Picture yourself Italy in 10 years' time. Apart from a new prime
minister, other things will have changed drastically. Anyone who makes some
conservative forecasts for household energy prices in Italy in 10 years' time
will see some interesting outcomes. Take a modest 2.5% inflation on the current
electricity price for households and you will arrive at around €0,30 per kWh by
2021. This is of course without taking into account any euro or dollar value
increase, abolition of CO2 taxes,
oil and gas price decreases, (renewable) energy tax decreases and – last but not least – sharply reduced energy
consumption due to a wave of environmental consciousness flooding Italy. All of
which could possibly happen.
At the same time, imagine a 'crazy' global PV industry growth of 25% per
year. Compared to the 50% compound annual growth rate during the last 10 years,
this at least can be called a conservative scenario. In line with this, a 5-10%
average price reduction per year in PV systems looks feasible. Again based on
assumptions that remain to be proved: economies of scale leading to lower
production costs for solar modules, technology and cell efficiency that have
not reached their limits, the number of markets for PV not coming to a
standstill, and – last but not least – the assumption that the currently more
than 500 module manufacturers will not collectively decide to compete and lower
prices any further. All of which could possibly happen.
Such a 5-10% yearly system price decrease will lead to a cost price per
kWh of around €0,12 for solar electricity in 2021 (calculated based on 15-year
amortization and 6% interest rate).
To summarize, for 2021 we calculated €0,30 per kWh for grid electricity
and around €0,12 for solar electricity. Is it possible for these prices to co-exist
alongside each other? How likely is it that people will use the grid if they
can use solar energy for less than
half the cost?
What about supply security and energy storage? Well, you can assume that
the price difference of €0,18 should be sufficient to cover cost for energy
storage. Also, much development is taking place in this area. Think about micro
energy storage solutions in mobile phones, but also about electric cars,
scooters and bikes. All of these are expected to show significant growth
trajectories. Will energy storage be more expensive in 2021 than solar
electricity production (€0,12/kWh)? If not, the total price for solar
electricity plus storage could be less than €0,24/kWh. Still lower than the
expected grid electricity price....
Will there be any reason for customers to stay with an
expensive, old-fashioned bureaucratic energy company? Or will they opt for new
dynamic solar energy utilities supplying green solar electricity, including
storage and full 24-hour service at a 15-year guaranteed lower price?
Italy will arrive at grid parity in 2012. It will become the world’s
biggest grid parity market and an example for the rest of the world. Within 10
years, the Italian energy landscape could face major changes. Will today's energy
moguls remain passive and then be surprised to see new solar energy service
providers take over their businesses overnight, like WhatsApp did with SMS...?
