320:
381:; the wholesale cost of solar modules dropped approximately 70%. These pressures have demanded efficiencies throughout the construction chain, so total installed cost has also been strongly lowered. Adjusting for inflation, it cost $ 96 per watt for a solar module in the mid-1970s. Process improvements and a very large boost in production have brought that figure down 99 percent, to 68¢ per watt in February 2016, according to data from Bloomberg New Energy Finance. The downward move in pricing continues.
268:
38:
299:
484:(EPIA) calculated that PV would reach parity in many of the European countries by 2020, with costs declining to about half of those of 2010. However, this report was based on the prediction that prices would fall 36 to 51% between 2010 and 2020, a decrease that actually took place during the year the report was authored. The parity line was claimed to have been crossed in Australia in September 2011, and module prices have continued to fall since then.
69:
518:, Italy and Spain. As PV system prices declined it was inevitable that subsidies would end. "Solar power will be able to compete without subsidies against conventional power sources in half the world by 2015". In fact, recent evidence suggest that photovoltaic grid parity has already been reached in countries of the Mediterranean basin (Cyprus).
539:(CSP) will be even less expensive than PV, although this is suitable for industrial-scale projects only, and thus has to compete at wholesale pricing. One company stated in 2011 that CSP costs $ 0.12/kWh to produce in Australia, and expected this to drop to $ 0.06/kWh by 2015 due to improvements in technology and reductions in equipment
563:
Wind turbines reached grid parity in some areas of Europe in the mid-2000s, and in the US around the same time. Falling prices continue to drive the levelized cost down and it was suggested that it had reached general grid parity in Europe in 2010, and would reach the same point in the US around 2016
487:
Stanwell
Corporation, an electricity generator owned by the Queensland government made a loss in 2013 from its 4,000 MW of coal and gas fired generation. The company attributed this loss to the expansion of rooftop solar generation which reducing the price of electricity during the day, on some
178:
The price of electricity from the grid is complex. Most power sources in the developed world are generated in industrial scale plants developed by private or public consortia. The company providing the power and the company delivering that power to the customers are often separate entities who enter
449:
price of grid power, which includes all upstream additions like transmission fees, taxes, etc. In the example above, grid parity has been reached in Nagano. However, retail prices are generally higher than wholesale prices, so grid parity may not have been reached for the very same system installed
392:
The average retail price of solar cells as monitored by the
Solarbuzz group fell from $ 3.50/watt to $ 2.43/watt over the course of 2011, and a decline to prices below $ 2.00/watt seems inevitable. Solarbuzz tracks retail prices, which includes a large mark-up over wholesale prices, and systems are
444:
Deciding whether or not PV is at grid parity is more complex than other sources, due to a side-effect of one of its main advantages. Compared to most sources, like wind turbines or hydro dams, PV can scale successfully to systems as small as one panel or as large as millions. In the case of small
525:
For large-scale installations, prices below $ 1.00/watt are now common. In some locations, PV has reached grid parity, the cost at which it is competitive with coal or gas-fired generation. More generally, it is now evident that, given a carbon price of $ 50/ton, which would raise the price of
220:
connects to the grid on the distribution side (as opposed to the customer side). This means it competes with other large forms of industrial-scale power like hydro, nuclear or coal-fired plants, which are generally inexpensive forms of power. Additionally, the generator will be charged by the
530:
in 2011. Although some consolidation is likely in 2012, as firms try to restore profitability, strong growth seems likely to continue for the rest of the decade. Already, by one estimate, total investment in renewables for 2011 exceeded investment in carbon-based electricity generation.
479:
grid parity for solar in the 2016 to 2020 era, but due to rapid downward pricing changes, more recent calculations have forced dramatic reductions in time scale, and the suggestion that solar has already reached grid parity in a wide variety of locations. The
247:
In general terms, fuel prices continue to increase, while renewable energy sources continue to reduce in up-front costs. As a result, widespread grid parity for wind and solar were generally predicted for the time between 2015 and 2020.
