Residential PV achieves grid parity

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Researchers at Queen’s University recalculate the levelized cost of electricity, and find photovoltaics (PV) is the low-cost solution.
By Seth Masia
Editor, SOLAR TODAY
With increasing frequency, peer-reviewed academic papers are confirming things the market already knows. This month, it’s this: residential PV has achieved grid parity for peaking loads in key North American markets, and is quickly gaining ground as the price of conventional power rises.

A team of researchers at Queen’s University in Ontario has published “A Review of Solar Photovoltaic Levelized Cost of Electricity” in Renewable & Sustainable Energy Reviews.

Mechanical engineering professor Joshua Pearce, with his students Kadra Branker and M.J.M. Pathak, analyzed standard methods of calculating LCOE. Then they proposed a template for determining LCOE based on specific values for specific locations and specific equipment prices. Their method avoids sweeping generic assumptions and accommodates recently-acquired data – for instance, that real-world installations are degrading more slowly than predicted, and therefore have a significantly longer productive life cycle, and that both equipment costs and interest rates have come down quickly in recent months. Critically, the team modeled insolation and financing mechanisms current in Ontario, which are consistent with conditions across the northern tier of U.S. states, and a residential-scale installation instead of a more cost-efficient utility-scale array.

The study concludes, in part:
Given the state of the art in the technology and favorable financing terms it is clear that PV has already obtained grid parity in specific locations and as installed costs continue to decline, grid electricity prices continue to escalate, and industry experience increases, PV will become an increasingly economically advantageous source of electricity over expanding geographical regions.

The full report is available for purchase here: http://dx.doi.org/10.1016/j.rser.2011.07.104.

A draft version is posted here:http://qspace.library.queensu.ca/bitstream/1974/6879/1/LCOE%20of%20PV%20pre-print.pdf

In August, 2010, Pearce and Branker published a financial analysis in Energy Policy, finding that the Ontario government would realize more than 8 percent annual ROI for subsidizing development of thin-film manufacturing in the province. See http://dx.doi.org/10.1016/j.enpol.2010.03.058

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