Towards grid parity in insular energy systems: The case of photovoltaics (PV) in Cyprus

Grid parity is defined as the threshold at which a grid-connected renewable energy sources (RES) system supplies electricity to the end user at the same price as grid-supplied electricity. Predictions from the 2006 time-frame expected retail grid parity for solar in the 2016 to 2020 era, but due to rapid downward pricing changes, more recent calculations have forced dramatic reductions in time scale, and the suggestion that solar has already reached grid parity in a wide variety of locations. This study presents aspects of achieving grid parity in insular energy systems, based on a case study applied in Cyprus. The analysis presents the variation of the manufacturing cost, the selling price of the produced energy, and the performance of the solar panels to examine the conditions of accomplishing grid parity event. It is also concluded that grid parity may be easier achieved in insular energy systems due to the higher cost of primary energy. (C) 2013 Elsevier Ltd. All rights reserved.