Almost reaching grid parity

This post is based on this Tech On article, and as a secondary source I’ve also used this article in theoildrum.com. On the first article they talk about how we will reach grid parity earlier than thought, which means that the cost of generating solar power will be equal or less than the cost of using power from the current electric power grid. According to the latest predictions, grid parity, which was calculated to occur sometime around the year 2022, is going to happen 10 years earlier! And according to Fuji Keizai, Japan will be the first country to reach grid parity in 2012.

It seems like one of the main reasons has been the plummeting of silicon prices thanks to the crisis (it meant a halt in global manufacturing, but now the demand fall has caused silicon to start being cheaper). On this graph you can see how all of a sudden a year ago the manufacturing cost per watt started to plummet:

photovoltaic manufacturing cost

Besides, a few years ago, the manufacturing cost of thin-film cells was more than double the manufacturing cost of multicrystalline silicon cells. Right now, the best manufacturing techniques in the industry have allowed to cut manufacturing costs of thin-film cells in more than 30%. If we top that with the fact that a lot less silicon is needed to produce this thin-film cells in comparison to multicrystalline silicon cells, the battle between these two types of cell is on. And producers are trying to focus on manufacturing only one of the two types to try and reduce costs to the maximum.

Most producers of solar cells in the world are seeing the opportunity and, at the same time, are spending a lot of money building new manufacturing plants and reducing production costs. For example, Sharp has opened two new plants in Nara and Osaka, and they are already setting up another plant to manufacture thin-film solar cells (the ones with less silicon and whose cost has plummeted) in Italy together with Enel and STMicroelectronics (source). When I wrote this article, some Japanese producers were market leaders in solar cell production, but in the last year, the American company First Solar and the Chinese company Suntech Power have beaten Sharp, and Kyocera has lost several positions in the ranking of biggest producers.


Source of this ranking

The current production capacity of these ten companies will allow to install solar panels able to produce 85GW… that is 14 times more than the production capacity there was in 2008!

If we analyze the installed capacity by country, instead of production capacity of solar cells, Spain is the number one country in annual growth percentage of its solar installations:

  • Spain, 73.3%
  • Germany, 65.3%
  • United Kingdom, 36.9%
  • Indonesia, 35.4%
  • Japan, 31.5%


Efficiency by type of cell achieved by different companies and institutions through time.

Although grid parity will be reached a lot sooner than expected, calculations haven’t taken into account the cost of storing energy in batteries (the problem of solar energy are cloudy days and nights). If we take into account the installation cost of batteries and other factors, the “real” grid parity will be pushed back a few years, as we see in these two last graphs that show predictions of “different grid parities” for Japan. The vertical axis shows the cost in Yen/kWh and the horizontal axis, the years.

grid parity

grid parity

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