EPIA: Photovoltaics "fully competitive" by 2020

05. September 2011 | Markets & Trends, Global PV markets, Top News | By:  Jonathan Gifford

An analysis of major European electricity markets by the European Photovoltaic Industry Association has revealed that electricity produced by photovoltaics will be competitive with conventional sources by 2020. The report, released today, also adds that some market segments will see this occur by as early as 2013.

A graph showing falling pv costs.

Falling installed costs have been declining sharpely. Image: EPIA.

Comparing the cost of photovoltaic electricity generation compared to other energy sources over the next decade, EPIA’s latest report has found that falling photovoltaic prices are the key to photovoltaic electricity’s looming competitiveness.

The report finds that photovoltaic module costs decrease by 20 percent every time the cumulative sold volume of photovoltaic modules has doubled. It also adds that there is "huge potential for further generation cost decline" in the next decade. EPIA estimates this to be 50 percent.

"Already today, PV electricity is cheaper than many people think," said EPIA President Ingmar Wilhelm. "In the coming years it is going to get even cheaper thanks to ever-improving technology and economies of scale."

EPIA’s report analysed five key markets including France, Germany, Italy, Spain and the United Kingdom. It was carried out with the support of strategic consulting firm A.T. Kearney.

Another key findings of the report was that "dynamic grid parity", the point at which cost of receiving power from traditional sources in a particular market segment in a particular country, would occur in Italy in the commercial segment by 2013.

Also in Italy, "generation value competitiveness", where the value of adding photovoltaics to the energy mix from an investor’s perspective is equal to conventional sources, could be reached shortly in Italy also. The EPIA report forecasts that occurring by 2014.

EPIA does add an important caveat to its findings in that it states that these forecasts are made in light of government support programs, such as feed-in tariffs (FITs) remain in place until full competition occurs. EPIA advises that such subsidies be phased out as competitiveness approaches.

The full study, “Solar Photovoltaics Competing in the Energy Sector – On the Road to Competitiveness” is being released today at the EUPVSEC Conference in Hamburg.

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