Some people insist that solar PV has achieved "grid parity" but to claim this they obviously have to consider grid connected PV.

The real cost of solar PV is masked when grid connected. In order to better understand the real cost of solar PV, let's make a

**simplified**exercise here.

What would be needed to go off grid? The following:

- Obviously, the solar PV panels.
- Storage batteries
- A gasoline electric generator (unless you plan to store heroic amounts of electricity, you would need the backup generator).

We'll consider the following parameters in our installation (feel free to substitute your own numbers):

- Annual solar capacity factor:
**18%.** - Cost of the PV installation (including inverters, installation, etc.):
**$3**per Watt. - We'll use Tesla storage batteries (the 7kW version) at a cost of
**$6,000**including installation. - Solar panel useful life:
**20**years. - Batteries useful life:
**10**years. - Annual electricity usage:
**8,400**kWh.

So, this house would consume the following electrical energy in 20 years: 20 x 8,400 =

**168,000 kWh.**
The average electricity consumption is: 8,400 kWh / 354 / 24 =

**959 W.**
To supply (on average) that amount of power we need the following PV capacity: 0,959 kW / 0.18 C.F. = 5.3 kW of solar panels. Let's round this off to

**6 kW**to be on the safe side.
To minimize cost, we'll consider storing only

**3**days of electricity, That would be: 8,400 kWh / 365 x 3 = 69 kW. Let's round this off to**70 kW.**
We would then need ten 7 kW Tesla batteries at a cost of $6,000 each: 10 x 6,000 = $60,000.

Finally, we'll need a gasoline backup generator at a cost of $1,000.

If we use it 10% of the time, we should be consuming ~$300 of gasoline per year.

So, the total cost to produce

**168,000 kWh**(in 20 years) would be:
Solar Panels:

**$18,000**
Tesla batteries: $60,000 x 2 =

**$120,000**(considering the batteries last 10 years).
Backup generator:

**$1,000**
Gasoline: $300 x 20 =

**$6,000**
Total:

**$145,000**
If we divide the above by the total kWh generated in 20 years, we get the cost per kWh:

$145,000 / 168,000 kWh =

**$0.86 / kWh.**
Currently, the average cost of the residential kWh in the US is

**$0.13**, thus the solar kWh as calculated here is**6.6 times more expensive.**
Sure, the assumptions above can be modified and the costs will vary, still, once the total costs of solar PV are included it is very doubtful that this technology has reached "grid parity" or that it will achieve it any time soon.

Feel free to double check the numbers above. Thank you.

References:

Average cost of residential kWh in the US:

http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a

Cost of Tesla battery:

http://www.cnbc.com/2015/05/07/teslas-new-bet-a-home-battery-to-slash-energy-costs.html