This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Moving Target of Grid Parity

NEW YORK ( TheStreet) -- Since I last wrote about solar power a few weeks ago , grid parity has become the industry's buzzword du jour.

Grid parity means that when you add all the costs of a panel and divide by the energy output over its useful life it equals the cost of buying electricity from your local power grid over that time.

We can't know what grid energy will cost 10 years from now, so we extrapolate from current figures. Sometimes we add an inflation component. And we can't be sure a panel will deliver the same output over time, either. We make assumptions on both sides.

Still, grid parity matters for policymakers, which means it matters for companies like First Solar (FSLR - Get Report) and JA Solar (JASO - Get Report), which make and sell panels. Grid parity defines solar competing without subsidy. The claim of grid parity defines a sustainable market.

A Deutsche Bank analysis, quoted here by PV Magazine, indicates grid parity will happen across Europe next year, and that it has already been reached in India. This means higher sales and stable pricing across the industry.

Some 100 Gwatts worth of solar power has now been installed worldwide, and demand for 2013 should top 30 Gwatts, according to SustainableBusiness. That's still a fraction of U.S. demand, which a Google analysis sees at 13 billion kilowatt/hours each month.

It should be smooth sailing for solar, but it's not. There are huge differences in photovoltaic module costs between China and everyone else, as much as 50%, writes GreenTechMedia. This means a trade war seems imminent, according to EuropeanVoice.

Nuclear and fossil fuel advocates have also responded to solar success by piling on pressure against the industry in state legislatures. Grant Smith of the Civil Society Institute has an op-ed, seen here at the Augusta Free Press, charging the American Legislative Exchange Council or ALEC, a business lobbyist, with lying about solar and wind costs to maintain construction work in progress and support for new nuclear and coal plants.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
FSLR $63.43 0.00%
JASO $10.15 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs