Dramatic cost declines in solar power tenders in India have shaken up expectations on pricing for the renewable fuel and have triggered warnings that the country's need for thermal coal imports will be much lower than some are banking on.

Huge solar power contracts awarded by Indian states to global players in November and December have been priced at levels more than 20 per cent below 12 months ago and point to solar power rapidly overtaking thermal coal imports in competitiveness for power generation.

Solar power appears to be rapidly overtaking thermal coal imports in competitiveness for power generation in India. Credit:Adam Ferguson

The figures signal that forecasts for growth in thethermal coal trading market by the International Energy Agency are too bullish even though they were cut back in December, according to Tim Buckley, director of energy finance studies at the Institute for Energy Economics and Financial Analysis, which supports renewable energy.

Mr Buckley said coal miners such as Adani and BHP Billiton were guilty of "ingrained thinking" in pressing ahead with coal expansion plans.