The results of the fourth issue of the study “PV Grid Parity Monitor”, published by the consulting firm CREARA, sponsored by BayWa r.e., and in cooperation with Copper Alliance, show that photovoltaic grid parity (the moment when PV electricity becomes competitive with retail electricity prices, assuming that 100% of the electricity is self-consumed on-site) is an economic reality in the commercial segment (30 kW PV systems).
The new issue of the Grid Parity Monitor (GPM) analyzes competitiveness of the photovoltaic technology (PV) with retail electricity prices for commercial consumers and assesses local regulation for self-consumption in one city of 5 different countries: Chile, Germany, Italy, Mexico, and Spain.
According to the study, in the first semester of 2017, PV economics have further improved in most of the countries:
- A key driver of PV grid parity is the decrease in PV system prices for all countries, one of the main parameters that determines the LCOE.
- The decrease in grid electricity prices experienced in the past by several countries has reversed in 2016-2017, especially in Chile, Germany and Mexico. This has positively impacted the competitive position of PV in those countries.
In Chile, the sharp decrease in PV installation prices has pushed PV Grid Parity forward. However, some of the PV installations analyzed require capital expenditures that still result in PV electricity costs that are above the retail electricity prices in Copiapó.
In Mexico, most commercial electricity consumers have reached grid parity. For other consumers, low electricity tariffs still represent a barrier.
European countries that are relatively mature PV markets such as Germany, Italy, or Spain, already reached PV grid parity in 2013. In Spain, grid parity has been reached due to high irradiation and competitive PV system prices, but poor regulatory support is a barrier for market creation (e.g. there is no net metering or net billing scheme in place). In Germany and Italy, low PV installation prices, a low discount rate, and relatively high retail electricity prices all contribute to reaching full grid parity.
The study remarks that PV grid parity by itself is no guarantee of market creation. José Ignacio Briano, Director of the Consulting Department at CREARA, asserts that “a key driver for market development is regulatory support that enables the monetization of excess PV electricity and reduces administrative barriers. The results of the current issue of the GPM still support this conclusion”.
