Solar PV edging towards grid parity in Europe

Heading towards grid parity(Photocredit)

The European Photovoltaic Industry Association (EPIA) report predicts that Italy will be the first country in which the renewable energy technology will become competitive with fossil fuels. It assessed France, the UK, Germany, Italy and Spain.

EPIA president Ingmar Wilhelm said that PV is already “cheaper than people think” and is set to get cheaper. The cost of solar panels will go down about 50% by 2020, he added, because of economies of scale and improvements in technology – although the report also predicts a rise in the cost of traditional power sources such as coal and gas over the same period.

Commercial electricity buyers in Italy could find solar PV achieves “dynamic grid parity” in 2013, the report predicts – meaning the point at which the value of long-term electricity revenues from a solar panel installation equals the long-term cost of buying traditionally produced and supplied power from the grid. All installations in all countries will reach dynamic grid parity by 2020, the EPIA says.

The second measure of competitiveness, “generation value competiveness”, will take slightly longer to achieve, the report claims. This refers to the point in a specific country where building PV is just as attractive to investors as building coal or gas plants – Italy’s ground-mounted sector will be first past the post.

Under the report’s predictions, the PV sector will rely less on feed-in tariffs and direct government subsidies in the coming years. However, if the sector is to achieve grid parity, EPIA warns, governments will still need to commit to “regulatory frameworks that support development of the technology and removal of market distortions”.

With thanks to Environmental Finance

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