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Solar energy will fall in price to match the cost of conventional
fossil fuel electricity far sooner than previously expected,
the UK's largest solar company has claimed in a new report.
Solarcentury
said British homeowners will see solar achieve 'grid parity'
- the point where solar electricity rivals or becomes cheaper
than conventional nonrenewable electricity - by 2013. Most
predictions suggest that technological innovation will not
bring the price down far enough until 2020 or later.
The company suggested falling production costs for solar
panels and increasing conventional electricity costs have
brought parity closer. Prices for solar and grid electricity
in residential homes are expected to crossover at around 17p
to 18p per unit of electricity (kWh) in 2013, followed by
parity for commercial solar electricity in 2018.
Last December, the renewable energy analysts New Energy Finance
(NEF)
predicted silicon costs - a key material for much solar panel
technology - would fall by 31.5% in 2009 compared with 2008
levels. Energy consultants Element
Energy, under commission from the UK government, have
also forecast that solar PV costs will fall by around half
between now and 2020.
Derry Newman, CEO for Solarcentury, said - "When you reach
grid parity, you have a watershed moment where the perceptions
of investors and consumers shift. People have been programmed
to believe solar is expensive and takes a hundred years to
pay back - but, when parity arrives, people realise it takes
8-10 years to payback and they can then be making money out
of it."
Jeremy Leggett, executive chairman of Solarcentury said -
"The feed-in tariff that the government has said it will bring
in from April 2010, is vital. A burst of premium-pricing for
solar energy - of the kind now on offer in 18 European countries
- will stimulate a very fast-growing market."
Experts said the projections were based on significant assumptions
in future energy prices, which have been extremely volatile
over recent years - last year saw gas and electricity prices
double, but now household bills are falling again.
Ray Noble, solar PV specialist at the Renewable Energy Association
(REA)
, said - "The predicted grid parity by 2013 could be possible
if all of the predictions - both in terms of grid electricity
prices increasing and reductions in the cost of solar PV -
come through. However, that's a big 'if' - any slight changes
in the pricing can add further years to this date."
He added that the important message is that, even if grid
parity slipped to 2016, the moment when solar can compete
on cost is not far off.
Chris Goodall, Green party parliamentary candidate and author
of Ten Technologies to Save the Planet, warned that
the grid parity predictions were based on unrealistic price
assumptions. "This projection of residential grid parity depends
crucially on continually increasing prices of conventional
electricity, but I just don't see any evidence that residential
electricity will cost 17-18p a kWh in 2013. The 'underlying'
retail price of electricity at the moment is no more than
11p per kWh" - he said.
Newman argued that China will continue to take more fossil
fuel and believes that peak oil will begin to bite in 2013,
both of which will contribute to rising prices in fossil fuel
electricity.
Other parts of the world, such as Spain and California, have
already achieved grid parity on the price of solar, but only
for large installations rather than small-scale ones for homeowners.
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