Solar Power Is One Step Closer To Grid Parity
We hear a lot about grid parity, don’t we? That’s the point at which the cost of energy generated by solar, wind, and other renewables is the same as that generated from conventional sources. The author of this article on Sharp Electronics new 43.5%-efficient solar cell writes: “Sharp shattered the efficiency record with its concentrator triple-junction compound solar cell, which uses a lens-based system to focus sunlight directly onto the cells in order to generate electricity.” Then he adds, “This latest breakthrough puts solar power one step closer to grid parity.”
I’m not complaining, btw. The mere fact that the term is rapidly becoming a part of the world’s everyday lexicon is proof that more people are tuning into this important discussion.
And let’s not ignore the elephant in the room: In energy, cost is a very big deal. 2GreenEnergy Associate Dr. Peter Lilienthal, whose software is used to integrate renewables onto grids in more than 80 countries, once told me, “If you don’t care how much you pay for it, I’ll find you all the clean energy you could use in a thousand lifetimes.” The guy has a way with words.
In any case, grid parity here we come.
It’s fine that they have succeeded in greatly increasing PV efficiency. But, won’t it be a bit difficult to market the power if they can’t guarantee the ability to provide it when it is needed?
Wind farms have been marketing power for decades without being able to guarantee availability at any particular time. This only begins to be a problem when a fairly large proportion of power at certain times is provided by intermittent sources – Germany one sunny day last summer at one point received 50% of its electricity supply from solar and the system did not collapse.
What is more of an issue is the difficulty of maintaining profitability for peaking plant when there are very high levels of solar and wind power.
Regarding grid parity – there are different interpretations of the term, but even assuming you are referring to unsubsidised energy X at lower or equal price to traditional sources there are a number of variables still to be considered.
Grid parity of solar on roof for self consumption at an industrial plant is very different from grid parity for a stand alone solar farm. – The former must compete with retail electricity in the ratios of different time based tariffs displaced, while the latter must compete with wholesale prices to be at grid parity.
Time of generation – solar power has a time of generation advantage as most power is produced in the daytime – with a large proportion at or near peak demand times in many markets. This must be taken into account when considering parity price.
Intermittent generation incurs balancing costs – should a proportionate amount of balancing services i.e. peak generators be billed to intermittent suppliers? What is this figure?
Grid parity can very easily be skewed by moving to or away from a fixed cost + kWh charge and changing the proportions thereof. If a supplier chooses and is allowed to charge a high fixed fee to cover all fixed assets and a low fee for each kWh, grid parity becomes harder to achieve.
Externalities and tax breaks – renewable energy sources are not unique in enjoying incentives and tax breaks – true grid parity should perhaps calculate the per kWh value of tax breaks and publicly absorbed externalities for all sources of energy, determine a cost per kWh of the existing mix, and then determine the cost of adding each MWh of new generation from each possible source. In this way, a true comparison of the cost of each source of electricity can be made. Who knows, perhaps we are already at grid parity in most developed markets?