According to a report from Eclareon, a consulting firm for renewable energy in Europe, grid parity has been reached by solar energy.
Simply put, buying electricity for consumption from the main grid costs about the same cost as owning and maintaining a rooftop solar system.
Solar system : what grid parity really shows
Maintenance and installation costs and estimates of a solar panel’s longevity are variables computed into calculations of grid parity. Also, there could be several reasons as to why solar energy may not be cost-effective as originally intended such as how much sunlight a particular area obtains while in operation.
In the U.S., for instance, installation of a solar power system on the roof already costs a whole lot less than buying electricity from a main grid. Grid parity shows the real market competitiveness of maintaining solar panels; grid parity also does not take the benefits of account tax into consideration.
It is actually cheaper to invest in solar system than buy electricity
At present, the U.S. Federal Government grants a 30% tax credit for solar or photovoltaic (PV) systems. The downside is that this benefit expires on 21 December 2016, all the more reason why a rooftop solar system must cost less before 2016’s end. Then again, there are the so-called “soft costs” which are obstacles to U.S. grid parity realisation such as maintenance fees and financing, a fact that may be whittled down to only the base cost of manufacturing the solar panels.
According to the Rocky Mountain Institute’s prediction, consumers will begin defecting from the main grid only between 2025 and 2047, a relatively long period of time from today. It has become cheaper for U.S. households to invest in a solar system than to purchase electricity. At $3.00 per kilowatt for an installed solar system, around a hundred gigawatts (GWs) of energy could be installed today even without reliance on Federal or state subsidy programs. With that $3.00 threshold, the only growth constraints against the use of solar panels would be capital, a skilled labour force, and manufacturing capacity.
We may not need the grid but…
Major U.S. utility companies, according to The New York Times, consider solar power companies as well as incentives for renewable energy a big threat that will replace the demand and necessity for traditional electricity if the use of solar energy becomes ubiquitous. As far as these utility companies are concerned, government incentives for solar energy systems should be halted.
The rationale that utility companies give is that customers of solar systems could stop payments altogether for electricity, meaning, they do not pay for the main grid also. Utility companies argue that this situation will shift costs to customers who are not into solar systems. Yes, we can do away with the grid if we have rooftop solar system. Unfortunately, the utility companies are going to do everything in their power to make us regret it.