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Grid parity describes the point when electricity from PV costs the same as or less than grid electricity — enabling economic self-consumption without subsidies.
Grid parity describes the point at which electricity from renewable energy sources — particularly photovoltaics — costs the same as or less than electricity from the public grid. From this point onward, the economic self-consumption of self-generated electricity becomes possible without government subsidies.
The Levelized Cost of Electricity (LCOE) of solar systems has steadily decreased due to technological progress and large-scale production.
At the same time, grid electricity prices have increased because of grid charges, taxes, and levies.
Once the cost per kilowatt hour of self-generated electricity is equal to or lower than the electricity purchase price from an energy supplier, grid parity is reached.
This is particularly relevant for direct self-consumption, especially when combined with Battery Energy Storage Systems (BESS).
• Commercial businesses with high electricity demand and suitable roof areas for PV
• Industrial companies with a high share of self-consumption
• Agricultural businesses with stable daytime electricity demand
• Combination of PV systems and Battery Energy Storage Systems (BESS) to shift consumption
• Tenant electricity models or energy communities
• Electricity generation costs (€/kWh) of the PV system
• Grid electricity price (€/kWh) including grid charges and levies
• Self-consumption rate (%)
• Payback period of the investment
• Development of electricity prices compared with declining PV costs
Grid parity is an important milestone for the energy transition and makes investments in PV systems economically attractive even without subsidies. Particularly in the commercial and industrial sectors with high self-consumption, self-generated electricity becomes a cost-effective alternative to grid electricity — especially when combined with intelligent energy management and Battery Energy Storage Systems (BESS).
