Solar Now ‘Cheaper Than Grid Electricity’ in Every Chinese City, Study Finds
By Josh Gabbatiss
Projects in every city analyzed by the researchers could be built today without subsidy, at lower prices than those supplied by the grid, and around a fifth could also compete with the nation's coal electricity prices.
While previous studies of nations such as Germany and the U.S. have concluded that solar could achieve grid parity by 2020 in most developed countries, some have suggested China would have to wait decades.
Despite these results, grid parity may not drive a surge in the uptake of solar, a leading analyst tells Carbon Brief.
China's solar industry has rapidly expanded from a small, rural program in the 1990s to the largest in the world. It is both the biggest generator of solar power and the biggest installer of solar panels.
The installed capacity of solar panels in China in 2018 amounted to more than a third of the global total, with the country accounting for half the world's solar additions that year.
Since 2000, the Chinese government has unveiled over 100 policies supporting the PV industry, and technological progress has helped make solar power less expensive. This has led to the cost of electricity from solar power dropping, as demonstrated in the chart below.
Chart showing the historical levelized cost of electricity (LCOE) from solar power in China.
Source: Yan et al. (2019)
In their paper, professor Jinyue Yan of Sweden's Royal Institute of Technology and his colleagues explain that this "stunning" performance has been accelerated by government subsidies, but has also seen China overinvesting in "redundant construction and overcapacity." The authors write:
"Recently, the Chinese government has been trying to lead the PV industry onto a more sustainable and efficient development track by tightening incentive policies with China's 531 New Policy."
The researchers say the subsidy cuts under this policy in 2018 were a signal that the government wanted to make the industry less dependent on state support and shift its focus from scale to quality.
This, they say, has "brought the industry to a crossroads," with discussions taking place in China about when solar electricity generation could achieve grid parity.
In their analysis, Yan and his team examined the prospects for building industrial and commercial solar projects without state support in 344 cities across China, attempting to gauge where or whether grid parity could be achieved.
The team estimated the total lifetime price of solar energy systems in all of these cities, taking into account net costs and profits, including project investments, electricity output and trading prices.
Besides establishing that installations in every city tested could supply cheaper electricity than the grid, they also compared solar to the price of coal-generated power. They found that 22% of the cities could build solar systems capable of producing electricity at cheaper prices than coal.
Declining costs of solar technology, particularly crystalline silicon modules, mean the trend in China is also playing out around the world. In May, the International Renewable Energy Agency (IRENA) said that by the beginning of next year, grid parity could become the global norm for the solar industry.
Kingsmill Bond, an energy strategist at Carbon Tracker, says this is the first in-depth study he has seen looking at city-level solar costs in China, and is encouraged by this indication of solar becoming ever-more competitive. He tells Carbon Brief:
"The conclusion that industrial and commercial solar is cheaper than grid electricity means that the workshop of the world can embrace solar. Without subsidy and its distorting impacts, and driven by commercial gain."
On the other hand, Jenny Chase, head of solar analysis at BloombergNEF, says the findings revealed by Yan and his team are "fairly old news" as the competitive price of rooftop solar in China has been known about for at least a year.
She notes that this does not mean there has been a huge accompanying rollout of industrial and commercial solar, and says this is partly because of the long-term thinking required for investment to be seen as worthwhile.
Reposted with permission from our media associate Carbon Brief.
By Jake Johnson
Amid reports that oil industry-friendly former Energy Secretary Ernest Moniz remains under consideration to return to his old post in the incoming Biden administration, a diverse coalition of environmental groups is mobilizing for an "all-out push" to keep Moniz away from the White House and demand a cabinet willing to boldly confront the corporations responsible for the climate emergency.
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Anger, anxiety, overwhelm … climate change can evoke intense feelings.
"It's easy to feel dwarfed in the context of such a global systemic issue," says psychologist Renée Lertzman.
She says that when people experience these feelings, they often shut down and push information away. So to encourage climate action, she advises not bombarding people with frightening facts.
"When we lead with information, we are actually unwittingly walking right into a situation that is set up to undermine our efforts," she says.
She says if you want to engage people on the topic, take a compassionate approach. Ask people what they know and want to learn. Then have a conversation.
This conversational approach may seem at odds with the urgency of the issue, but Lertzman says it can get results faster.
"When we take a compassion-based approach, we are actively disarming defenses so that people are actually more willing and able to respond and engage quicker," she says. "And we don't have time right now to mess around, and so I do actually come to this topic with a sense of urgency… We do not have time to not take this approach."
Reporting credit: ChavoBart Digital Media
Reposted with permission from Yale Climate Connections.
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