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Power Options: Comparing Costs of Rooftop Solar to Traditional Electricity

The cost of solar photovoltaic (PV) systems is plummeting, with prices dropping 80 percent globally between 2008 and 2013. As prices come down, consumers can save money on electricity in more markets by installing solar panels on their roofs. But accurate comparisons between the cost of solar PV and traditional electricity are not always clear or available.

In the United States, solar PV capacity has increased from 3.95 gigawatts (GW) at the end of 2011 to over 16 GW at the end of 2014. Many of these solar PV systems have been installed for small-to medium-size consumers, typically connected at the consumer’s location. These systems are called behind-the-meter systems as they supply electricity at the point of demand without first interacting with the grid. In 2013, these systems accounted for roughly 40 percent of new U.S. solar PV.

The rise in behind-the-meter solar PV is due in large part to the increased number of markets that offer customer savings over traditional electricity supply. Some new solar suppliers in states across the U.S. promise consumers savings over their current electricity bills. However, consumers are often wary of these claims, so access to clear, accurate cost comparisons is needed. Unfortunately, there is a lack of useful, clear information to help consumers navigate the solar rooftop market.

Where Solar PV Could Save Money: U.S. and India Comparisons

WRI’s new factsheet, Behind-the-Meter Solar PV: Understanding Cost Parity, outlines in basic terms what makes an accurate comparison. The three examples below follow these terms and illustrate where consumers could save money using solar PV. A more detailed analysis would be needed to understand the specifics at a given location.

  • SUPERMARKETS: 40 percent of U.S. supermarkets would have saved money over their electricity rates in 2012 by installing rooftop solar systems. This assumes the supermarket would’ve installed solar PV systems at the national average price and with “net-metering” policies, but did not account for rising electricity rates.

  • SCHOOLS: Between 30 to 60 percent of U.S. public and private (K-12) schools could save money by installing solar PV at a price of $2-2.5/W. This assumes a 30-year lifespan. An interactive map shows all the schools that could save money.

  • INDIA: Commercial consumers in eight Indian states could currently save money with solar PV over their electricity rates, according to Bridge to India. This analysis was conducted on systems smaller than 50 kilowatts without subsidies. Solar PV can save consumers money in a total of 13 Indian states with the supportive policy of accelerated depreciation in place.

Behind-the-Meter Solar PV: Understanding Cost Parity aims to help decision-makers, policy experts, investors, and regulators make these comparisons accurately so they can understand where they can save money using solar PV.

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