Apr 20, 2011 5:59 AM GMT
Grid parity is the technical term for when an alternative energy's cost equals that of the traditional electricity supply--which, in the U.S., is mostly coal. It simply means that solar panels are becoming so cheap to produce and so efficient that they can now battle with the giant coal-fired power-generating structure we've developed. Currently, coal costs about 7 cents a watt, versus 22 cents for solar. But the solar industry is moving so fast that those costs will be equal--at least for utilities--by 2013. In sunny places like California, it's already much closer during peak hours, when the sun is shining and coal power becomes more expensive. Should you prefer your information more technical and in graphic form, see this explanatory chart by Stephen O’Rourke of Deutsche Bank:
In other words, once grid parity is reached, it becomes economically stupid for power companies to not be installing large fields of solar panels to generate the cheapest form of available energy. And while power companies are generally portrayed as evil conglomerates headed by Mr. Burns-esque figures (and for all we know, they probably are), evil conglomerates with shareholders can't really afford to make economically stupid decisions, as much as their leaders secretly want to destroy the environment. They've caught on to that, which is why solar panel installations are expected to double in the next two years. It's not people putting them on their houses driving most of that change, it's large scale installations. You're not going to notice the change, and that's good: No one will have to do anything to get clean solar power. It's just going to come from the same place as your old dirty power.
Bonus stock tip: if these predictions turn out to be right, and the moment of solar grid parity is upon us, it might be a good time to be in the solar panel business. The cheapest product available is usually in pretty high demand.