The future is here: solar is cheaper than grid electricity for 30 million Americans

Rooftop solar is now cheaper than grid electricity for 30 million people living in 6 cities, a new report writes – even without government subsidies. This includes the cost of installing the solar panels. In other words, the future is here – solar energy is cheaper than the alternative.

Solar energy map. Image via National Renewable Energy Laboratory.

Grid parity (or socket parity) occurs when an alternative energy source can generate power at the same price (or lower) than purchasing power from the electricity grid. As renewable energy (solar included) becomes cheaper and cheaper, a parity will be reached in many parts of the world (be it for solar or other types of energy) – but this is generally regarded as something that will happen “in the future”. Well, this is the future. If you live in one of these 6 cities:

  • Boston,
  • San Francisco,
  • San Diego,
  • San Jose,
  • Los Angeles,
  • Riverside,

then solar parity has already been reached, according to a new review by the Institute for Local Self-Reliance (ILSR). The report also shows that many other cities could fit in the same profile if government fossil subsidies were neglected.

“In our original analysis looking for parity between solar and grid electricity prices on residential property in 2015, residents were expected to save money by going solar in only 2 of the largest 42 U.S. metro areas, New York and San Diego.* According to a recently released report by the North Carolina Clean Energy Technology Center, however, grid parity was coming much quicker. A review shows that their study included all applicable federal, state, and local incentives (instead of our no-subsidy analysis), but it gave us a reason to revisit our 2012 analysis.

As it turns out, solar parity––without incentives––has been accelerating.”

What’s spectacular to me is that solar energy was cheaper even without government subsidies, which means that it is fully competitive with conventional energy. When you also factor in the government subsidies (which may or may not last in the long term), and other solar energy facts, there are 42 cities that have reached solar parity.

But it will get even better, the same report claims:

“Early results suggest that nearly 150 million Americans––33% more than a simple parity analysis reveals––will live in a city where a solar investment––without subsidies––pays back over 25 years by 2021.”

Nevertheless, you should should check our pros and cons of solar checklist before you decide to purchase. Here are some more takeaways from the same report:

  • The installed cost of solar for this analysis is $3.50 per Watt in 2015, estimated to decrease 7% per year
  • The price of electricity is expected to increase by 2% per year
  • Electricity prices for each metro area were taken from the Bureau of Labor Statistics or Energy Information Administration
  • Solar insolation data comes from the National Renewable Energy Laboratory’s PVWatts system

So what does this mean? It’s not just that solar energy is getting cheaper and cheaper – it’s getting cheaper and cheaper faster. In other words, it’s reasonable to expect more and more cities where solar energy will become cheaper than the alternative, and if their results are correct, then over 40% of all Americans will be in this situation in just 6 years. That’s huge!

Of course, this depends on several factors and some areas are naturally more suitable for solar energy than others, but there are reasons to be optimistic about the future.

4 thoughts on “The future is here: solar is cheaper than grid electricity for 30 million Americans

  1. Mark Potochnik

    If you buy a system today, even if it doesn’t make economic sense today. Costs tend to be fixed and down the road you will be saving money.

  2. Joe McGuirk

    Mihai, your observation is well spoken, hopefully the trend you have identified will continue. There is a technicality that would make your message stronger and deflect critics looking for ways to discredit your position – change the NREL solar map from a ‘DNI’ map to a ‘total solar radiation’ map. Almost all photovoltaic systems, which are the ones you are referring to with regard to cost reductions, use total solar radiation, not DNI. Showing a total radiation map would more accurately portray why solar is attracting interest beyond the desert southwest, where DNI is the greatest. If you were to include concentrating solar systems in the analysis, then the DNI reference would be appropriate. But concentrating system cost reductions have not been realized nearly to the extent as have photovoltaics. A publication with the word Science in its title deserves technical accuracy. Thanks for creating this forum.

  3. Neil Porter

    Although it was well-intentioned, I believe that the environmental movement shot itself in the foot by comparing scenarios mainly on the basis of cost, savings and pay-back. We live in a society in which massive amounts of money are spent on things merely because people want them. Nobody justifies the purchase of an expensive vehicle because it will pay for itself in ten years through some kind of savings. $2,000 for a TV? Wow! Awesome! If you want it and have the money, you will enjoy the show. What about smoking? Several drinks at a bar? Going out to dinner every day? Buying a bigger home than one needs?

    There are so many good reasons to have your own solar system.

    Imagine what would happen if solar marketing went in another direction.

    Look what you can do for the environment.
    You can play an important role in reducing global warming.

    You can help help reduce pollutants in the air that make people sick.

    You live in the 21st century. Stop using outdated technology. Be on the cutting edge of technology.
    Stop sending your money to the OPEC countries. Keep it here and create new jobs in the USA.
    Show the electric companies that they no longer have a monopoly and can no longer dictate prices.

    I’m sure that marketing companies could come up with other ideas.

    For February 21, 2016 LG put together a 45-minute presentation of their new G5 phone. Barely a word was said about the actual technology. No specifications were given. Instead they sold an experience:

    “Life’s good when you play more”

    And modules that plug into the phone or external devices that connect wirelessly are called “Friends”.

  4. Pingback: Important Information To Know About Solar Energy – Atlantic Key Energy

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