one of the cheapest energy sources ever developed, and coal has just been overtaken by renewables, driven largely by solar, in the global electricity mix for the first time on record.

The Numbers Tell the Story

Ten years ago, coal dominated global electricity. Today, that picture has changed completely. In the first half of 2025, renewables generated more electricity than coal globally for the first time in recorded history, reaching a 34.3% share compared to coal's 33.1%, according to energy think tank Ember.

In the US alone, wind and solar produced 17% of all electricity in 2024, surpassing coal at 15%, a fuel that had dominated over 50% of US generation in the mid-2000s. Coal's US output has fallen by more than two-thirds since its 2007 peak.

The economics explain the speed. Solar's cost of electricity fell by 97% between 2010 and 2025, according to BloombergNEF, making it the sharpest cost decline of any energy technology ever recorded. In practical terms, solar is now cheaper than coal in most of the world.

The Coal to Solar Transition: What Drove It

Three forces pushed coal out.

• First, solar became cheap fast. Manufacturing scale, improved panel efficiency, and competitive global supply chains collapsed costs year after year. Solar module prices fell 35% in 2024 alone, reaching under 9 cents per watt. In 2024, the world installed roughly 600 GW of new solar capacity, more than all other power sources combined.

• Second, policy support accelerated deployment. From the US Inflation Reduction Act to China's competitive renewable auctions, governments created the investment signals that drew hundreds of billions into clean energy infrastructure. By 2024, renewables attracted roughly ten times more global investment than fossil fuel electricity.

• Third, corporate demand shifted. Companies setting net zero targets (meaning they aim to balance any remaining emissions with carbon removals) started purchasing clean electricity at scale. Renewable Energy Certificates (RECs), tradeable proofs that electricity came from a renewable source, became a standard corporate procurement tool, adding demand pressure that accelerated coal retirements.

What This Means for Carbon

The coal to solar transition is reducing the carbon intensity (the amount of CO₂ emitted per unit of electricity generated) of power grids worldwide. That matters because electricity underpins almost everything: transport, heating, manufacturing, and increasingly, data centres.

But a cleaner grid alone will not reach net zero. Hard-to-abate sectors like steel, cement, and aviation cannot simply plug into a solar panel. That's where carbon markets become relevant. Companies with emissions they cannot yet eliminate often use carbon offsets (verified reductions from external climate projects) to compensate while pursuing longer-term decarbonization pathways, the structured plans companies build for eliminating emissions across their operations and supply chains. You can learn more about how these tools work in our guide to carbon offsets and corporate climate strategy.

Key Takeaway

The coal to solar transition is real, measurable, and accelerating. It has reshaped electricity markets on every continent in under a decade, driven not by idealism but by economics. The harder challenge is what comes next: electrifying the parts of the global economy that don't run on electricity yet, and building the carbon removal infrastructure for the emissions that cannot be eliminated at all. Both problems are where climate finance and carbon markets are increasingly focused.