Grid parity - you should know - is the point at which photovoltaic electricity is equal to or cheaper than mains supplied electricity and is regarded as the Holy Grail by solar followers. At this point, solar production will literally take-off - without need of subsidy - because as a forward purchase of electricity, it is cheaper and the highly distributed grid becomes reality. In some respects, grid parity is the less glamorous energy equivalent to Ray Kurzweil's Singularity, when artificial intelligence exceeds human intelligence - which he predicts will happen in 2045 - and machine intelligence drives economic growth faster and faster at a pace and rate of change we couldn't easily comprehend.

Now back to the sunny stuff. An excellent piece in today's Guardian by Ashley Seagar provides us with a feast of food for thought on the prospects of solar energy in the next few years. The big question is simply this; when will the solar industry achieve grid parity?

Today, the optimists would say, 2-5 years at most and their arguments are roughly as follows;

i) Higher than anticipated oil prices and other fossil fuels are pricing in solar more quickly than expected
ii) The great polysilicon shortage - where demand significantly exceeded supply - will end in 2009 lowering signifantly the input raw material costs of solar wafer and module manufacturers. Many new polysilicon plants are slated to addtionally come on stream after then as well. As per the article, REC expects 30-40% lower panel costs by 2012.
iii) Come the next American President, everything changes, everything, change we can believe in, etc. Especially, the accelerated rollout of increased incentives to alternative energy.

Now here's what a pessimist might say - 10 years or more to grid parity - and this is why;

i) Even though solar prices have remained the same the last few years in spite of massively increased production, even if even more production will deliver those price falls, why is no one ready to predict, say, a modest 10% fall next year, as a mere starting point? And why is no one lambasting all those who predicted grid parity years ago - should we really forgive them so easily?
ii) Oil prices may be in a small speculative bubble and even if they're not, it's not as if they can double or triple  in price again to $400. Even a war with Iran has limited impact. Iran can retaliate after a US or Israeli strike, but it can only do so once - after which it will be neutered by the US Air Force and/or have its oil assets seized by Marines. So a shift to higher oil prices could be a one-off inflationary adjustment.
iii) Isn't it a little bit naive to assume that falling solar production costs will 100% be returned to the consumer rather than manifest itself in an increased profit margin for suppliers, at least initially?
iv) Historical analysis suggests that American Presidents - like most democratic political leaders - tend to produce marginal shifts of emphasis. Early ambitions tend to be curtailed by political realities, mid-term elections and winning the next one. Passing a new energy bill that would further support solar power takes a lot of time to bring on to the books.
v) It would be very hard to supply electricity needs from solar in serious scale beyond 10% - on average throughout the year - of any country. The highest penetration so far is 0.3% in Germany. The load-balancing of such variable supplies in scale is an unprecedented challenge not easily solved at low cost. And the big consumers of electricity are not homes, they are businesses, big heavy ones.

So here are my parting thoughts;

i) Grid parity will not universally arrive the world over, simultaneously. It will inch through first in those countries which;

a) Have high relative grid prices - Germany, Italy, California
b) Offer some kind of profitable incentive to the producer - Germany, California
c) Have a suitable solar climate as measured in average daily sunlight hours throughout the year and the solar irradiance per square metre - California, Italy
and
d) It will be popular in the Middle East, as a way of extending the lifetime of oil and gas reserves

My instinct is that the case for early grid parity has been a little too uncritically overstated, perhaps a bit like peak oil, which is probably still at least a few years off. But the pessimists may be wrong too. So I'm going to sit on the fence and lean heavily towards the pessimists and state that grid parity may become a reality in some major parts of the world by 2017.