Electricity from industrial and commercial solar energy systems has become cheaper than grid-supplied electricity in Chinese cities, finds a study published online this week in Nature Energy. This finding presents an economic incentive that may encourage a substantial uptake of industrial and commercial solar systems in China in the near future.

When the price of solar electricity is higher than grid supply, the economic incentive to purchase solar energy systems can be reduced. Many developed countries subsidize solar energy systems to make up for the higher costs. Developing nations, such as China, may not offer significant subsidies, but lower labour and system hardware costs may mean that achieving parity with grid electricity prices is within reach.

Jinyue Yan and colleagues estimated total solar energy system prices and electricity output in Chinese cities and compared them to city-level grid electricity prices. They also estimated grid-scale solar electricity prices and compared those to coal generated grid electricity prices. The authors found that industrial and commercial solar photovoltaic systems are capable of generating electricity at lower costs than the grid supply in all 344 Chinese cities. In 22% of these cities, the grid solar electricity systems can also produce electricity at lower prices than coal.