Few ideas drive as much excitement in the solar industry as grid parity, the point at which solar systems — or any other renewable source of energy — cost the same as producing electricity from conventional sources like fossil fuels. Travis Bradford, founder of The Prometheus Institute, on Monday said that the research group forecasts that two-thirds of the U.S. market (by electricity sold) using photovoltaic systems will be at grid parity by 2015. “The U.S. will be an extraordinary market in a few years,” he said while giving a morning keynote address at the Intersolar conference in San Francisco.
The figure includes federal tax incentives and assumes that electricity rates will rise on average 1 percent per year, a conservative assumption, according to Bradford. Solar systems can produce electricity at or below grid prices in about 10 percent of the U.S. market today, Bradford said. That number will rise to two-thirds of the U.S. market because of the fast decline in the cost of modules and other system components like racks. Bradford said commercial solar systems would reach about $2 to $3 per watt installed and residential about $4 per watt installed by 2015, down from more than $6 per watt today.
Bradford said the United States “is entering a period” when it could become the largest market for and producer of solar modules. The rapid advance toward grid parity and government incentives like tax credits and renewable portfolio standards are the main drivers behind this potential shift. “I don’t think a lot of people believe this yet, but that doesn’t mean it’s not true,” Bradford said.
Image courtesy of NREL.