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Solar Reaching Parity with Other Energy Sources, Say New Reports

Over the past few weeks, a number of prominent organizations around world have issued reports determining that solar is becoming an increasingly competitive energy source and is coming into parity—or cost-equality—with other forms of electric generation. UBS Capital, Royal Dutch Shell, Deutsche Bank and NDP SolarBuzz have each issued reports finding that solar is becoming an increasingly important part of the world’s energy supply. The only disagreement is how soon it’s happening. 

As solar comes into parity with other energy sources, the arguments against it—particularly that it’s more expensive—fade away and power producers, utilities, businesses and homeowners the world over are starting to see it as a more serious alternative to fossil fuel and other means of electric generation. Solar is already coming into parity in certain parts of the world—including in Hawaii and parts of California. It’s also coming into parity in an increasing number of countries, including Australia, Brazil, India, Italy and Japan.

The projections have been coming for a while. Last year during the World Renewable Energy Forum in Denver, CO, US Energy Secretary Steven Chu said Hawaii was already at parity because its cost of grid-sourced electricity was at about 26 cents a kilowatt hour. He added Italy and Spain were also likely to reach solar parity in 2012 as was Australia. “By 2013 Brazil will slip in and California is on the cusp [for residential solar].” By July 2012 Brazil’s energy department, Empresa de Pesquisa Energetica announced that rooftop solar was cheaper than the electricity from the grid there.

Now analysts at Deutsche Bank have predicted that even more markets throughout the world will become sustainable solar markets without subsidies within a year. According to Renew Economy, which broke the story, Deutsche Bank said India, China and the US are experiencing strong demand and solar projects are now being developed with minimal or no incentives. “While some risks around subsidy cuts in Japan and the UK market remain, we expect a more constructive outlook in most other emerging markets,” Deutsche Bank said. “We see the sector transitioning from subsidized to sustainable markets in 2014.”

This will occur against a background of growing installations across the world, according to the latest NPD Solarbuzz Marketbuzz 2013 Report. The report found that PV demand will increase by 2 gigawatts from to 31 GWs in 2013. That’s up from from 29 GWs in 2012. “In 2013, we expect to see improvement in the market fundamentals that enable PV demand to return to double-digit growth,” said Michael Barker, senior analyst at NPD Solarbuzz. “Installed-system prices will continue to fall, and PV will become increasingly cost competitive across regions with high electricity rates, shortages in domestic supply, and growing renewable obligations to fulfill.”

In its New Lens Scenarios, Shell projected that solar could be the world’s major energy source by the 2060s. Under its Oceans scenario, the Dutch oil giant projected that solar could be the world’s dominant energy supply by the mid-2060s, and by 2100 it could provide 37.7 percent of the entire world’s energy. “The rise in solar is due, in part, to public pressure governments to prioritize it in the electricity ‘merit order,’” Shell said. 

The original article by Chris Meehan was posted on the SolarReviews blog


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