German bank reports solar power cost in India and Italy has reached grid parity

solar farm
Solarkraftwerk Waldpolenz, the first Solar 40-MW CdTe PV Array installed by JUWI Group in Brandis, Germany. Credit: JUWI Group

( —Germany's Deutsche Bank has released a report that concludes that generating electricity using solar collectors has reached grid parity—cost competitiveness with other industry standard sources—in some countries. Analysts with the bank claim that both India and Italy have reached grid parity and that other countries are poised to do so over the next couple of years.

From the time were invented and made for sale, deriving electricity using them has cost more than doing so from traditional sources—mainly coal fired plants. Because of that, solar energy has not grown as fast as some would like and its increased use in recent years has come about only because of government subsidies. Over time however, prices for solar panel components has slowly dropped making them much more price competitive. To achieve grid parity, solar power must be cost competitive with coal or other sources without relying on government or corporate subsidies.

The German Bank is particularly optimistic about solar power price parity in India, the U.S., China, the U.K., Germany, Spain and Italy and because of that is forecasting a 20 percent (30 GW) increase in this year—it's already pushed above 100 GW. They note that Germany alone accounts for approximately a third of all solar power production, but project that China will soon surpass that country because of a very strong push by the government there. India too is making a strong push—the government has set a goal of producing 20 GW by 2022. The U.S. is also making strides with construction underway in the of what will soon be the largest solar farm in the world.

Because of the optimistic numbers seen over the past year, the Deutsche Bank is suggesting the world is on a path that will mean moving from as a subsidized source to one that is considered sustainable much sooner than industry analysts had predicted. Also, despite the large increase in numbers of solar farms, and their size, the bank believes that rooftop solar installations will lead the way to grid parity and that it will happen without the traditional government subsidies used to entice both commercial and residential customers.

Explore further

World solar power capacity exceeds 100 gigawatts

More information: Deutsche Bank:

via PVMag

© 2013

Citation: German bank reports solar power cost in India and Italy has reached grid parity (2013, April 10) retrieved 23 October 2019 from
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.

Feedback to editors

User comments

Apr 10, 2013
So much for all those who screamed out the subsidies for green power being money down the toilet.

Apr 10, 2013
Sounds like great news. Does the comparison contain any carbon taxes or other disincentives for fossil fuels?

Apr 10, 2013
So much for all those who screamed out the subsidies for green power being money down the toilet.

They were. All the subsidies managed to do was create a temporary price bubble for solar energy, bankcrupt western companies and shift more production and money into China.

The subsidies generated artifical demand for solar panels faster than the market could respond to, which caused a price bubble that lasted until the chinese copy factories went up and started using old technology to pump out cheap panels. The growth of demand didn't continue as fast as expected and now there's oversupply on the market with lots of solar power companies going bankcrupt, especially western companies that put a lot of their money into R&D instead of just pumping out cheap panels.

The prices are now falling at a rate of about 39% a year since 2008, but we're talking about a market oscillation caused by a sudden disturbance, which means the prices will keep going up and down for a while.

Apr 10, 2013
The US imposed tariffs on Chinese solar panels will also reduce prices in the rest of the world for the same reason: decreased US demand for Chinese panels causes oversupply and decrease in price in the rest of the world.

And more bankcrupt European companies.

Of course the situation won't last, because demand will pick up soon. Meanwhile, the producers are making very thin profit margins or no profit at all, which means they won't be able to cough up the money to expand production once the demand picks up, which means the industry is heading into another price bubble.

Apr 10, 2013
I would like to point out that antialias has been saying this was happening for a while now. Nice call AA! Tip o me hat to ya!

Apr 10, 2013
Great News. As solar and renewables become cost competitive with fossil fuels, energy users will voluntarily give up fossil fuels and the Global Warming problem will recede.

We need to expand funding for research and development of renewable energy (and batteries and grid improvements) to speed up the pace at which fossil fuels become economically unattractive.

Apr 10, 2013
There is a long way to go before room for solar and wind runs out, but it will happen. We can not replace the entire energy economy with them as the primary source of energy at least not until the price drops significantly for night storage of energy. Like India we should be investing in generation IV Thorium/Spent Uranium reactors to handle these fluctuations as part of a complete solution. The US has a huge head start in nuclear but are falling behind India and China due to lack of investment. Continued investment is necessary in all energies that make sense, and nuclear needs to be added to the list right besides solar instead of being shunned for security and safety reasons, because these are no longer valid concerns with the technology as it can be implemented in the future, but instead is a relic of old technology that has proven to be unsafe.

Apr 10, 2013
I predict that in 10 years, the current blips in the price of solar will just be noise on a downward ramp towards the time when solar is the cheapest new technology. Solar is also pretty easy to distribute on a per family or small community basis (for example: Africa).

Apr 11, 2013
I would like to point out that antialias has been saying this was happening for a while now. Nice call AA!

*takes a bow*.
Thank you.

To be fair: living in germany I'm pretty much immersed in this change. Ecological issues (and especially alternative energy issues) are constantly being (hotly) debated over here.

Then there's the whole nuclear thing which has always been a hot-button issue in germany. Since the cold war when we were very well aware that germany would have been ground-zero in WWIII - smack dab in the center of the crosshairs of ALL nuclear powers at the time - anything nuclear has been viewed with mixed emotions.

(Well, I can tell you it's NOT fun growing up with that kind of sword of Damoclese hanging over you)

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more