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Grid parity of solar energy: imminent fact or future's fiction

One of the major questions related to renewable energy systems is whether we are approaching solar grid parity or not. Solar based power generation will play an important role in future sustainable energy mixes due to its high reliability, yield predictability and capacity for electricity production during peak demand when the electricity price is usually high. But nowadays the economic viability of these technologies depends on the subsidies usually granted, mainly by public authorities, and in a minor way by electricity producers. The article evaluates the potential of solar energy based technologies for viable electricity generation, focusing on Photovoltaics (PV) and Concentrated Solar Power (CSP) systems. The evaluation was not only focused on EU but also covered global markets, assessing the necessary barriers and thresholds preventing or boosting these technologies to reach grid parity. The observed rapid growth in deployment of the studied technologies (especially PV) in recent years is largely policy-driven and whether this trend will be sustainable depends on whether governments will continue to expand financial incentives and policy mandates, as well as address regulatory and market barriers. Keywords: Solar energy, Grid parity, Photovoltaics, Concentrated Solar Power systems.

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JEL Codes: Q42: Alternative Energy Sources, Q40: Energy: General, Q35: Hydrocarbon Resources

Keywords: Solar energy, Grid parity, Photovoltaics, Concentrated Solar Power systems

DOI: 10.5547/01956574.37.SI2.spap

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Published in Volume 37, Bollino-Madlener Special Issue of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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