Rooftop solar already less expensive than grid power–even in Europe

A report from the biggest solar research centre in Europe suggests that rooftop solar PV is clearly cheaper than electricity sourced from the grid – even in northern European countries such as Germany – and could be cheaper on the wholesale market by 2030.

The report from Fraunhofer ISE (Institute for Solar Energy Systems) based in Freiburg, Germany, says the levellised cost of energy (LCOE) for rooftop solar PV could fall to as low at 6c/kWh by 2030, meaning it will be competing with the lowest cost of coal at that time.

“Even small roof-installed PV systems will be able to compete with …. The higher generation costs in the future from brown coal, hard coal and combined cycle gas power plants,” said the report’s lead authorm Fraunhofer ISE director professor Eicke Weber.

Fraunhofer notes that rooftop solar systems in southern Germany generate electricity for around €0.08c/kWh ($A12c/kWh). In northern Germany, where there is little sun, solar can be generated at €0.14c/kWh, which is half the cost of grid-based electricity.

Having households able to produce electricity at the same cost of coal – not including the network, distribution, and retail costs that are added to centralised generation – is likely to dramatically change the business metrics of the utilities industry.

However, it noted that other solar technologies on a utility scale were also likely to compete with fossil fuels in coming years.

The costs of concentrating solar power plants with 8 hours storage current will likely fall to €0.097 to €0.135/kWh by 2030 and will be able to deliver electricity on demand. And the costs of concentrating solar PV technology, which uses heliostats to focus the sun’s energy onto a powerful receiver, could fall to between  €0.045 and  €0.075/kWh by 2030, from around  €0.082 to  €0.148/kWh in 2013.

In the Middle East, considered to be the next big market in solar, oil-fired power plants show generation costs in the range of €0.13 – €0.17/kWh compared to PV with an LCOE of around €0.08/kWh

© 2014 Solar Choice Pty Ltd

Giles Parkinson

Giles Parkinson regularly contributes unique content to Solar Choice News. Giles is the founder and editor of clean energy industry news service RenewEconomy. He is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the founding editor of Climate Spectator.
Giles Parkinson