A cleantech Senior Research Analyst at Piper Jaffray & Co, Ahmar Zaman, has said that he believes solar power will reach grid parity at a retail level in some markets as early as next year.
These markets include Italy and Hawaii, where the price of electricity is fairly high, and there is a lot of sunshine.
Zaman explains that in 2007, the cost of residential solar power was around $8 to $10 a watt. In 2011, solar systems can be installed for $4 to $5 a watt. In places where the price of electricity is high and there is high solar radiance, the solar market is already approaching parity. Additionally, the price of solar panels has declined over the last few years.
The key point is that they think that markets with grid parity will emerge as early as this year or next year, and by 2015. This is a lot sooner than many people think. In Southern California, for peak energy demand at peak electricity prices, solar is already at grid parity.
Further, they think that by 2015, most markets in the world will be at grid parity unsubsidized. They believe that every year, solar will get more and more competitive in more and more markets around the world.
Zaman maintains that over the next few years, the price of solar will continue to decline, and subsidies will eventually be phased out. Solar will be able to stand on its own, unsubsidized. The growth in solar will be driven by demand in terms of the need to offset power prices, and the consensus on the need to address climate change around the world.
The need for rural electrification in regions such as India and Latin America will also help to drive demand. It was noted that the uptake of cell phone technology was also high in these emerging markets. Solar could follow a similar path. It’s expensive to install transmission lines out to rural areas, so solar will be looked at as a viable option.
Image CC licensed by Living Off Grid
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