Thursday, December 8, 2011

Reaching Economic Parity in Some Regions, Solar is on the March

Dependable tech prognosticator Ray Kurzweil has been calling it. But I realize that even hinting that solar is starting to make financial sense vs. fossils  is bound to set off a chorus along the lines of "you granola chomping, Birkenstock donning, eco-utopian, bio-dome occupying dreamer."

Such is life. Of course, economists and everyone else in the energy biz are keeping their eyes on the current costs and projected trends of every kind of generation source: fossil, renewable, nuclear. And depending on how you do the math, folks of good intent can and will disagree.

A new report says that distributed solar is getting closer in many markets, even surpassing conventional generation in some. It's getting to be less about technology and subsidies, and more about pure lifecycle ROI.

GTM wrote about it yesterday, and here are a few excerpts I found interesting:
  • ... in cost terms, the homeowner’s choice is between a solar system and other options. “Before we hit the majority of the American public, which the DOE puts out only a few more years, we still need to push the economics down a little further
  • The shift to solar is not going to happen all at once ... two pockets of the country [will] open up to solar first. Solar will most quickly be noticed as competitive where electricity rates are high or where utilities have inordinate monthly charges
  • Where PV becomes economically viable ... will be when the banks get comfortable with it and it becomes something that you just put on your mortgage, a normal thing that everybody in the neighborhood is doing because they can save a little every month on their utility bill
The report may be optimistic. Its writers may have been wearing sandals when they wrote it. But I think it's becoming less and less of a stretch to call solar a viable alternative in some geographies.

It won't work everywhere, and it won't work for everyone. But I think that in many applications, if it's not a winner today, then it will be tomorrow. Andy Bochman

Photo credit: Clearly Ambiguous on Flickr.com

3 comments:

Dan Nolan said...

How long can China subsidies their industry? I have heard about grid parity at many solar conferences. Let’s follow the money! Who is backing solar development? Not the Government after Solyndra. Check this out: . http://blogs.wsj.com/venturecapital/2011/12/01/so-how-did-solarcity-get-funded-without-fed-loan-guarantee/

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Peter Lilienthal said...

The original post was a little bit optimisitic, but PV has definitely already reached grid parity on diesel powered grids. http://blog.homerenergy.com/