555:
Grid parity also applies to wind power where it varies according to wind quality and existing distribution infrastructure. ExxonMobil predicted in 2011 that wind power real cost would approach parity with natural gas and coal without
432:), very conservative compared to worldwide prices, the LCOE = 5,000/29,675 ~= 17 cents per kWh. This is lower than the average Japanese residential rate of ~19.5 cents, which means that, in this simple case which skips the necessary
488:
days the price per MWh (usually $ 40–$ 50 Australian dollars) was almost zero. The
Australian Government and Bloomberg New Energy Finance forecast the production of energy by rooftop solar to rise sixfold between 2014 and 2024.
404:
Knowing the expected production allows the calculation of the LCOE. Modules are generally warranted for 25 years and suffer only minor degradation during that time, so all that is needed to predict the generation is the local
564:
due to an expected reduction in capital costs of about 12%. Nevertheless, a significant amount of the wind power resource in North
America remained above grid parity due to the long transmission distances involved. (see also
428:(kWh) of electricity a year. Over a 25-year lifetime, the system will produce about 29,675 kWh (not accounting for the small effects of system degradation, about 0.25% a year). If this system costs $ 5,000 to install (
393:
commonly installed by firms buying at the wholesale price. For this reason, total installation costs are commonly similar to the retail price of the panels alone. Recent total-systems installation costs are around $ 2500/kW
471:
These categories are ranked in terms of the price of power they displace; residential power is more expensive than commercial wholesale. Thus, it is expected that the 1st phase would be reached earlier than the 3rd phase.
369:
are the main consideration when tracking grid parity. A 2015 study shows price/kWh dropping by 10% per year since 1980, and predicts that solar could contribute 20% of total electricity consumption by 2030, whereas the
235:
It is also important to consider changes in grid pricing when determining whether or not a source is at parity. For instance, the introduction of time-of-use pricing and a general increase in power prices in
715:
481:
206:
at a much higher cost, perhaps five to six times. Depending on their billing policy, this might be billed to the customer at a flat rate combining the two rates the LDC pays, or alternately based on a
680:
648:
521:
Predictions that a power source becomes self-supporting when parity is reached appear to be coming true. According to many measures, PV is the fastest growing source of power in the world:
526:
coal-fired power by 5c/kWh, solar PV will be cost-competitive in most locations. The declining price of PV has been reflected in rapidly growing installations, totalling about 23
535:
The dramatic price reductions in the PV industry have caused a number of other power sources to become less interesting. Nevertheless, there remained the widespread belief that
454:
240:
during 2010 and 2011 has suddenly resulted in many forms of renewable energy reaching grid parity. A drop in power prices, as has happened in some locations due to the
1036:
362:
of grid power, the levelized cost can be calculated by dividing the original capital cost by the total amount of electricity produced over the system's lifetime.
958:
213:
As a result of these policies, the exact definition of "grid parity" varies not only from location to location, but customer to customer and even hour to hour.
708:
673:
622:
152:
or government support. It is widely believed that a wholesale shift in generation to these forms of energy will take place when they reach grid parity.
1126:
752:
1099:
Paris A. Fokaides; Angeliki Kylili (February 2014). "Towards grid parity in insular energy systems: The case of photovoltaics (PV) in Cyprus".
603:
378:
413:
319:
977:
148:
Reaching grid parity is considered to be the point at which an energy source becomes a contender for widespread development without
993:
389:
large-scale solar generated electricity sold in 2020 for just $ 0.01567 per kWh cheaper than any form of fossil-based electricity.
1006:
401:
or $ 3,250 in the UK. As of 2011, the capital cost of PV had fallen well below that of nuclear power and was set to fall further.
385:
California signed a wholesale purchase agreement in 2016 that secured solar power for 3.7 cents per kilowatt-hour. And in sunny
565:
167:, respectively. By January 2014, grid parity for solar PV systems had already been reached in at least nineteen countries.
