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The diagram above also shows the feed-in tariff in Germany from 2009. It shows clearly how the tariff was adjusted in line with the decrease in costs.

Trends in Solar Photovoltaics

Two trends in solar pv have persisted over the past decades: An increase in conversion efficiency at the same time as decrease in costs. This has helped solar pv achieve grid parity in many locations already.

Cell Efficiency Improvements

Due to technological advances, the average cell efficiency for crystalline- based silicon modules has increased by 1% every two years. The theoretical maximum for efficiency of a silicon cell is 33%.

Apart from improvements in crystalline silicon and established thin-film technologies, new pv-materials are emerging, for instance:

  1. Perovskite cells: hybrid organic - inorganic material with high efficiency
  2. Dye-sensitive cells: organic materials with relatively moderate efficiency, though very low cost.

Cost Trends

Costs for solar have dropped dramatically and are set to come down even further. What's particularly interesting here is that costs have come down across the value chain - not only equipment, but also costs for installation and auxillary costs.

Grid Parity

PV Cost TrendThe cost of the energy generated by a PV module does not just depend on the size of the system (rated power), but also on location where it is installed. The same system will in most instances yield different amounts of annual energy for the same capital investment.

For instance, in Berlin, the energy yield for a system is about 900KWh/kWp, whereas Dubai gets 1,800kWh/kWp. Hence, there is no individual point where solar electricity could reach "grid parity", i.e. the cost of electricity that is pumped into the grid, mostly by coal- fired power plants.

Also, electricity markets know two price points - peak and off-peak, where peak is significantly more expensive than the base-load.

It is anticipated that solar electricity will eventually reach both peak and off-peak grid parity in most locations of the earth by 2040 given current trends.
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