Grid parity: Is It the Wrong Goal Post?

Ever since the first conference to discuss what solar could do for meeting electricity supply held in 1973, in Cherry Hill, New Jersey, the solar industry has talked about the holy grail of "grid parity". ("Grid parity" refers to the crossover point where the cost of solar power pulls roughly even with the cost of power from coal, natural gas and nuclear plants.) So, for 36 years people have had this singular goal in mind.

While this remains an important long-term target, today, solar PV is cost competitive with other energy sources during "peak parity" - the hours in the afternoon when power demand surges and utilities face much higher cost of producing electricity.

Typically, utilities run their huge coal, natural-gas and nuclear plants around the clock to meet what’s called base-load demand - the minimum electricity necessary to supply the grid from approximately sundown to noon the next day. Then, as consumption rises in the afternoon, utilities fire up smaller and less efficient standby so-called "peaker" plants to meet the higher peak demand, which is considerably more expensive.

The production cost of Applied Materials’ SunFab thin-film modules to the utility could translate into a delivered electricity cost to consumers of less than what it costs utilities to crank up gas fired generation assets to cope with afternoon peak loads. 

Moreover, global peak consumption of power is growing faster than overall power demand. Harvesting solar energy to fill this gap is the natural solution. At utility scale, solar PV would obviate much of the need for the costly peaker plants. Wonder what we are waiting for?

Photo courtesy of E Wiemann.