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Solar hits parity with coal in China

by on21 August 2019


Cheaper than coal

Solar power now costs the same as or less than, electricity from the grid in many of China's cities, a new study finds.

China is now the world's largest producer of electricity. Most of this electricity comes from coal, which was used to generate more than 72 percent of China's electricity in 2015. Still, China is aggressively pursuing renewable energy, with the US Energy Information Administration projecting China's solar capacity to grow by more than seven percent per year from 2015 to 2040, and its wind capacity to grow at nearly five percent annually during that period.

Solar analyst Rishab Shrestha with energy research and consultancy firm Wood Mackenzie in Denmark said that a team Sweden and China analysed the net costs and profits associated with building and operating industrial and commercial solar energy projects in 344 prefecture-level cities in China. They found in all 344 cities, solar photovoltaic systems were capable of generating and selling electricity at lower prices than the grid without subsidies, and in 22 percent of those cities, they could also produce electricity at lower prices than coal.

This research may encourage broader adoption of industrial and commercial solar power there. Advances in solar technology have helped bring solar within reach of grid parity sooner than expected in China. Whereas the cost of solar photovoltaic electricity there was up to 15.1 Chinese yuan per kilowatt-hour in 2000, it was only up to 0.79 Chinese yuan per kilowatt-hour in 2018. Also, in 2018, the Chinese government dramatically cut subsidies to the solar photovoltaic industry to drive it to compete with coal without government aid.

To see where Chinese solar energy stood now, scientists in Sweden and China analysed the net costs and profits associated with building and operating industrial and commercial solar energy projects in 344 prefecture-level cities in China. They found in all 344 cities, solar photovoltaic systems were capable of generating and selling electricity at lower prices than the grid without subsidies, and in 22 per cent of those cities, they could also produce electricity at lower prices than coal. The scientists detailed their findings in the 12 August edition of the journal Nature Energy.

Last modified on 21 August 2019
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