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Grid Electricity Now More Expensive Than Solar in China

15 Aug 15:00 by Steve Walia

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New figures have shown that solar power in China is now cheaper than its grid-generated energy. It is expected that the growth of clean energy will continue the renewables boom in China.

Originally, market analysts expected it to take decades for solar power to be comparable in price to grid energy. However, advances in technology and government support have driven forward price parity.

Scientists looked at 344 Chinese cities, finding that already 22% of them had solar installations that could already generate cheaper electricity than coal. The research was led by a team from the Royal Institute of Technology in Stockholm.

Investment in renewables is booming in China as its costs plummet and demand overall for electricity continues to grow.

Market analysts pointed to the fact that solar energy in China had become competitive in its own right rather than through the distorting impacts of subsidy payments.

Only 25 years ago, the country had no solar panels at all. Today, it beats any other country in the world by at least 100% on the solar installation front. 

In fact, China is now the biggest investor in clean and renewable energy technologies by far, investing in half of the world's total commissioned renewable infrastructure projects.

There is also still plenty of room for growth, with a 5% market penetration for solar across the world and 60% for coal.

Solar power investment requires a long-term strategic approach, as the costs of installation are still high and government policymakers often fail to see the short-term benefits. Many investors are also waiting for the costs of solar to fall further as the technology continues to be refined and becomes increasingly affordable.

In the past ten years, the world's investment in renewable energy technologies has grown to 12% from 5%.