New study by EPIA finds that solar PV could compete with grid electricity in Europe by 2020

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According to a new study by the European Photovoltaic Industry Association (EPIA), select European markets hold the potential to be competitive with grid electricity as early as 2013, with all the European markets reaching the same level by 2020. In its Solar Photovoltaics Competing in the Energy Sector report, EPIA found that over the past two decades, PV technology has had major price reductions, including a 20% decrease in the price of PV modules every time the cumulative solar volume of PV modules has doubled.

EPIA maintains that additional reductions are possible with costs potentially dropping around 50% until 2020. Its analysis of France, Germany, Italy, Spain and the United Kingdom, led EPIA to compare the real cost of PV electricity generation to that of other traditional energy sources over the next few years and conclude that if the right conditions exist, solar electricity can compete on the same level across Europe over the next nine years.

“Already today, PV electricity is cheaper than many people think,” said EPIA President Ingmar Wilhelm. “In the coming years it is going to get even cheaper thanks to ever-improving technology and economies of scale. As the price of electricity from conventional sources increases, solar PV will be become a fully competitive part of the energy mix.”

Working with A.T. Kearney, EPIA’s study found that dynamic grid parity could occur as early as 2013 in the commercial segment in Italy and eventually spread throughout Europe, and include all different types of installations, by 2020. Additionally, generation value competitiveness can be reached in the ground-mounted segment in Italy by 2014 and, once again, spread throughout Europe by 2020.

Of course, EPIA noted that reaching these goals requires the right political framework that supports solar PV technology. The study acknowledged that feed-in tariffs have given PV the chance to find its footing in the global energy market, but EPIA states that “as the competitiveness gap narrows for the PV sector, due to technology development and parallel decrease of generation cots, PV will be able to rely progressively less on dedicated financial support…” This, according to EPIA, should lead to a reduction in support schemes and can be achieved even faster if the internationalization of external effects is put in place for all technologies leading subsidies for other energy resources to also be phased out.

“Switching to solar photovoltaic electricity is not just a desirable option for achieving our energy and environmental goals,” concluded Wilhelm, “it is also a realistic and competitive one. By creating the right conditions now for the development of PV, we can ensure that it fulfills its promise as a clean, safe and infinitely renewable energy source and a major part of Europe’s energy mix.”

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