Parity is one of the most important buzz words in solar. It’s the point at which solar becomes cost-competitive with grid-supplied electricity on a levelized cost basis. It’s also the point when solar becomes a real contender with conventional energy generation in a market—and it’s happening in an increasing number of places, like Germany, Italy, California, Hawaii, and now, apparently in New Mexico. 

At least one company, Conergy, says it is now installing projects in New Mexico at parity with the grid. Through it’s global Start It! campaign, which focuses on installing photovoltaic (PV) projects at parity with grid-based electricity, the company is installing 1.2 megawatts of solar to power the V. Sue Cleveland and Rio Rancho High Schools in Rio Rancho, N.M. 

“In many regions of the U.S.A., grid parity has been achieved for end consumers, and solar power is already considerably cheaper today than power from the grid,” says Conergy U.S. Managing Director Anthony Fotopoulos. Indeed, an increasing number of analysts and companies anticipate that PV is coming into parity in more of the U.S. and the world at large. Through the Start It! campaign, for instance, Conergy says it’s already installed PV systems at parity in South Africa, Spain and Italy. The company anticipates that it will install more at-parity projects in the U.S. in coming months. 

The systems at the schools in New Mexico will reach parity through 20-year power purchase agreements (PPAs) with Washington Gas Energy Systems, which is financing the systems. “Local consumption via power purchase agreements is the future of the American electricity market,” Fotopoulos says. 

“With the solar installations we cover about 80 percent of our total annual power requirements while cutting our electricity costs at the same time—without a major upfront investment,” explains Al Sena, Rio Rancho Public Schools’ building manager. 

PPAs are being used in the U.S. by many companies and homeowners to invest in solar with no up-front costs, and get electricity that’s often at levels below what they can get from the grid. The electric price is then guaranteed for years to come. But most of these PPAs also rely on a number of incentive programs that reduce the cost of solar. In New Mexico for instance, such incentives include tax credits and performance-based incentives. As the price of solar technologies continue to come down, these projects will be at parity with the grid—without incentives.

The original article was posted on the SolarReviews blog.