Grid parity for solar power is approaching

And is already here in parts of California

The role of solar power is still negligible in the world’s overall energy system. It accounts for a mere 0.3 per cent of the energy production in Germany and even less in the rest of the world. According to industry leaders, energy producers are waiting for price parity with fossil fuels before making the necessarily massive investments. They simply cannot rely on politically fickle subsidies in their long term planning.

Until recently, this so-called grid parity still seemed very far away. Solar electricity was calculated to be at least five times as expensive as fossil fuels. Today however, new reports claim that in the sunny parts of the United States, Japan, and southern Europe, parity with fossil fuels could very well be reached by 2012. Even more, in certain parts of the State of California, grid parity is already reality.

Prices growing towards one another

That is not such a big surprise. First of all, the cost of solar power has in recent years been dropping by around 5 per cent annually. Secondly, crude oil prices have been rising steeply — they have nearly tripled in the 4 year period from 2003 to 2007. The prices of natural gas and grid power have been rising along with oil prices. A third important factor is geography: in the sunniest regions of Europe and the U.S., the price of solar electricity is about half of that in the more temperate climates of say Berlin, London, or New York. Price parity in a cloudy London is consequently only expected to arrive around 2020.

Overcoming production capacity barriers

But price is not the only barrier. Today, one of the main restraints on the growth of solar energy is still the shortage of silicon. The question remains if by the time price parity will be reached, production capacity barriers will have disappeared. The silicon industry claims that they will. Bottlenecks should ease over in the next two or three years, they say.

If that fails to materialize, an important breakthrough in any of the non-silicon photovoltaic technologies could maybe lead the way. One of those technologies is Dye-Sensitized Thin Film (DSTF). G24 Innovations Limited, headquartered in Cardiff, Wales, recently announced the first commercial production of this new type of solar cells.

References

• Dye-Sensitized Thin Film
• Solar Power Edges towards boom time