How Could Grid Parity Effect The solar PV Market

As has been recently discussed many times conventional energy suppliers have repeatedly put pressure on the government to make changes to the energy market siting the preferential treatment that renewable companies in such markets as solar panels, wind energy etc currently have with regard to grid parity.

Ofgem

Renewable Energy In The UK Only Accounts For 5%

Given that as of the end of 2013 renewable energy in the UK was attributed to less than 5% the amount of continued pressure that energy providers have put on the government for changes to the market is quite astonishing. The government however has recently acknowledged this while not directly being based on pressure from the big six but more in an effort to make the market more cost effective in their eyes. Ofgem has brought in future plans to bring a level playing field to energy transport costs that are consistently higher for solar PV, on and off shore wind farm due to location. While at the same time the green tax attributed to every bill is under serious review with a view to wither reduce or scarp the system which would in turn effect the future prices of green energy.

How Would Grid Parity effect The Market

Given the current systems in place to encourage uptake both domestically and commercially it is the latter that has suffered through a consistent changing of the FIT (Feed In Tariff) structure while the former has been growing consistently. Thus any future plans that would either effect this scheme or change potential returns on investment could have a particularly bad effect on the market given it has been through a turbulent time commercially of late.

Is Grid Parity Likely To Happen in The UK Solar Market

Eventually this would be the long term plan of any nation to have a sustainable option which is used to the same degree as fossil fuel generated energy. However due to the current estimates surrounding the UK and our 2020 objectives the chances of this occurring anytime soon are highly unlikely. For a clear picture of what a scenario of grid parity would be like then we should focus our attention on some of our EU neighbor who due to rapid expansion of their renewable energy market are now beginning to see grid parity filter through to the market.

large scale solar projects

Germany And Italy And More Now Have Grid Parity In Their Commercial Market

Rather than having a negative effect to the industry the ability for solar domestic PV for instance to compete financially with conventional electricity after installation has seen installations consistently rise. This is mainly being attributed to the relatively low install costs that are now the norm within the industry and so the choice it seems commercially is ultimately being put down to does a company want to pay a stable electric price or do they want to remain on grid with the subsequent energy rises this is likely to bring in years to come.

What Has An Increase In Solar Productivity Done To The Electricity Market

While firstly it has made the respective energy markets in each of these countries much more competitive which is an area that that the UK government itself is looking to achieve. What is more impressive is in for instance Germany the increase in overall uptake has benefited the overall market, this has occurred due to the electricity market having to become more competitive due to the loss of conventional consumers which has ultimately led to the country currently having it’s lowest electricity rate in 9 years.

What Could Stop The Solar PV Progression further in These Countries

While as stated parity within these countries is only occurring commercially it does represent a huge proportion of any nation renewable out put with this often being the greater to the the domestic market. The only area now that is said to be holding such nations back further is consistent regulation and that the industry retain the degree of encouragement that has put it in such a healthy position.

Could The UK Learn From Such Examples Of Commercial Solar Success

Given the the long term plan that such countries have placed on renewable energy it’s clear that encouraged investment and a long term solar power strategy will have dividend on the market. Also by consistently investing and supporting the market overall grid parity will filter into the sector as is now being displayed in the commercial markets of the countries above. What will now be interesting is when and how grid parity will effect the domestic solar power market which will likewise be the next phase that some of these top performing countries achieve.

Some previous related articles of interest:
How Russia can effect the UK solar industry
Recent solar technology advances
UK renewable energy capacity falling due to lack of investment

How Could Grid Parity Effect The solar PV Market
The potential off grid parity between conventional and renewable energy within the UK rises many serious questions


SolarKing UK
Equal power sharing, solar and conventional electric
Is there now a real opportunity for grid parity within the UK

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March 24, 2014
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