Solar electricity could rival 'traditional' power as early as 2013

Electricity generated by solar photovoltaics (PV) could cost about the same as regular grid-based electricity in some parts of Europe by 2013, according to a new study by the European Photovoltaic Industry Association (EPIA).

Furthermore, by 2020, solar PV electricity will have reached grid parity across Europe, the study finds.

The cost of PV technology has dropped dramatically over the past 20 years, with module prices declining by 20 percent or more every time the cumulative sold volume of modules has doubled. The EPIA report finds there is still the potential for another 50 percent decline in prices through 2020.

“Already today, PV electricity is cheaper than many people think,” said Ingmar Wilhelm, president of the EPIA. “In the coming years it is going to get even cheaper thanks to ever-improving technology and economies of scale. As also the price of electricity from conventional sources increases, solar PV will be become a fully competitive part of the energy mix.”

The EPIA study, conducted with the help of consulting firm A.T. Kearney, analyzed five markets: France, Germany, Italy, Spain and the United Kingdom. Among its findings:

• Solar PV electricity could cost about the same as traditionally produced grid power for the commercial segment of Italy by 2013.
• Italy is also where ground-mounted solar PV will first become equally as attractive to investors as fossil-fuel-based energy, starting as early as 2014.

However, the EPIA report notes, for PV to achieve competitive prices across Europe, governments will have to show a political commitment to regulatory frameworks that support solar technology and remove market distortions. Support mechanisms like feed-in tariffs (FITs) have helped solar PV gain a market foothold in many countries, the EPIA notes, and such strategies could eventually be phased out as the technology continues to develop and generation prices continue to decline.

“Switching to solar photovoltaic electricity is not just a desirable option for achieving our energy and environmental goals,” Wilhelm said, “it is also a realistic and competitive one.”