It is now generally recognized that rooftop solar has reached “socket parity” -- meaning that it is comparable to or cheaper than grid prices -- in many countries over the last few years. The big question for consumers and utilities is when socket parity will arrive for solar and battery storage.

Some suggest it is many years away. Others, such as UBS and Rocky Mountain Institute, say it could arrive in Australia and the U.S. within four to six years, and perhaps even sooner.

The following graph, from the economic development agency Germany Trade and Invest, outlines the metric that will govern the arrival of grid parity for battery storage. Electricity prices are rising and solar PV prices are falling, which means that if battery storage falls to around €0.20 per kilowatt-hour (U.S. $0.27), parity will be achieved.

Australian investment firm Morgans, in an assessment of Brisbane-based battery storage developer Redflow, suggests that that company's zinc-bromine flow battery may already be commercially economic in Germany, the country that leads the world in terms of household adoption and government support for renewables.

Morgans notes that in Germany, the cost of household grid power is around €0.30 per kilowatt-hour (U.S. $0.40) and that the government is now subsidizing residential energy storage systems that are connected to solar systems.

“Given Germany’s substantial adoption of solar PV...costs for solar power range from €0.10 to €0.15 per kilowatt-hour (half the grid price), so when energy storage costs reach €0.15 to €0.20, this will mean renewable energy costs will be at parity with grid prices,” Morgans concludes.

The German government is currently subsidizing up to €3,000 of the cost of energy storage systems. Morgans says that the €0.15 to €0.20 per kilowatt-hour range for energy storage costs, combined with the German government’s €3,000 subsidy for energy storage systems, means the Redflow battery will be competitive if the company can triple the device's cycle life.

“In our view, this should be achievable,” according to the analysis.


Giles Parkinson is the founding editor of Reneweconomy. This piece was originally published at Reneweconomy and was reprinted with permission.