PV Grid Parity Monitor
Overview
It is based on a rigorous and transparent methodology (detailed in Section 4) and has used real and updated data provided by local PV installers, local PV associations and other reliable players from the PV industry. It also includes a specific and indepth analysis of retail electricity rates for each of the 14 cities taken into consideration.
The results of the analyses show that PV Grid Parity (defined as the moment when PV LCOE becomes competitive with retail electricity prices, assuming that 100% of the electricity is selfconsumed instantaneously) has already been reached in several of the cities analyzed in this report. This fact does not imply that PV technology does not need governmental support anymore. On the contrary, in order to make the development of a PV self-consumption market possible, policymakers should concentrate their efforts on reducing administrative barriers and creating or improving regulatory mechanisms (such as net-metering or net-billing regulations) to allow PV self-consumers to feed their excess generation into the grid in exchange for a compensation. On this side, our analysis shows that regulations can still be improved in many countries. It should be noted that it is the combination of both elements (grid parity and proper regulation) what generates the investment opportunity. The existence of one of them only, will not generate any market effect.
Even in the ideal case where PV Grid Parity is combined with an efficient regulatory framework, a massive market is not likely to develop owing to the nature of the investment (i.e., based on savings). However, given that grid parity is an economic reality, policymakers should create the proper frameworks to adapt the energy system to the increasing importance of distributed generation, and in so doing ensure that it is properly monitored, channelled, and regulated.
In conclusion, it is important to understand that Grid Parity represents a unique opportunity to develop a local and sustainable power generation technology in a cost-effective way, however, proper regulatory changes must be made to make this possible. The results and main conclusions for each of the seven analyzed countries are summarized in the following pages.
