News & Analysis
Analyst: Solar approaching grid parity in U.S.
Dylan McGrath
7/13/2009 3:22 PM EDT
Speaking to a packed ballroom at the Intersolar North America event here, Bradford said the combination of falling photovoltaic system costs and larger government subsidies juxtaposed against the rising cost of grid electricity means that the U.S. is "rapidly approaching grid parity."
But Bradford added that there is skepticism that grid parity is within reach, especially among those who last looked at photovoltaic system costs back in 2007, when they were significantly higher. "I'm not sure that a lot of people believe it," Bradford said.
Others have predicted previously that a majority of the U.S. would achieve grid parity by 2015. But Bradford's assertion that 99 percent of the country could access solar generated power for no more than 5 cents/kWH more than grid power appears to be a first.
Andrew Beebe, managing director of energy solutions at SunTech America, the U.S. subsidiary of China's SunTech Power Holdings, said it was the first time he had seen such an aggressive prediction. "It's great, assuming that it is true," Beebe said. He added that research from The Prometheus Institute is generally very accurate.
Getting solar power within 5 cents/kWH of grid generated power would be significant because it would close the economic gap and allow more environmentally conscious consumers and organizations to switch to solar power without feeling the financial pain, said Shyam Mehta, a senior analyst with GTM Research.
"The economics need to get closer so that the externalities can come into play," Mehta said. "They won't come into play if the economics aren't close enough."
Bradford said solar in the U.S. will get a big boost from economic subsidies as part of the financial rescue package enacted by the U.S. last November and from the huge fiscal stimulus pushed through earlier this year. At the same time, he said, government incentives to push solar in European countries like Spain and Germany are, at least temporarily, on the decline. As a result, Bradford said, the U.S. has a shot to become the biggest market for photovoltaics and one of the largest producers over the next few years.
"The U.S. is going to be an extraordinary market," Bradford said. Later, he added, "If this [solar] industry is going to be a revolution, I think now is the time."
In a panel discussion following Bradford's presentation, Julie Blunden, vice president of public policy and corporate communications at SunPower Corp., said the growth of the solar industry could be slowed by political forces as the solar industry attempts to enter the power industry.
Intersolar North America is a tradeshow for the photovoltaic industry co-located with Semicon West.
|
|
|
|
|
Tim R Johnson
7/13/2009 11:44 PM EDT
The true cost of a solar power installation includes both the solar power collector and backup power storage for at night or when the sun is covered by weather. It is only when this total cost (minus subsidies) equals grid power cost that solr becomes affordable.
Sign in to Reply
jchisolm
7/14/2009 11:25 AM EDT
The grid parity is completely false. As pointed out in the article several times the parity is only acheived with "government subsidies" - stealing money from one group and giving it to another.
Sign in to Reply
over50inTexas
7/15/2009 10:03 AM EDT
Since when was a $0.05/kWH "increase" considered price parity? I pay $0.125/kWH today, so PV would represent a 40% increase in my electric rates.
Also, like other articles, EE Times does not mention the life expectancy of the PV supply. In 2007, a PV salesman admitted that PV loses about 10% of power generating capability each year. My information is old, but I never get media updates on the critical long-term reliability for PV.
On Yahoo, I found a 2.15kWH home array for $6,600 with installation. To calculate the payback, I generously assume 10 hours/day solar generation for 365 days a year. At $0.125/kWH from the power company this would imply a 7 year payback if PV generation does not fall off. It would similarly imply 8+ years & 10+ years for payback with a 5% or 10% annual efficiency reduction, respectively. PV never pays back with a 20% annual efficiency reduction.
Government taxation of existing power sources and subsidies of PV could turn this around, but the economics are quite marginal. And the facts are not being accurately reported.
Sign in to Reply
green_is_now
7/15/2009 2:10 PM EDT
Over50inTexas,
Are you including distribution and transmission kwh costs?
In California this ads 0.08$/kwh to our costs, making our total cost/kwh over 0.020$/kwh.
Add the subsidies and net metering and the payback gets down under 5 years with falling PV system cost just icing on the PV cake.
so places like texas and california will-are at parity.
Wet and cloudy places like Seattle will probably never make sense.
However all the environmentally friendly forward thinking people in areas like Seattle could be allowed to participate by being allowed to invest in PV systems in regions it does make sense via a government managed or oversight controlled with proper guarantees and protections for there investments that could accelerate the deployment in areas that do make sense.
(See articles about PV and funding via property tax tied protection of loans in Palm Springs Ca)
Cash strapped homeowners with good credit or via property tax tied payment systems could do this today allowing everyone wishing to make a difference no mater where they live a reality.
This would take some much needed relief off the governments back (WE cannot afford another 1 trillion dollar big biz pig fest) to achieve the goal of reducing imported energy and thus US deficits.
Sign in to Reply
ProdEng
7/15/2009 3:20 PM EDT
Here in California PGE has a tiered structure where the top two tiers are $0.37 and $.044/KWH so most people who put in a PV system only size it to cover the top three tiers giving them a faster payback and keeping their bills reasonable.
Sign in to Reply
Carl_S
7/15/2009 4:10 PM EDT
I am confused by this article. It states photovoltaic power is approaching grid parity, and then states that solar power will be only 5 cents per kWhr above grid power, which is a huge bump.
Which is it?
Sign in to Reply
dylan.mcgrath
7/15/2009 10:10 PM EDT
The analyst predicted solar power would be equal to or less expensive than grid power for two thirds of the U.S. In most of the remaining third of the country, it will be no more than 5 cents per kWhr more expensive, he said.
Sign in to Reply