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Grid Parity Is a Misleading Idea

Paul Gipe is an award-winning veteran in the work of developing renewable energy policies in North America. In 2004, he served as the executive director of the Ontario Sustainable Energy Association and led the campaign to adapt European renewable electricity economic policies to the North American market. The campaign has grown into a continent-wide grassroots movement that has put renewable energy feed-in tariffs on the political agenda in Canada and the U.S.
He introduces himself as an advocate for the responsible development of renewable energy and shares his thoughts about renewable energy policies with InterPV magazine.

Reported by Stella Y. Lee (pved1@infothe.com)



In an interview, you said tax subsidies are the wrong way to develop renewable energy. Do you still believe feed-in tariffs are most effective for developing the massive amounts of renewable energy?

If you want to develop renewable energy rapidly andjust as importantequitably, feed-in tariffs are the only way. There are many policy mechanisms to chose from and some will give your rapid growth, but no other policy will allow everyone who wants to participate in the renewable energy revolution the opportunity to do so.


Can you contrast the effectiveness of feed-in tariff policies and Renewable Portfolio Standard (RPS) policies? Also, can you explain the technical reasons why you see the feed-in tariffs are more effective?

Well, theres really no comparison. RPS/Quota programs are now used in fewer and fewer jurisdictions. The number of jurisdictions using feed-in tariffs exceeds that using quota systems (RPS/Renewable Obligations) and the trend will only accelerate.

Quota systems are used in predominantly English-speaking countries: the U.S.A., Australia, parts of Canada, and the U.K.


Speaking of the feed-in tariffs, which country do you see as the most promising now, and why?

The unquestioned leader is Germany. Within a decade, they have installed enough renewables to meet 20% of their electricity consumptionand half of that capacity is owned by people like you and mejournalists, homeowners, farmers, blue-collar workers, churches, everyone.

But France has a program that has worked well until it began to infringe on the construction of new nuclear plants. Italy has a program for solar and microgenerators that has worked well. Switzerland, Ontario (Canada), and now even the U.K. No one expected that the growth of microgeneration in the U.K. would accelerate at the pace it did. Though the government panicked at the programs success, the program continues.


When do you expect to see grid parity? Is Germany now at grid parity?

This is a question that only comes up with solar PV. I work with renewable energy, not just solar PV. When you ask me that question, I answer, Were already at grid parity and have been for some time. Wind has been at grid parity for years. Thus, the idea of grid parity is meaningless. If you ask how quickly will the price of solar drop, thats a legitimate question. But grid parity? Even when this magical point is reachedagain only for solar PVwhat then? You will still need renewable energy policy. There will be no magical kingdom appear when grid parity is reached.


What is the biggest challenge faced by the solar industry at the moment?

Chinese dumping practices and the need for domestic content requirements as in Ontario, and Italy now, but probably soon in other countries if they want to keep any kind of manufacturing base alive.


How will the solar industry look in 5 years from now?

Five years is a lifetime in energy policy. I dont have a crystal ball and I dont predict the future. I work to bring alive the future I want to see. My future is major industrial countries and the developing world moving rapidly toward 100% renewable energy. And to do that you need more than solar PV. You need wind, biomass, biogas, geothermal, and hydro. You need them all. Moreover, I want at least 50% of the renewable energy to be owned by the people who live nearby. Theres no reason why Asian villagers cant own their own solar and their own solar and wind plants. Thats the beauty of renewables, the beauty of solar, it can be owned directly by those who use the electricity it produces. The revenue generated circulates in the community, making the community and its inhabitants richerboth in income, but also in the powerful knowledge that they have a little more control over their lives than they had before renewables came into their lives. Thats the future I see. Solar PV has a part to play in thatan important part.


Stella Y. Lee is Editor of InterPV. Send your comments to pved1@infothe.com.



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