2014-04-23

Co.Exist

Solar Power Is Now As Cheap As Grid Electricity In These European Countries

Germany, Italy, and Spain could zoom forward on solar, now that it saves people money compared to buying electricity from a power company.

Choosing solar power no longer has to be a sacrifice for the sake of the environment. In Germany, Italy, and Spain, installing your own solar panels can now actually save money.

A report released by European renewable energy consulting firm Eclareon shows that solar energy has reached “grid parity.” In other words, over the full lifetime of the equipment, the total cost of owning and operating rooftop solar panels is about the same as buying electricity from the grid.

There are a lot of variables involved in grid parity calculations, such as installation and maintenance costs and estimates of how long a solar panel will last. That also means there are a lot of reasons that can prevent solar power from being cost-effective, not the least of which is the amount of sun an area gets.

Because of tax benefits in the U.S., installing a rooftop solar system can already cost less over time than buying power from the grid. But grid parity is a measurement that doesn't take into account tax benefits. It instead shows the true market competitiveness of running a solar panel.

Why is that important? There is currently a whopping 30% U.S. federal tax credit for photovoltaic systems. Unfortunately, that benefit is set to expire at the end of 2016, which means that rooftop solar systems need to become cheaper in their own right sooner rather than later.

One of the main obstacles to grid parity in the U.S. is what analysts call “soft costs.” These include financing and maintenance fees, as opposed to just the base manufacturing cost of solar panels. A recent report from Rocky Mountain Institute predicts that consumers will start defecting from the grid between 2025 and 2047, depending on their state. So it might be a while before true "grid parity" becomes a reality in the U.S.

[Image: Sunrise via Shutterstock]

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