1211:
1062:
939:
365:
As the LCOE of solar PV is dominated by the capital costs, and the capital costs by the panels, the wholesale prices of
377:
The price of electricity from these sources dropped about 25 times between 1990 and 2010. This rate of price reduction
955:
203:
1186:
1081:
1030:
1028:
897:
757:
OWID credits source data to: Nemet (2009); Farmer & Lafond (2016); International
Renewable Energy Agency (IRENA).
1151:
145:. Grid parity depends upon whether you are calculating from the point of view of a utility or of a retail consumer.
1171:
719:
1025:
170:
Wind power reached grid parity in some places in Europe in the mid 2000s, and has continued to reduce in price.
1206:
1191:
326:–stating that solar module prices have dropped about 20% for each doubling of installed capacity—defines the "
767:
626:
577:
347:
303:
1130:
744:
371:
851:
184:
160:
445:
systems, they can be installed at the customer's location. In this case the LCOE competes against the
183:
that sets a fixed rate for all of the power delivered by the plant. On the other end of the wire, the
834:
536:
17:
327:
180:
126:
925:
869:
785:
J. Doyne Farmer, François Lafond (2 November 2015). "How predictable is technological progress?".
195:
187:(LDC) charges rates that will cover their power purchases from the variety of producers they use.
497:
547:
predicted that LCOE of CSP and PV power would lower to $ 0.07–$ 0.12/kWh by 2020 in
California.
592:
398:
1162:
ExxonMobil
Corporation. "The Outlook for Energy: A View to 2030". Retrieved 16 February 2011.
515:
228:
placed on the customer's roof. In this case the system has to compete with the post-delivery
191:
410:
557:
511:
355:
241:
974:
221:
distribution operator to carry the power to the markets, adding to their levelized costs.
8:
999:
540:
433:
199:
73:
281:
Please help update this article to reflect recent events or newly available information.
190:
This relationship is not straightforward; for instance, an LDC may buy large amounts of
51:
Please help update this article to reflect recent events or newly available information.
812:
794:
343:
207:
816:
502:
Photovoltaics since early-2010s started to compete in some places without subsidies.
421:
130:
1108:
804:
709:"Solar Photovoltaics Competing in the Energy Sector—On the road to competitiveness"
323:
257:
164:
134:
122:
981:
962:
943:
808:
544:
417:
232:
price, which is generally much higher than the wholesale price at the same time.
1112:
1037:"Solar has won. Even if coal were free to burn, power stations couldn't compete"
870:"KAHRAMAA and Siraj Energy Sign Agreements for Al-Kharsaah Solar PV Power Plant"
582:
429:
359:
244:, can likewise render systems formerly at parity, to be no longer interesting.
936:
821:
License: cc. Note: Appendix F. A trend extrapolation of solar energy capacity.
506:
said that, as of 2012, unsubsidised solar power were already competitive with
1200:
598:
503:
425:
331:
975:
Levelized Cost of New
Generation Resources in the Annual Energy Outlook 2011
560:
and be cheaper than natural gas and coal with carbon sequestration by 2025.
224:
Solar has the advantage of scaling easily from systems as small as a single
1127:"Introduction to Concentrating Solar Power. Desertec-Australia.org website"
914:
587:
507:
351:
346:(PV). As PV systems do not use fuel and are largely maintenance-free, the
210:
policy that tries to more closely match input costs with customer prices.
339:
225:
138:
436:
calculation, PV had reached grid parity for residential users in Japan.
298:
406:
217:
142:
1152:
Cost and LCOE by
Generation Technology, 2009-2020, GTM Research, 2010
382:
366:
799:
527:
307:
156:
68:
149:
108:
Source: Deutsche Bank, as of
February 2015 (see file description)
1098:
915:
Bundesverband Solarwirtschaft Installation Cost of Photovoltaics
784:
641:
237:
835:"A review of solar photovoltaic levelized cost of electricity"
464:
2nd phase grid parity: industrial/transport/commercial sectors
737:
386:
279:. The reason given is: To many outdated short term forecasts.
