Solar energy is cheaper than grid power in over 300 Chinese cities

Solar power has now reached ‘grid parity’ – the point at which renewables can generate energy at a cost equal to the price of power from the grid – in 344 Chinese cities, according to a new study published in Nature Energy. 

Prior research had indicated that solar would reach this crucial tipping point in many Western nations by 2020, but suggested that it could take decades in China, which still generates the vast majority of its energy from coal. 

However, the study – led by Jinyue Yan from the Royal Institute of Technology in Stockholm – credited a combination of technological advances, government support and cost reductions for China’s early grid parity achievement. The country is now both the largest global generator of solar power and the biggest installer of solar panels. 

Data from the US Energy Information Administration projects that China’s solar capacity will grow more than 7% per year between 2015 and 2040, while wind capacity will grow at nearly 5% annually during that period.

In the report, Yan and his colleagues looked at the prospects for building commercial and industrial-scale solar projects without state support in 344 cities to assess whether grid parity could be achieved. The researchers estimated the total lifetime price of solar PV systems in each of the urban areas – taking net costs and profits into account. 

Ultimately, the team not only discovered that solar installations could supply electricity at less than grid prices in every city – they also found that 22% of the cities could build solar systems capable of producing electricity more cheaply than coal.

However, their analysis indicated that the price of solar power had not fallen evenly across all of the cities studied, therefore the report recommended that subsidies are used in cities where the technology performs less well.

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