Mapping Solar Grid Parity

So, is it that it will never be economical for Alaska and Hawaii, or is it just that both states are being excluded from the dataset?

John, I think you are taking far too conservative an approach to declaring parity. You're using average price of electricity as your measurement of current price. Retail TOU/high tier price is what solar is really competing against. If someone is getting hit with $0.30/kWh for sunny afternoon power solar, for them, parity waved as they passed it sometime back.

You're also using the cost of electricity from the panels over their 20 year 'loan payoff' period. A more accurate cost measurement would use panel lifetime. $0.15/kWh LCOE using a 20 year loan term means $0.06/kWh over a 50 year panel lifetime.

If someone is currently paying $0.12/kWh (CA average) for electricity it would seem to be a no-brainer to pay an extra three cents for a few years in order to lock in their inflation ceiling at fifteen cents and then move to roughly zero cents per kWh when the panels are paid off. Perhaps it's time to start talking about solar panels as an investment yielding free electricity.

Finally, $4/watt in 2011. In LA you've got Open Neighborhood installing for $4.78 (possibly lower now). The 30% federal subsidy takes that down to $3.37. Factor in state and local subsidies and we must have passed grid parity some time ago in lot of California. Subsidies are not likely to disappear any time soon, let's use them.

I am wondering whether this can be adjusted to show the approximate area of the respective populations? Is Google maps one of them that allows one to draw on the map?

I just think you can make an even more effective point when showing that essentially all of Florida and Ohio potentially become covered by solar energy, huge areas of California, and the whole of eastern Texas (big oil country!)

Is this right, or am I over estimating the sprawl of those populations?
Thanks

I like this analysis. The $4/watt 2011 starting point is competitively accurate and the 7% decrease and 2% increase for electricity are balanced assumptions. Over how many years did you spread the upfront cost? I assume most people use the warranty period of 25 years? Why don't we use the expected lifespan of 30 years, since we know it's still kicking out 80% at year 25? Also, did you use any maintenance assumption or inverter replacement?

Would be good to see how this map may churn out amongst UK counties.

I find this map fascinating, and I know of several installation projects that were canceled due to the cost, and lack of a return on investment (even with subsidies). But, living 30 miles west of New York City, this chart isn't all that helpful. NY will reach parity in just 3 years. I was grabbing my phone to set my appointment. But, then as the animations continued, I noticed Philadelphia, Providence and Boston don't reach parity until 5 years later. How can that be? NYC and Philadelphia are only 90 miles apart.

I have to wonder how accurate this is....I am really wanting to install my own set up here in Dallas. The panels have been the big gotcha, but I can order 1Kw of panels for under $1500 from China. That puts a self install around 5-6K. Not to mention Foxconn is ramping up a giant factory that should cut panel cost another 25% this year. So it think the parity will be hit a lot sooner.

It's surprising to see several northeastern markets pop up early in the list. I assume the 2% grid increase is a national average. Does it factor in expected impacts of natural gas production from the Marcellus Shale region?

If solar is going to be cheaper than the existing grid in San Diego in 2013, it must be pretty close in price right now, right? So it must be the case that some pretty significant number - 35%? 40%? - are already off the grid. Any idea what that number really is in December 2011?

A few comments:
1. Why did you not include local incentives and tax benefits? Oil, gas, and coal produced electricity all receive financial incentives which are, in turn passed on to the consumer in the form of lower kWh prices. It is the same mechanism in a different level of the value chain. So the real cost (LCOE) is much lower than you use in your calculation. 30% lower (Federal ITC) at least.

2. 2% utility rate increase is less than 1/2 of the national historical average (5%) for the past 20 years. "2% inflation" doesn't pencil either, as utilities have increased at higher than inflation rates, AND the coal fired power plants of the 1950-70 time period will need to be replaced, so kWh prices are likely to increase by at least 7% in the coming decade (conservatively). AND I made no mention of the cost of carbon, which will come. No joke.

3. Balance of system prices have fallen 50% in the past 5 years, not 7%. Granted, they won't go much lower as module prices are not such of percentage of costs and labor, inverters, and SG&A are likely to create more negative pressure on the trend. But 10%-12.5% is real in the next 10 years.

4. Grid parity exists currently in south western markets where utility rates average more than $.10/kWh and the capitalized cost of solar is around $.08/kWh or less after incentives.

Inaccurate assumptions equals inaccurate conclusion. Shave 8 years from your timeline.

I agree as the volume of sales increase, the price will drop. New technology tends to have exponential price drops with increasing sales
Look at the price of VCRs

What about Hawaii?

Interesting graphic, and I understand that you were probably trying to keep things simple, but aren't there large regional price differences in solar power generation? Is it really realistic that NYC would reach solar power parity in 2015?

Solar decreasing only 7% per year is very conservative.

A more likely scenario would be double that.

The cost of solar depends a lot on the raw materials and methods of manufacturing. Additionally, the $4.00/watt cost is an average of national installers. They charge a high amount because most of them are large corporations that have extremely costly overhead. In reality, our company have installed solar PV projects for residential and commercial properties for $2-$3 / watt depending on type of system and location. Our financing plans allow for an immediate positive cash flow.

Personally, I think there are many myths and hidden information about solar, and that is why my job with Invaleon is to educate customers about what is REALLY offered in the market and how solar is one of the most sustainable power generations out there. Just keep in mind, cost of solar is not the limiting factor, it's people's willingness.

If anyone has specific questions they would like answered, you can reach me directly at: tom.wu@invaleontech.com