Solar Could Fall 8% Per Year, Be Competitive in Italy by 2010

By Ucilia Wang

Solar electricity could compete, cost-wise, with other sources of electricity in parts of Southern Europe, by as early as next year, according to an industry report released Monday.

The report, conducted by the European Photovoltaics Industry Association, aims to lay out reasons for European Union lawmakers to support more solar friendly policies to achieve their greenhouse gas reduction and energy conservation goals.

The EU is aiming to reduce greenhouse gas emissions produced by countries in the EU by 20 percent from the 1990 levels by 2020. Part of the plan to achieve that goal is to rely on renewable energy for 20 percent of the overall use, as well as to reduce energy consumption by 20 percent.

If the right steps are taken by policy makers and the industry, then the European Union could get 12 percent of its electricity from solar by 2010, compared with less than 1 percent today. To achieve the 12 percent would require a wide deployment of energy storage and smart grid technologies, the report said.

"The 12% PV target is a necessary objective if the EU is to generate sufficient renewable energy to meet its 20/20/20 objectives," the solar industry association contends in the report.

The cost to produce solar electricity should fall about 8 percent each year, the report said. But at 20 euro cents to 40 euro cents per kilowatt hour, it remains more expensive than fossil fuel-generated power.

The photovoltaic industry wants to reduce the cost to below 10 euro cents per kilowatt hour for larger systems and below 15 euro cents per kilowatt hour for residential systems.

Italy, for example, could see solar electricity cost about the same as other types of power next year thanks to its abundant sunshine and high electricity prices. But cost alone wouldn't be enough to spur growth in solar energy installations, the report said.

Although Italy subsidizes solar installations, its bureaucracy has made it difficult to get permits to build them (see U.S. Solar Market: So Promising, Except for 2009).

Many European countries, including Germany, Spain, France and Greece, also have deployed their own solar subsidy programs. Those programs tend to require utilities to buy all the solar power available for sale and buy it at government-set prices that are higher than what they would pay for conventional power.

Under those feed-in tariff policies, home and business owners could potentially make a good profit from owning solar energy systems and selling the electricity to their utilities. The policies also have attracted project developers who build larger-scale projects and sell them to investors.

The report, by the way, focuses on solar panel installations and not other types of solar energy technologies, such as concentrating solar thermal. Concentrating solar thermal could make solar electricity on par with conventional power.

Solar thermal power plants use mirrors to concentrate the sunlight to heat fluids and produce steam for electricity generation. Companies such as Abengoa, Solar Millennium and Torresol Energy are building plants mainly in Spain (see Could Solar-Thermal Power Supply 25% of the World's Needs by 2050?).

Comments

[jerrydd:]

This is stupid!! Why not include CSP too if the goal is lowering CO2 it should be a no brainer. Not only does CSP give electricity but a lot of heat too lowering NG imports, dependency on Russia.

All RE should have the same feed in trariff so the most RE for the least cost would be built faster.

Plus the high subsidies for PV has kept the price for panels too high instead of it dropping as it would without them. They would be $2/wt now if not for such subsidies. Price of PV hasn't chaged in 20 yrs!!

Keep it lower at say .20Euro and let wind, PV, CSP, CHP, biomass, river/tidal and let any other non fossil fuel get it.

Here in the states it's just this kind of subsidy for oil, coal is why we don't have much RE yet. If the full price was in them instead of in our income taxes, health care, ect, RE would be the low cost energy source.

Jun 22 03:00 PM

[jerrydd:]

This is stupid!! Why not include CSP too if the goal is lowering CO2 it should be a no brainer. Not only does CSP give electricity but a lot of heat too lowering NG imports, dependency on Russia.

All RE should have the same feed in trariff so the most RE for the least cost would be built faster.

Plus the high subsidies for PV has kept the price for panels too high instead of it dropping as it would without them. They would be $2/wt now if not for such subsidies. Price of PV hasn't chaged in 20 yrs!!

Keep it lower at say .20Euro and let wind, PV, CSP, CHP, biomass, river/tidal and let any other non fossil fuel get it.

Here in the states it's just this kind of subsidy for oil, coal is why we don't have much RE yet. If the full price was in them instead of in our income taxes, health care, ect, RE would be the low cost energy source.

Jun 22 03:00 PM

[Nick Gogerty:]

Solar typically is priced as a realized cost of energy over 20 years. Grid parity is a financial expectation over the life time of the Solar project and the grid rates.

Depending on your expected Fuel/Grid inflation assumptions going forward the grid parity point can vary significantly (think compounding effects). Given low Euro zone inflation the potential for higher inflation in the future could make solar approach financial grid parity sooner.

Jun 23 08:48 AM