Solar PV reducing the price of electricity across the board still reduces the price system owners would pay if there weren’t people installing solar. Not sure what you’re looking for in this.

For example, maybe at $4.40 per installed watt, New York achieves grid parity up to 2% PV installed capacity in 2016. But to achieve 5% PV deployment, maybe the price would need to be $3 per watt to overcome the negative feedback from lower power prices. I’m curious about how big of an effect this is expected to have. Maybe it isn’t very significant – but the peak price declines in Germany that you link to suggests a significant effect.

If you install a home array that gives you electricity at parity to what you pay the utility company today you are likely to enjoy some decades of almost free electricity. In addition, during the “20 years” that is used for the parity calculation the price you pay for electricity will not increase. Assume 3% inflation and after 20 years the price others will pay for electricity will have almost doubled while your cost will be locked into the day you connected your array.

The “parity math” for a homeowner needs to include a couple of decades of no increases in electricity cost plus some decades of free electricity.

Same holds for utility companies. They mislead themselves if they look only at a 20 year LCOE calculation. After a 20 year payoff they will have a fuel-free, low maintenance electricity source that they can sell on the grid. Much better than a 20 year old combined-cycle gas plant that needs to be fed a steady supply of less-available natural gas.

However, if people can sell their surplus PV-electricity based on TOS (time of supply) it should still be a good deal for the rooftop owner. Peak hour wholesale is generally quite a bit higher than average wholesale.

If one can sell at peak TOS wholesale and buy back at off-peak (post sundown) retail it should be a good deal for all. Utility companies should see their wholesale costs drop as they avoid very expensive gas peaker power. The rooftop owner will still get very cheap “storage/backup” for their solar system.

As always good info and analysis. However, there is an option that could bring prices to “over parity” for an individual almost immediately. That being if a ‘handy’ person took the time and effort to build panels DIY instead of buying ‘off the shelf’. With individual cells being around .60cnts that brings panel cost to much lower costs.

I realize that not everyone has this option but it is a reality. I hope to do such a project this summer and be able to share my experience with interested folks. I’ll let you know how it pans out.

Ed

Thank You

Whenever you rely on grid power, you are always incurring a COST. As long as you’re using it, money is simply flowing out of your pocket and into someone else’s.

But when you install a solar system, you are purchasing an ASSET. You are becoming your own supplier. You can even sell any excess you produce, making it a source of income.

Parity calculations only compare the cost of purchasing the panels to the cost of staying with the grid supplier, which is an important consideration, certainly. But it distracts from the fact that after the (calculated) payback period is covered, what remains is essentially free energy, for the rest of the life of the system.

In the end focusing on parity is comparing apples to oranges. It implicitly treats the solar purchase as if it were just another cost incurred, instead of the INVESTMENT that it actually is. It also relies on massaging a few key assumptions such as projected cost of electricity and the longevity of the panels. Shift those assumed values a little and the whole outcome changes, because in the end the whole comparison is rather arbitrary.

So how about trying to remove the parity comparison from consideration entirely and measuring home solar on its own terms?

“… depending on the type of state policy for net metering, the customer can essentially spin their electric meter backward when their solar panels produce electricity. …”

If solar takes off, those policies will be unsustainable. People will have to sell their excess power at the wholesale price, not the retail. The grid still has to be paid for.