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Solar grid parity is considered the tipping point for solar power, when installing solar power will cost less than buying electricity from the grid. It’s also a tipping point for the electricity system, when millions of Americans can choose energy production and self-reliance over dependence on their electric utility.
But this simple concept conceals a great deal of complexity. And given the stakes of solar grid parity, it’s worth exploring the details.
Solar grid parity 101—and why you should care
Seeded on Sun Jan 15, 2012 1:34 PM EST
Article Source: grist.org by John Farrell- Enjoy this article? Help vote it up the 'Vine.
- Public Discussion (8)
The cost of solar
For starters, what’s the right metric for the cost of solar? The installed cost for residential solar ($6.40 in 2011), or commercial solar ($5.20), or utility-scale solar ($3.75)? Even if we pick one of these, it’s difficult to compare apples to apples, because grid electricity is priced in dollars per kilowatt-hour (kWh) of electricity, not dollars per Watt.
Enter "levelized cost," or the cost of a solar PV array averaged over a number of years of production. For example, a 1-kilowatt (kW) solar array installed in Minneapolis for $6.40 per Watt costs $6,400. Over 25 years, we can expect that system to produce about 30,000 kWh, so the "simple levelized cost" is $6,400 divided by 30,000, or about $0.21 per kWh.
- 3 votes
#1 - Sun Jan 15, 2012 1:34 PM ESTThis is an excellent financial analysis . The only thing it leaves out is the potential effects of innovation in the solar power industry . This one looks like it is close to being on the market .
- 3 votes
#3 - Sun Jan 15, 2012 5:41 PM ESTGreater efficiency of the panels lowers the installation costs also. Fewer panels and connection hardware and less time to install less hardware.
- 2 votes
You are accurate there as far as I know . In addition improving efficiency often has an effect on longevity of the panels . Better efficiency leads to less heat buildup which results in a longer lifespan .
- 3 votes
And neither of us mentioned the ability to sell excess power that practically doubling the efficiency would allow. That revenue stream alone increase the investment value.
- 2 votes
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