Photo-Voltaic power generation reaches grid parity for the first time
First Solar appears to have reached an important and, for many solar companies, elusive target: grid parity, or the point where photovoltaic electricity is as cheap as conventional electric power.
Pacific Crest analyst Mark Bachman ran some calculations on First Solar’s 12.6 megawatt solar system for Sempra Generation, a subsidiary of California utility Sempra Energy. Instead of focusing on the cost per watt, which Bachman said investors have put too much emphasis on, he looked at the cost per kilowatt-hour.
Bachman priced the Sempra plant at 7.5 cents per kilowatt hour, which is below the U.S. grid parity price of 9 cents per kilowatt-hour. First Solar’s plant didn’t rely on subsidies, he notes.
The industry leaders will be those companies that can deliver electricity at or below grid parity pricing without the aid of subsidies while also delivering superior return to shareholders. Currently, only First Solar can claim these achievements, in our view.
Other companies are also pushing for the grid-parity goal. Greentech Media reported that Cypress Semiconductor CEO T.J. Rodgers said: “that power from crystalline silicon solar panels will be cheaper than coal power by 2012 when transmissions lines, utility bureaucracy and other factors are added in. ‘We are zeroing in on parity,’ Rodgers said. ‘We’re going to match PG&E (Pacific Gas and Electric) by 2012. Within a couple of years, the price of solar will be just as cheap.’ “
Bravo. The best news I’ve heard since Election Day.
