Page 10 - Solar

Background to the Investment

The Democratisation of Energy
Grid Parity

The world’s energy supplies have historically been One of the greatest objectives of the renewable energy

controlled by a handful of countries with the natural industry is to produce and sell energy to the grid at an
resources and a handful of companies with the necessary equal or lower price than traditional sources including oil,

capacity to explore, extract, and distribute them. This has coal and gas. Government led incentives have made it

been regularly demonstrated in fluctuating oil and gas feasible for the private sector to undertake the high initial
prices in recent years. The emergence of the renewable investment costs of developing solar energy but it is a

sector has opened up energy production geographically, combination of competition, research and development

to countries whose natural resources are wind and and scales of economy that are already driving costs
sunlight more than oil or gas, and socially in terms of down. The first generation alone of European solar

relatively low capital required to invest in. The energy incentives have eliminated over 50% of its own

democratisation of energy has had the additional benefits investment costs. By 2020 this will have fallen far enough
of involving more people directly in the philosophy and to see solar energy challenge traditional sources unaided

mission of renewable energy, diversifying production and by incentives or special tariffs.
ownership, encouraging further research and
Although the existing supply of renewable energy has
development and increasing energy security.
helped blunt slightly the rise of oil prices, the era of cheap
oil has passed to a new era of peak oil. The financial cost,

not to speak of the environmental cost of fossil fuels, will
Energy Security
rise inexorably as the corresponding cost of renewables
fall, making grid parity merely a question of time.
Solar energy is growing at the same time that the world

is facing an increasingly volatile politicised global energy Grid parity already exists in some locations, such as
market. If anything, solar energy needs to grow faster to Hawaii, that have traditionally imported most if not all of

meet the political and energy security challenges that lie their energy. Within the European Union itself Germany,

ahead. With their clear political consensus, their lead in Italy, and Ireland are high importers of energy with a
clean energy technology and giant consumer bases, strong vested interest in achieving grid parity as soon as

Europe’s principal solar markets are ripe for investment possible.

and expansion.

‘After long consultations, there is now an

agreement by the coalition to end nuclear energy,

...This decision is consistent, decisive and clear.’

German Environment Minister Norbert Roettgen

May 2011, announces Germany will shut down all of its nuclear plants by 2022

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