Solar Subsidies Are no Longer Required to Reach Grid Parity

Recent research done by Melbourne University’s Energy Research Institute shows that the price of renewable energy technology, particularly solar and wind power, will continue to fall over the next 10 years. As such the cost of these clean energy power sources will become competitive enough to be on par with the cost of fossil fuel generated electricity nationally by the end of the decade, and much sooner in some regions.

In fact in the case of solar power it is expected to eventually become a cheaper energy source even without any government subsidies.

According to Muriel Watt, the chair of the Australian Photovoltaic Association, the current unsubsidised cost of a solar PV module bought for around $1.80/watt translates into a cost of energy of around 29c/kWh – the rate that many households are paying for electricity purchased from the grid at the same time that this energy is produced(early to mid afternoon). She says that at $1.22/W, where prices have now fallen to, the equivalent production cost is 25c/kWh.

This means that the federal government of Australia must establish long term plans on how to inject and integrate renewable energy sources across industries as one of the researchers mentioned.

Solar power has shown tremendous growth over the past few years, increasing our base load by 40% each year for the last 10 years.  This is made particularly apparent when displaying a technology learning curve;it is this cumulative installed capacity that has ultimately lead to the industry’s current success in the country.

Solar PV technology surged in popularity largely because of the generous government incentives which resulted to high demand both in large scale and residential applications. And in the last couple of years this has been paired with the falling prices of solar PV both in the local and international market, plus the rising value of Australian currency.

The continued learning curve through research and development will ultimately bring “true” grid parity to the country that doesn’t require propping up or artificial stimulants. Although they gave a big boost to solar installations across the country, government incentives are now short term gold rushes to the industry, and no longer sustainable.

Keeping personal interests aside, renewable energy technologies are going to play a vital role to combat climate change at this crucial time for our environment.

 The bulk of our carbon emissions are produced by carbon intensive power plants and vehicle fuel combustion. We already know what potential harm global warming can bring, but knowing alone doesn’t solve the problem, awareness is a step forward but true solutionsdepend on each of us for our commitment and actions.