129:(LCOE) that is less than or equal to the price of power from
461:
1st phase grid parity: residential grid-connected PV systems
379:
accelerated between late-2009 and mid-2011 due to oversupply
1007:"Stanwell blames solar for decline in fossil fuel baseload"
946:(mostly in Japanese, but has an English summary from p. 17)
745:"Solar (photovoltaic) panel prices vs. cumulative capacity"
155:
Germany was one of the first countries to reach parity for
453:
In order to encompass all of these possibilities, Japan's
852:"Musk vs. Buffett: The Billionaire Battle to Own the Sun"
768:"Swanson's Law and Making US Solar Scale Like Germany"
973:
Energy Information Administration, (November 2010).
841:, Volume 15 Issue 9 (December 2011), pp. 4470-4482
679:. Deutsche Bank Markets Research. 6 January 2014.
338:Grid parity is most commonly used in the field of
566:OpenEI Database for cost of electricity by source
133:. The term is most commonly used when discussing
1198:
937:Outline of the Roadmap PV2030+, NEDO, June 2009
930:
467:3rd phase grid parity: general power generation
674:"2014 Outlook: Let the Second Gold Rush Begin"
475:Predictions from the 2006 time-frame expected
96: Reached grid-parity only for peak prices
1060:
703:
701:
649:"Recent facts about photovoltaics in Germany"
103: U.S. states poised to reach grid-parity
1187:Solar Energy Is Now as Cheap as Fossil Fuels
895:
718:. September 2011. p. 18. Archived from
354:of the system. With the assumption that the
1172:"Onshore wind to reach grid parity by 2016"
1079:
625:. Renewable Energy Advisors. Archived from
350:(LCOE) is dominated almost entirely by the
833:K. Brankera, M.J.M. Pathaka, J.M. Pearce,
716:European Photovoltaic Industry Association
698:
482:European Photovoltaic Industry Association
342:, and most specifically when referring to
27:Matching the price of the electricity grid
1034:
798:
457:defines the grid parity in three phases:
1192:Solar as cheap as coal… why not cheaper?
926:How Much Do Solar Panels Cost in the UK?
891:
889:
887:
839:Renewable and Sustainable Energy Reviews
829:
827:
318:
297:
67:
994:"Solar industry celebrates grid parity"
755:from the original on 29 September 2023.
14:
1199:
1063:"China's visible solar power success"
884:
824:
686:from the original on 29 November 2014
82: Reached grid-parity before 2014
898:"The End of the Nuclear Renaissance"
261:
89: Reached grid-parity after 2014
31:
1145:
24:
439:
25:
1223:
1180:
1061:Mark Clifford (8 February 2012).
198:at a low fixed cost and then buy
1035:Parkinson, Giles (7 July 2014).
654:. Fraunhofer ISE. 7 January 2015
450:on the supply-side of the grid.
314:
266:
36:
1165:
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1119:
1092:
1080:Tim Keating (3 February 2012).
1073:
1054:
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967:
949:
919:
908:
896:John Quiggin (3 January 2012).
862:
491:
125:source can generate power at a
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778:
760:
666:
615:
251:
13:
1:
609:
578:Cost of electricity by source
550:
348:levelized cost of electricity
304:levelized cost of electricity
127:levelized cost of electricity
996:, ABC News, 7 September 2011
809:10.1016/j.respol.2015.11.001
258:Solar power § Economics
7:
1113:10.1016/j.enpol.2013.10.045
872:. Qatar General Electricity
571:
372:International Energy Agency
173:
10:
1228:
1212:Renewable energy economics
495:
255:
185:local distribution company
537:concentrating solar power
420:a one-kilowatt system in
275:This section needs to be
45:This article needs to be
604:Solar America Initiative
593:Ontario Green Energy Act
181:Power Purchase Agreement
1082:"Death to PV Subsidies"
498:Growth of photovoltaics
416:18 January 2012 at the
358:will be similar to the
1086:Renewable Energy World
623:"What Is Grid Parity?"
