#1 cleantech news, reviews, & analysis site in the world. Subscribe today. The future is now.

Clean Power

Published on May 22nd, 2015 | by John Farrell


Solar Parity Coming Faster Than Expected

May 22nd, 2015 by  

Originally posted at ilsr.org.

Back in 2012, ILSR released a pair of reports on the solar Rooftop Revolution, noting that one-third of Americans would live in a metropolitan area where the cost of solar energy from their roof would be less than the cost of power from the utility by 2021. When combined with our analysis of non-residential property, we estimated that 287 gigawatts of solar would be at price parity with grid electricity across the country by 2021.

It turns out we were wrong, and that the rapidly falling cost of solar is making solar more economical in more big cities than many people expected.

For example, in our original analysis looking for parity between solar and grid electricity prices on residential property in 2015, residents were expected to save money by going solar in only 2 of the largest 42 U.S. metro areas, New York and San Diego.* According to a recently released report by the North Carolina Clean Energy Technology Center, however, grid parity was coming much quicker. A review shows that their study included all applicable federal, state, and local incentives (instead of our no-subsidy analysis), but it gave us a reason to revisit our 2012 analysis.

As it turns out, solar parity––without incentives––has been accelerating.

population at solar parity in top 40 metros 2015 ILSR

In 2015, six of the largest metropolitan areas are already at solar parity, representing over 30 million Americans. That’s one-third more people living with solar at parity with utility electricity prices than in our original analysis, when we calculated that 2015 would bring parity to just two metro areas, totaling 22 million people. The following table lists the metropolitan areas where electricity from solar installed at $3.50 per Watt––with no incentives––matches the average electricity rate, and a comparison to our original 2012 analysis.

Cities at Solar Parity in 2015

Metro Area Original Analysis Revisited Analysis
New York 2015 2016
Boston 2020 now
San Francisco 2017 now
San Diego 2013 now
San Jose 2017 now
Los Angeles 2017 now
Riverside, CA 2017 now

In 2017, the five-year point in our original, the population at parity is likely to be 71 million instead of 51 million. By 2021, 109 million Americans will be at parity, instead of our original prediction of 95 million.

Cities at Solar Parity in 2021

Metro Area Original Analysis Revisited Analysis
New York 2015 2016
Boston 2020 now
San Francisco 2017 now
San Diego 2013 now
San Jose 2017 now
Los Angeles 2017 now
Riverside, CA 2017 now
Chicago 2023 2018
Dallas 2019 2019
Philadelphia 2020 2018
Houston 2021 2020
Miami 2021 2020
Detroit 2023 2020
Phoenix 2018 2017
Tampa 2020 2021
Baltimore 2023 2021
Denver 2020 2021
Pittsburgh 2024 2020
Sacramento, CA 2018 2019
Las Vegas 2019 2018
Providence, RI 2020 2021
Jacksonville, FL 2022 2021

As you may notice in the above chart, some cities have reach parity sooner, and some later. The following map illustrates the changes by city for all 40 metropolitan areas.  What’s not captured in the table above or the map is that the acceleration of grid parity seems to be concentrated in the largest metropolitan areas, pushing up the population at parity despite nearly as many cities losing ground toward parity as gained between our new and original analysis.

comparison of city parity year 2012 v 2015 ilsr

In the future, we’ll add a bit more, by examining the net present value of a solar investment in each city. This accounts for the fact that an investment in solar can make sense even if the cost of solar electricity is currently higher than retail prices because, in the long run, solar prices are fixed, but electricity prices tend to rise. Early results suggest that nearly 150 million Americans––33% more than a simple parity analysis reveals––will live in a city where a solar investment––without subsidies––pays back over 25 years by 2021. More to come…

Data and Assumptions

*We picked these 42 because half the U.S. population lived in those 42 metropolitan areas in 2012.

  • The installed cost of solar for this analysis is $3.50 per Watt in 2015, estimated to decrease 7% per year
  • The price of electricity is expected to increase by 2% per year
  • Electricity prices for each metro area were taken from the Bureau of Labor Statistics or Energy Information Administration
  • Solar insolation data comes from the National Renewable Energy Laboratory’s PVWatts system

This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter or get the Democratic Energy weekly update.

Photo Credit: Dennis Wilkinson, via Flickr (BY-NC-SA 2.0 license)

Tags: , , ,

About the Author

directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

Back to Top ↑