Nicole Jewell

Solar Power is Now as Cheap as Buying From the Grid - in Europe

by , 04/24/14

Although solar power’s return on investment has been debated endlessly, it now looks like the renewable energy source has finally become as cheap as buying off the grid – at least in some European countries. Renewable energy consulting firm Eclareon just released a report confirming that the price of solar power in Germany, Italy and Spain has finally reached what is referred to as “grid parity.” While grid parity has quite a few variables, it means that, over the course of the equipment’s lifetime, the total cost of installing solar panels is now on par with the costs associated with buying from the country’s grid system.


Here in the US, this gives us all reason to believe that solar power is moving in the right direction and can soon be an attainable and affordable resource for private homeowners as well as large and small commercial properties. Of course, there are still quite a few hurdles to be overcome. At the moment, the US offers a 30 percent federal tax credit for installing a solar panel system. Unfortunately, that tax break is set to expire at the end of 2016 and will be replaced with a production credit, limiting the upfront incentives for homeowners.

Related: An American Home or Business Goes Solar Every Four Minutes

Also complicating the road to grid parity here in the US is the inclusion of “soft costs” such as financing and maintenance fees that occur in the full-cycle solar installation process. These soft costs are considered obstacles to grid parity because they swell the overall manufacturing and installation costs, affecting the competitivity of solar power in comparison to buying from the grid. Grid parity is a measurement of the true market competiveness of solar energy generation regardless of tax benefits and extra costs associated with installation and financing procedures.

Of course, reaching grid parity depends on a number of outside factors such as location, climate and the current housing market. A recent report from Rocky Mountain Institute suggests that US consumers may start switching from grid-purchased energy to solar between 2025 and 2047. However, with the elimination of solar energy tax credits along with the recent news from Eclareon proving that grid parity is an achievable objective, the solar sector could hopefully be inspired to push the industry in the same direction as our European friends.

Via Fast Coexist

Lead image of solar panels / Shutterstock

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2 Comments

  1. Jimmie Lindberg May 12, 2014 at 4:53 am

    If you take to account that energyprices in Europe is the highest in the world you might say that solar is as expensive as power from the grid. A German pays about 35-40 cents/kWh electricity and energypoverty is a fast growing problem in Europe. The winter 2012-13 31.000 people died from energypoverty in the UK according to the authorities. I belive that solarpower will continue to develop in fast rate and soon will be a cheaper alternative, but in Europe the “green” change has rised gridfees, taxes and subcidies to a level where solar power seems cheap in comparison. The rising cost for energy is the main factor, not the drop in cost for solar power.

  2. Lisa McDonald April 27, 2014 at 12:44 pm

    This is fantastic news for the renewable energy industry. However, it takes writers like you and me to communicate this to the public. Society still believes solar power is too expensive. The industry needs to share this news and stories like this with the public so they can understand some of the benefits of using renewable energy.

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