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Solar Energy to Reach Grid Parity in 2014

Strong demand for solar photovoltaic installations, increased margins, and the achievement of grid parity in certain key markets leads Deutsche Bank analysts to forecast solar energy as sustainable, rather than subsidized, by the end of next year.

In order for solar power to really shine in our energy systems, the cost of installing and operating PV systems has to come down to a point where it is sustainable – that is, a point at which it is no longer necessary to be subsidized.

Grid parity, which is the point at which the cost for producing electricity from an alternative source is equal or less than that of power coming from the grid (traditionally coal- or natural gas-powered). While it’s not a simple or direct number to come up with, when parity occurs in certain markets or with certain technologies, the chances are much higher that they will see wider adoption, so it’s a key indicator of clean energy potential.

The high price-point for entry in solar technology has been one of the biggest stumbling blocks for widespread implementation, and a strong point in the argument against it. But that objection may soon be empty, according to a recent analysis of the market.

The news coming out of Deutsche Bank emphasizes the gains possible for the solar manufacturing industry, which has seen share prices dropping due to oversupply and a consequent price war. Some of the biggest gains are possible in big markets such as China, the U.S., and India (which has reached grid parity), where unsubsidized solar projects are already being developed and the demand continues to be high.

According to Renew Economy, the analysis from Deutsche Bank included this key suggestion:

“We see the sector transitioning from subsidised to sustainable markets in 2014.”

Spain and Italy are also considered to be prime candidates for the market expansion in solar installations, as TriplePundit points out that Spain has reached grid parity and is planning a big increase in installations, and Italy’s solar market is currently competitive with the grid.

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