Get Ready for Unsubsidized Solar Grid Parity

Renew Economy summarizes the new Deutsche Bank report on solar:

The key for Deutsche is the emergence of unsubsidised markets in many key countries. It points, for instance, to India, where despite delays in the national solar program, huge demand for state based schemes has produced very competitive tenders, in the [12 cents per kilowatt hour] range. Given the country’s high solar radiation profile and high electricity prices paid by industrial customers, it says several conglomerates are considering large scale implementation of solar for self consumption.

“Grid parity has been reached in India even despite the high cost of capital of around 10-12 percent,” Deutsche Bank notes, and also despite a slight rise in module prices of [3 to 5 cents per kilowatt] in recent months (good for manufacturers).

Italy is another country that appears to be at grid parity, where several developers are under advanced discussions to develop unsubsidized projects in Southern Italy. Deutsche Bank says that for small commercial enterprises that can achieve 50 percent or more self consumption, solar is competitive with grid electricity in most parts of Italy, and commercial businesses in Germany that have the load profile to achieve up to 90 percent self consumption are also finding solar as an attractive source of power generation.

Deutsche bank says demand expected in subsidised markets such as Japan and the UK, including Northern Ireland, is expected to be strong, the US is likely to introduce favourable legislation, including giving solar installations the same status as real estate investment trusts, strong pipelines in Africa and the Middle east, and unexpectedly strong demand in countries such as Mexico and Caribbean nations means that its forecasts for the year are likely to rise.

I’m still for greatly increasing solar subsidies though, to drop the price of electricity and shut down older coal-fired plants at a faster rate.


  1. Did Deutsche Bank also note that solar installations cost 3-5x as much in India as in the states? Average installed cost for solar is $4/watt for residential installations and as low as $2.50/watt for commercial installations.

    And we’re at parity here not just because of coal but not because of cheap natural gas.

    Jon, the economy can’t afford your solutions. What you propose results in one of two things (and maybe both) – more crippling tax increases and very crippling electricity price increases.

    Please stop.

  2. 12 cents a kwh is expensive. Plus like John says, if you factor in the installation costs, it pushes out the breakeven ROI even further.

    You want to take coal offline, it is not through solar, it is through natural gas as that is the most cost effective way to achieve what you want.

    • Jon Geeting says:

      So argue for doing something about the political obstacles keeping installation costs high.

      • The technology is not there yet to bring down the kwh costs. Believe me, if i can save a buck by installing them i would, but the 12 kwh per hour PLUS the install costs, PLUS the battery issue, PLUS the fact that it is usually not efficient to meet 100% of your needs does not make it a real cost effective measure.
        It is not necessarily political, although i am sure some government worker or worthless bureaucrat is fucking something up down the line, it is just that although the greens may wish it, it is not as cost effective as natural gas.

  3. I misspoke, we’re not at parity here but closing in on it. We’re there already for solar thermal but it’s not sexy enough for liberals, politicians and bureaucrats to pay any attention to it. Damn shame, lots of money/energy to be saved there.

    One other thing to remember – Solar can’t be the sole source of power until you solve the power storage / battery issue. Unfortunately there are days the sun doesn’t shine and output is diminished.

    • Jon Geeting says:

      The technology still has a ways to go to catch up, and I agree about the limitations of battery technology. However, there are other costs that could be reduced. Germany is not much sunnier than the northeastern United States, and yet rooftop distributed solar energy production has really been taking off there because the policy environment is better. The cost of permitting and local regulations around home solar installations are lower. Home energy producers are able to sell excess power to the grid, which is not the case in some American states. They have Feed-in tariffs that provide long-term contracts to home energy suppliers for lower priced electricity. We can do more!

  4. I will also repeat a very important point – bureaucrats and politicians should never pick winners. Set standards for productivity and whatever technology meets the standards wins.

    For example, residential wind power is a complete wast of time and money. It meets no reasonable standards and is not trending very well either. So stop subsidizing it already!

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