Some Countries May Have Reached Grid Parity But Demand Has Not Yet Picked up

Some countries may have reached grid parity but demand has not yet picked up because the market is currently suffering from oversupply and unreasonable prices. Industry sources believe that the gloomy macroeconomic conditions and lack of incentives for installations are the reasons of the reluctant demand, but carbon tax policies could play a key role to stimulate demand. Grid parity has been a goal for the solar market as it means the market will no longer rely on government support to survive. In 2011, the solar industry has been experiencing rapid capacity expansions and significant incentive cuts by Europe governments, causing serious oversupply problems and rapid price drops. Some firms have been suffering losses, but continue to hope for grid parity. The solar market has been influenced heavily by the world economy. The debt crisis in Europe and the US has been turning investors away from the solar market. Also, installation incentives have always been an issue for the industry. Some governments do provide small subsidies to promote installations but these subsidies have not been enough to attract meaningful installations. Some industry observers believe carbon tax can help to turn the solar market around. The tax can inspire demand when solar power reaches grid parity. Even without government incentives, energy users might still turn to solar installations to avoid paying the carbon tax. Source: www.digitimes.com