533:
374:predicts 16% by 2050.
335:
311:
202:only as required from
111:
1207:Renewable electricity
523:
496:Further information:
322:
301:
159:in 2011 and 2012 for
71:
558:carbon sequestration
242:late-2000s recession
131:the electricity grid
1011:reneweconomy.com.au
956:Gaining on the grid
774:. 24 November 2014.
725:on 26 February 2013
541:manufacturing costs
434:time value of money
344:solar photovoltaics
332:solar photovoltaics
204:natural gas peakers
161:utility-scale solar
1133:on 30 October 2010
980:2012-11-04 at the
961:2011-06-08 at the
942:2012-01-17 at the
749:OurWorldInData.org
424:will produce 1187
336:
312:
208:time-based pricing
123:alternative energy
112:
902:National Interest
422:Matsumoto, Nagano
296:
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137:sources, notably
121:) occurs when an
66:
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16:(Redirected from
1219:
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1129:. Archived from
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165:rooftop solar PV
135:renewable energy
110:
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76:around the world
74:solar PV systems
72:Grid parity for
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944:Wayback Machine
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868:
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787:Research Policy
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772:Greentech Media
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629:on 15 July 2017
621:
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612:
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553:
545:Greentech Media
500:
494:
442:
440:Reaching parity
418:Wayback Machine
409:. According to
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192:base load power
176:
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1181:External links
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1024:
1013:. October 2013
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793:(3): 647–665.
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302:Projection of
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324:Swanson's law
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315:Pricing solar
309:
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1135:. Retrieved
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1044:. Retrieved
1041:The Guardian
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631:. Retrieved
627:the original
617:
588:Net metering
562:
554:
534:
524:
520:
508:fossil fuels
501:
492:Rapid uptake
486:
476:
474:
470:
452:
446:
443:
430:$ 5 per watt
403:
391:
376:
364:
352:capital cost
337:
284:
276:
246:
234:
229:
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118:
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107:
54:
46:
29:
1107:: 223–228.
1067:MarketWatch
658:17 February
340:solar power
252:Solar power
226:solar panel
139:solar power
115:Grid parity
1201:Categories
1137:26 January
876:29 January
800:1502.05274
729:27 January
690:27 January
610:References
551:Wind power
407:insolation
367:PV modules
256:See also:
218:wind power
143:wind power
57:March 2017
817:154564641
383:Palo Alto
310:in Europe
150:subsidies
18:Solarbuzz
1046:26 March
1017:26 March
978:Archived
959:Archived
940:Archived
753:Archived
751:. 2023.
681:Archived
572:See also
414:Archived
308:solar PV
174:Overview
157:solar PV
633:27 June
411:PVWatts
399:Germany
277:updated
194:from a
179:into a
47:updated
815:
595:(2009)
516:Hawaii
477:retail
447:retail
238:Mexico
230:retail
101:
94:
87:
80:
813:S2CID
795:arXiv
723:(PDF)
712:(PDF)
684:(PDF)
677:(PDF)
652:(PDF)
512:India
387:Qatar
330:" of
1139:2011
1048:2015
1019:2015
878:2020
731:2017
692:2017
660:2015
635:2015
455:NEDO
306:for
163:and
141:and
117:(or
1109:doi
805:doi
568:).
510:in
397:in
1203::
1105:65
1103:.
1084:.
1065:.
1039:.
1027:^
1009:.
900:.
886:^
854:.
837:,
826:^
811:.
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789:.
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700:^
543:.
528:GW
514:,
1141:.
1115:.
1111::
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1069:.
1050:.
1021:.
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880:.
858:.
819:.
807::
797::
733:.
694:.
662:.
637:.
395:p
334:.
289:)
285:(
59:)
55:(
49:.
20:)
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