Solar World: EU grid parity by 2020

The day solar photovoltaic energy can compete with fossil fuel-driven electricity in Europe is not far off, delegates to the European Union Photovoltaic Technology Platform conference said this week.

"Grid parity -- the (cost) competitiveness of PV with conventional energy sources -- will be reached in Southern Europe by 2015 and most of Europe by 2020," Marie Latour, the communications officer for the Brussels-based European Photovoltaic Industry Association, told United Press International.

According to the Strategic Research Agenda presented at the conference, the typical cost of solar electricity generation in Southern Europe in the 1980s was more than $2.66 per kilowatt hour. Today, the same amount of solar energy costs about 40 cents.

The Strategic Research Agenda predicts that in 2015, solar energy will cost 20 cents per kilowatt-hour in Southern Europe, making it competitive with retail prices for fossil fuel-driven electricity. By 2030, this cost will fall to 8 cents per kilowatt hour, a price that can compete with wholesale rates for conventional power.

Finally, the report projects that the long-term potential price for solar energy generation in Southern Europe is as low as 4 cents per kilowatt hour. (All prices were originally quoted in euros in the report.)

The time to return on investment for solar energy systems will also drop dramatically, the report said: In Southern Europe, a system that today pays for itself within two years will show a return on the investment within only one year by 2015. In 2030, the same solar investment will pay for itself within six months, and beyond that the agenda's authors saw systems taking only three months to become profitable.

The meeting, held Tuesday in Berlin, was "a great success: We had 300 participants coming from all over Europe and in particular from Germany," Latour said. The delegates resolved that European public research budgets should keep pace with photovoltaic market growth -- in other words, research funding should double.

Furthermore, the authors of the agenda stressed, in the short term this funding should be dedicated to improving European PV competitiveness in the world market.

"The coming decade is expected to be decisive for the future prospects of the EU PV industry. The global PV sector will grow to maturity and achieve multibillion-dollar turnovers," the document said.

"Competition will be fierce. Rapid innovation and high production volumes are crucial to establish leadership."

In addition to recommending more funding allocation to public photovoltaic research at the Berlin conference this week, participants discussed the importance of maintaining Germany's feed-in tariff policies, Latour wrote to UPI in an e-mail, "to keep on driving the European market and maintain investors' confidence."

Germany is the world leader in the photovoltaic market, and part of the reason for this dominance is its feed-in tariff policy: German utilities pay their solar customers for the extra solar energy they produce, which is "fed" back onto the electric grid. Many U.S. states, most notably California, have held the German model as an example for their own incentives.

In fact, many California-based solar advocates have expressed hopes that they will overtake the German market -- especially because California gets a lot more sunlight than northern Europe.

Latour expressed hope that the Strategic Research Agenda presented at the conference would guide European PV policy: "(It) should serve as a basis to define research priorities (for the) short, medium, and long term at the European and the national level," she said.

The vice chairman of the EU PV Technology Platform, Joachim Luther, also lauded the SRA in his closing remarks to the conference: "For the first time in Europe, we have a Strategic Research Agenda that has been consolidated Europe-wide between the main actors in PV technology. This agenda constitutes an excellent basis for the further development of European, national and regional strategies (for) industrial activities (and) market development as well as (for) research and innovation in photovoltaics," he said.

Though silicon-based PV is the oldest and most well-developed of the photovoltaic technologies, conference-goers also acknowledged that alternative PV technologies may one day overtake silicon: "In the long term, silicon technology is expected to continue to play an important role in the PV sector. However, there is uncertainty regarding the precise module efficiency, silicon consumption, cell and module architecture and nature of the cell raw materials after 2020," when the market is much larger, according to the Strategic Research Agenda.

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